Lebanese firm sues KPC for Sh10.6b contract dues
Business
By
Kamau Muthoni
| Jun 11, 2026
The multibillion-shilling battle pitting Lebanese company Zakhem International Construction Ltd against Kenya Pipeline Company Ltd (KPC) is far from over.
Zakhem has filed yet another case, reigniting the war and, this time around, going for Sh10.6 billion, which it claims KPC hasn’t paid it.
Court records indicate KPC, which was recently privatised, has paid Zakhem more than Sh2 billion in interest as the battles drag on.
In the case before the Commercial High Court, Zakhem claims a delay in the commissioning of the pipeline project led to a variation of the total cost by $44.01 million (Sh5.7 billion).
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Its lawyer, Ahmednasir Abdullahi, said the amount had attracted a $1 million interest.
He said the total amount being claimed is $65.08 million. According to him, Zakhem took a $27 million loan from Ecobank to complete the project, and the alleged non-payment by KPC resulted in the loan accruing a $32.8 million, which ended up in court.
“The plaintiff satisfactorily discharged all of its obligations under the contract with the defendant, and has diligently executed its covenants with the defendant,” argued Ahmednasir, adding that his client had earlier sought to negotiate, but KPC was rigid.
It is not the first time the two are in court over payment dispute. Initially, Zakhem froze KPC accounts to force it to wire payment. It first filed a case involving Sh926 million, then, Sh500 million, then, in April this year, Sh781 million.
The firm asked the court to order a freeze of all the accounts to force a payment of the money claimed.
However, KPC argued the demands were illegal as the firm was paid in full on an agreement that all the cases before the court would be withdrawn.
KPC defence
“A withdrawn suit is an end and no further proceedings can be taken in it; the suit and the Plaintiff do not exist and no application such as the instant garnishee proceedings can emanate from the suit,” said KPC’s acting Chief Legal Officer Nelson Nyaduwa.
In a blow-by-blow account on how the Lebanese firm was paid, Nyaduwa said Zakhem had initially asked the court to force KPC to pay $126 million. Following the case, he said, the court issued a partial judgement, on June 16, 2020 for $44 million.
However, before the money could be settled, KRA came knocking for Sh6.1 billion tax which was to be paid by Zhakem.
According to him, another case arose from the tax demand in which the court ordered that KPC release Sh915 million to KRA, while the remainder of the total, Sh485 million, would be sent to Zakhem.
He added that KRA would not waive the taxes demanded. It again demanded Sh1.3 billion, which was the interest accrued. It attached the money which was to be paid to the Lebanese firm.
According to him, they finally settled the disputes by agreeing on final payment, which he asserts was paid.
The officer said KPC owes Zakhem nothing. “There is no enforceable decree that can emanate from a suit whose fate was withdrawn wholly.”
“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 Ahmednasir
Zakhem’s Managing Director Ibrahim Zakhem told the court the dispute stems from a contract dated July 1, 2014 to construct KPC’s line one. He said the total amount KPC owed his firm was $126 million together with interest.