KPC reprieve as court lifts bank account freeze order

Kenya Pipeline Company’s tankers at its Eldoret depot.

Photo credit: File | Nation Media Group

The High Court has lifted an order freezing a bank account belonging to the Kenya Pipeline Company (KPC) which had been frozen over an alleged Sh670 million debt.

Justice Francis Gikonyo lifted the order, which was obtained by Multiple ICD (Kenya) Limited on Wednesday, after the court was informed that KPC was not holding any funds on behalf of Zakhem International Construction Ltd.

“By consent of all legal counsel, the garnishee order absolute made on January 16, 2025 is hereby set aside in its entirety,” ruled the judge.

The cargo handling firm said it was not opposed to the lifting of the freeze, after learning that the funds in the Standard Chartered Bank account, had no connection with Zakhem International Construction Ltd.

Multiple ICD obtained a court order, freezing the bank account to clear a debt of $5,180,027 (about Sh670 million).

Multiple ICD had convinced Justice Alfred Mabeya that the KPC bank account was holding about $31 million on behalf of Zakhem International.

The cargo firm added that in a deal with Zakhem International, the parties agreed that its debt of $3,286,590(Sh424.87million) plus interest of $1,893,436(Sh244.77million), was to be settled from the payments made by KPC.

KPC rushed to court stating that it would suffer substantial loss and taxpayers condemned to pay the money, despite providing evidence that it was not holding any money on behalf of Zakhem International Construction.

“That unless this honourable court issues the stay sought, the applicant (KPC) stands to suffer an irreparable and substantial loss, as it will be condemned to pay the garnished amount despite having severally availed evidence that it does not hold any monies on behalf of the judgment debtor (Zakhem), capable of being garnished as the funds claimed by the decree holder (Multiple ICD) were subject to two prior mareva injunctions,” KPC said in the application.

Standard Chartered Bank equally filed an urgent application seeking to suspend the ruling. The lender says in court papers that Multiple ICD was in the process of executing the order and had demanded $5,180,027(Sh669.64 million), which was awaiting verification.

The bank added that the decision was made without its input, having been discharged from the proceedings in a ruling on November 11, 2024.

StanChart revealed that $25 million was paid to Zakhem on July 23, last year, and another $6,308,249(Sh815.50 million) was made on August 23.

Zakhem has also supported the lifting of the freeze saying KPC no longer owes it any money.

“There is sufficient evidence to demonstrate to this court that the garnishee- KPC- no longer holds any funds on behalf of the judgment debtor (Zakhem),” the Lebanese firm said in the application.

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