A Kenyan firm seeking to liquidate Zakhem International Construction Limited over a debt of Sh537 million says the Lebanese firm has refused to settle its debt despite receiving payment from Kenya Pipeline Company (KPC).
In submissions filed in court, Azicon Kenya Limited said there was evidence that Zakhem was fully paid by KPC for works done on the replacement of the Mombasa-Nairobi pipeline.
The Kenyan firm was subcontracted by Zakhem to do electrical, instrumentation, and telecommunication installation works as KPC sought to replace the old pipeline.
“It is, therefore, the creditor/ respondent’s (Azicon) reasonable conclusion that by failing to comply with the subject served statutory demand herein, the debtor/ applicant (Zakhem) is unable to pay its debt and is therefore consequently liable to be liquidated,” the firm said in court documents.
The Kenyan firm said the contract was for $10,137,424 (about Sh1.3 billion) and Zakhem only paid $6,509,502 (about 840 million), leaving a balance of $4,160,857 (Sh537.3 million).
The Kenyan company said Zakhem has never disputed the works but has refused to clear the balance.
The case will be heard before the High Court today. Azicon Kenya Ltd was among the firms sub-contracted by Zakhem International Construction for the replacement of the 450-kilometre Nairobi-Mombasa pipeline in 2018, for Sh48 billion.
The firm’s managing director David Kibet Tonui said he obtained a court order on September 23, 2020, compelling Zakhem International to pay the money.
Another firm subcontracted by Zakhem International to execute the contract was also pursuing a debt of Sh670 million last year.
Multiple ICD (Kenya) Ltd had even obtained a court order freezing KPC’s bank accounts, but the order was lifted after it emerged that the oil company was not holding any money on behalf of Zakhem International.
On Monday, High Court judge Josephine Mong’are froze several bank accounts of KPC after ruling that the oil company still owed Zakhem Sh485 million.
KPC said it will be appealing against the decision.
