KenGen ordered to pay GDC Sh3.9bn


Kenya Electricity Generating Company. FILE PHOTO | POOL

Kenya Electricity Generating Company (KenGen) has suffered a blow after the High Court ruled that money in its various bank accounts is available for seizure to satisfy a Sh3.9 billion debt owed to Geothermal Development Company (GDC).

Justice Alfred Mabeya directed all banks in the country maintaining any accounts on behalf of KenGen should satisfy a decree of $26,687,017.

The court made the ruling after being informed that KenGen owes GDC some money derived from steam sales.

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GDC on its part owes Lantech Africa ltd, an ICT firm it contracted for a Menengai Geothermal Project but has never been paid despite winning an award before arbitration.

“Accordingly, the court finds that there was an admission on the part of the 4th Garnishee (KenGen) that it holds monies for and on behalf of the judgment-debtor (GDC),” the judge said.

According to the judge, KenGen did not deny that it had never channelled funds to the receivable account belonging to GDC at Co-op Bank since June 2022, although it did not disclose how much it owes GDC.

“In view of the above, where the existence of an unsatisfied decree is undisputed and a decree-holder establishes that the judgment-debtor is owed by a 3rd party unless such debt is disputed, the Court is entitled to garnish such debt to the satisfaction of the unsatisfied decree,” the judge said.

The judge noted that Lantech Africa Ltd had been taken in circles in what he termed as a very unsatisfactory state of affairs.

He said the firm was contracted and spent its finances that GDC continues to benefit from, yet it has not been paid.

“A lawful Arbitral Award in favour of the decree-holder (Lantech) was adopted as a judgment of this Court. Instead of making effort to pay the sum decreed and thereby reduce losses arising out of interest, the judgment-debtor resorted to taking the decree-holder in circles in a game of musical chairs,” he said.

Justice Mabeya further directed Co-op Bank to release the money it was holding on behalf of GDC to Lantech Africa towards the settlement of the debt.

This was after the bank admitted that a bank account identified by Lantech Africa belonged to GDC but went ahead and stated that it had loaned the geothermal drilling company Sh3 billion in 2018, and the account was used to offset the loan.

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Court papers indicated that the ICT firm and GDC entered into an agreement for a fixed term of two years for some services at the Menengai Geothermal Project.

A disagreement arose between the parties, where Lantech blamed the parastatal for financial loss arising out of GDC's failure to observe its obligations under the contract.

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