Pipeline gets court’s nod in row with KenolKobil
What you need to know:
- This follows the dismissal of an application filed by the dealer intended to persuade the court to dismiss KPC’s amended plaint that introduced the claims.
- High Court judge Daniel Musinga ruled that KenolKobil Ltd had not demonstrated that the demand for an additional sum being sought by KPC was irregular.
- The claim arose from a matter filed by KenolKobil to enforce an arbitration decision awarding it Sh4.6 billion as compensation for breach of terms of engagement by KPC.
Kenya Pipeline Company has been allowed to amend its court papers to increase its claim against oil marketer KenolKobil by Sh763 million.
This follows the dismissal of an application filed by the dealer intended to persuade the court to dismiss KPC’s amended plaint that introduced the claims.
High Court judge Daniel Musinga ruled that KenolKobil Ltd had not demonstrated that the demand for an additional sum being sought by KPC was irregular.
The claim arose from a matter filed by KenolKobil to enforce an arbitration decision awarding it Sh4.6 billion as compensation for breach of terms of engagement by KPC. (READ: Dispute between oil refinery and KRA headed to the courts)
Amended plaint
However, KPC disputed the award and made a counterclaim against KenolKobil, which the court granted.
The purpose and objective of the amended plaint was to introduce new claims by KPC against KenolKobil on the basis that it continues to underpay the pipeline monthly invoices and award itself discounts every month.
The court found that deductions which were being made by KenolKobil continued throughout the arbitral proceedings in a manner that appeared to be arbitrary and self-enriching.
The amounts deducted by KenolKobil were the subject of a ruling by the first arbitrator in October 2007, who directed that the amounts so far deducted from the KPC invoice be deposited in an escrow account. KenolKobil however did not do that.
