Lebanese firm seeks to attach Kenya Pipeline's bank accounts in Sh926 million row

A Lebanese company has raided Kenya Pipeline Company’s bank accounts, claiming that the company has refused to pay more than Sh926 million owed to it following a contract to build a pipeline from Mombasa.

In its case filed before the Commercial Court, Zakhem International Construction Limited wants the court to attach KPC’s bank accounts held in Standard Chartered Bank, Equity Bank, and Stanbic Bank.

 The firm argues that despite being severally ordered to pay the debt, the corporation failed to honour its end of the bargain.

“The respondent is undeniably and unlawfully indebted to the applicant to USD 7.1 million (Sh926 million). Despite any tactics, manoeuvres or attempts to delay or frustrate the execution of the decree, this debt remains due and payable.

The respondent’s continued evasion has not extinguished its legal obligation, nor does it diminish the applicant’s right to recover the outstanding sum,” argued Zakhem’s lawyer, Ahmednasir Abdullahi.

Mr Ahmednasir explained that Justice Grace Nzioka awarded his client USD 44 million (5.6 billion at the current exchange rate) in 2020 and directed them to reconcile their accounts.

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He said the Kenya Revenue Authority (KRA) followed the judgment by demanding Sh5.1 million in tax.

According to the lawyer, a Sh1.1 million had been attached by KRA and retained by KPC.

He said that KPC ended up paying KRA Sh3.09 billion on October 22, 2020, and an additional Sh915 million on January 8, 2021, which was money owed to his client.

 He asserted that from the computation, there was some USD 7.1 billion that the corporation did not pay.

The lawyer explained that on January 6, 2021, Justice Ngenye Macharia directed that Sh485 million be released to Zakhem and paid in US dollars.

“In compliance with Justice Ngenye’s orders, the applicant obtained fresh warrants of attachment dated January 27, 2021 of for the sum of USD 7.1 being the sum due and outstanding after making the deduction of both Sh3.09 billion and Sh915 million being principal tax paid to KRA and applying the correct exchange rate,” said Ahmednasir.

He added that Justice Ngenye again issued fresh orders requiring KPC to pay the contractor on April 8, 2021.

 The lawyer stated that the efforts to get the money were frozen after Kenya Pipeline moved to the Court of Appeal. Nevertheless, he stated that KPC withdrew the case on March 11, 2025.

He said that the government-owned firm has bank accounts in three bank accounts and the money held there is more than the amount owed.

Zakhem’s Managing Director Ibrahim Zakhem told the court that the dispute stems from a contract dated July 1, 2014 to construct KPC’s line one. he said that the total amount the corporation owed his firm was USD 126 million (Sh16 billion under current exchange rate) together with interest.

Ibrahim further said that before the hearing of the main case, his lawyers sought to have KPC’s struck out. It followed that Justice Nzioka entered a partial judgment in favour of his company.

Back-to-back court battles have dogged the multi-billion-shillings contract. Initially, Ruhpumpen Global Limited, a subcontractor, sued KPC, claiming that it had induced Zakhem to favour Ebara Corporation.

Ruhpumpen’s case was, however, dismissed.

Fast forward to 2024, another subcontractor, Oilfields Engineering and Supplies Limited, moved to court, seeking to recover money from Zakhem. It sought to freeze Sh4.1 billion that was to be paid to Zakhem by KPC.

The court fight was so vicious, with accusations and counter-accusations, that the court ordered the Directorate of Criminal Investigations (DCI) to investigate and file a report on claims that Justice Patrick Otieno had allegedly been approached by Oilfields Engineering and Supplies Limited’s lawyer, Prof. Tom Ojienda, to allegedly tilt the scales of justice in his client’s (Oilfields) favour.