Companies

Firm barred from GDC funds over 2bn debt

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NCBA headquarters in Upper Hill in Nairobi. FILE PHOTO | EVANS HABIL | NMG

The High Court has blocked an ICT company from seizing funds held in an NCBA Bank account over a Sh2 billion debt arising from the provision of maintenance services at the Menengai Geothermal Project.

High Court judge Dorah Chepkwony allowed the application by the Attorney General after hearing that the bank account holds a loan of €80 million (Sh10.9 billion) meant for the exploration of steam field development in Bogoria.

Attorney General said the bank account was opened by Geothermal Development Company (GDC) to receive the funds in an agreement dated July 10, 2014, financing the project by KFW of Germany.

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The court heard that allowing Lantech (Africa) Limited to seize the money might spark a crisis between the governments of Kenya and Germany because the funds were meant for a specific project.

“I am, therefore, persuaded and it is my conclusion that the Attorney General has established to the required standard of proof that it has a legal and equitable interest on the subject account held by the judgment debtor with NCBA Bank on behalf of the government of Kenya,” Justice Chepkwony said.

The court, however, declined to suspend the decision as sought by GDC, pending the appeal, saying it lacked merit.

In a ruling last month, the court had allowed the application for garnishee orders against NCBA Bank, Co-op Bank and KCB, directing the banks to hand over any money belonging to GDC to Lantech.

The firm has been seeking payment of Sh2 billion it was awarded by the arbitrator, Kyalo Mbobu, arising from a contract for the provision of maintenance services.

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The ICT firm later moved to the High Court to enforce the award and sought an order compelling the banks to release any money it holds on behalf of GDC, after failing to get the payment.

Lantech had opposed the applications saying GDC can only appeal against the decision.

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