An Irish firm has lost a court battle in which it was seeking the cancellation of a Sh1.4 billion tender award for the supply of fuel pumps to the Kenya Pipeline Company (KPC).
Ruhrpumpen Limited had taken Lebanese company Zakhem International Construction Limited and the KPC to court over the tender.
The Lebanese firm is constructing the Sh44.2 billion Mombasa-Nairobi pipeline and the pumps were to be provided through sub-contracting.
In his ruling justice Fred Ochieng said Ruhrpumpen had failed to show that there was any contract between them and Zakhem International.
“The prayer in the application to stop any bids is inconsistent with the plaintiffs claim that there was already a contract if the process had only gone to the stage where there were bids there is no basis for which the plaintiff can claim legal right,” he said.
Ruhrpumpen claimed KPC unlawfully pushed it out of a deal to supply the pumps despite Zakhem recommending them to the State agency and instead choosing Japan’s Ebara Corporation.
Mr Justice Ochieng ruled that it was not the role of the court to decide for the parastatal which bid to pick.
“The plaintiff has not put any legal claim and at most KPC could be said to have rejected the recommendations made by Zakhem,” he said. “ There is nothing to show that KPC had an obligation to accept the recommendations made.”
The Irish firm admitted in court that while they had not been listed by the State agency as licensed suppliers they had an agreement with Zakhem to supply the pumps.
The Irish company said in court documents that it had proposed to supply flame proof pumps for $15.5 million (Sh1.4 billion) while Ebara bid $19.8 million (Sh1.8 billion).
KPC argued that the deal signed with Zakhem did not provide for any additional payments for items needed to complete the pipeline.
The corporation also maintained that the Sh44.2 billion covers every item and labour required for the multi-billion shilling project.
The State agency told the court that the Irish firm was knocked out after discovery that it was not a listed manufacturer, an express condition set for the bidders.
Ruhrpumpen told the court that one of the bidders had pulled out of the tender after realising that the items had been overpriced and they had brought out cheaper and better quality pumps than Ebara.
“It appears that the plaintiff were well aware that KPC had the final say and while they had good reason to believe that the first defendant would give them the contract, no contract would exist between the parties independent of KPC who are the end users,” said the judge.