Glencore Energy to appeal claim loss ruling
What you need to know:
- Glencore Energy says it will move to the Supreme Court to challenge the decision.
- The company said potential ramifications of the ruling is the impact on the course and conduct of international trade.
UK oil dealer Glencore Energy says it will move to the Supreme Court to challenge last week’s decision that blocked it from being paid Sh3.6 billion by the Kenya Pipeline Company.
The Court of Appeal on Friday dismissed a High Court ruling that was made in favour of Glencore, directing Kenya Pipeline to pay the firm for breach of contract.
It had found that by releasing oil to Triton Petroleum Ltd without authorisation from Glencore, KPC erred.
However, Court of Appeal judges Patrick Kiage, Stephen Gatembu and Kathurima M’Inoti ruled that it was wrong for the High Court to award compensation when the contract between KPC, Glencore and Triton was illegal.
“No court ought to enforce an illegal contract where the illegality has been brought to its notice,” they ruled.
In a press statement, Glencore said the ruling would affect the country’s international trade relationship.
The company said potential ramifications of the ruling is the impact on the course and conduct of international trade not only between Kenyan oil marketing companies and their financiers, but also on the way the country does business in the future.
“If financiers feel that they are not protected by the laws in Kenya, then from here on Kenya will have to purchase all its imports on a cash basis. This will in turn put great pressure on the Kenyan shilling and the Kenyan economy as a whole,” observed Glencore.
