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Trader wins back gas cylinders after seven-year debt row
A July 2016 meeting led to an arrangement where Total retained the cylinders until the debt was settled—an agreement Hunkar’s director later acknowledged in court.
The High Court has ordered oil marketer, Total Kenya (presently TotalEnergies Marketing Kenya Plc), to release thousands of gas cylinders it withheld from a trader, Hunkar Trading Co. Limited, ending a seven-year dispute over unpaid cylinder exchange balances.
Total Kenya seized 4,425 cylinders belonging to Hunkar Trading in July 2016 as security for an unpaid debt of Sh6.7 million accumulated between 2014 and 2016.
However, the court ruled that while the initial withholding was permissible, Total’s continued detention of the cylinders became unlawful once Hunkar demanded their return and filed suit in March 2017.
In its judgment on a case filed by Hunkar, the court directed Total to release the cylinders within 30 days, emphasising that creditors cannot indefinitely retain another company’s property as leverage.
“A lien is a shield, not a sword,” the court stated, stressing that self-help measures must yield to lawful debt recovery processes.
The dispute stemmed from the LPG Cylinder Exchange Pool, a regulatory framework allowing consumers to swap gas cylinders of different brands at any outlet. Both companies were members of the scheme and had signed its governing agreement.
Under the system, when one company collected more cylinders belonging to another, a deficit arose and was settled through invoicing.
The rules required payment within 35 days, with interest of two per cent per month on overdue amounts.
Court records revealed that Hunkar Trading accumulated deficits over several months, prompting Total Kenya to demand payment in early 2016.
Hunkar issued post-dated cheques, but Total rejected them, arguing they violated the agreed credit terms.
A July 2016 meeting led to an arrangement where Total retained the cylinders until the debt was settled—an agreement Hunkar’s director later acknowledged in court.
The court upheld Total’s claim for the Sh6.7 million debt, awarding interest at court rates from the counterclaim filing date. It also affirmed the contractual provision imposing interest on overdue balances.
However, the court ruled that neither the exchange agreement nor energy regulations permitted members to retain competitors’ cylinders as security. The rules mandate returning cylinders to designated collection points within specified timelines and prohibit actions that remove rivals’ cylinders from circulation.
While acknowledging Total’s initial lawful possession following the July 2016 agreement, the court found that Hunkar’s March 2017 demand and lawsuit revoked consent, rendering further detention wrongful.
Hunkar sought Sh14.5 million in replacement costs, claiming the cylinders deteriorated in storage.
The court dismissed this, citing insufficient proof—no invoices, valuation reports, or expert evidence were provided.
Instead, the court awarded Hunkar Sh500,000 in general damages for unlawful detention, clarifying that the amount aimed to uphold property rights rather than penalize Total. The two monetary awards were ordered to offset each other.
Additionally, the court barred Total from enforcing its monetary judgment until it complied with the cylinder release order.
