UBA Kenya Bank has sued an Indian firm Jyoti Structures, which is in liquidation, seeking to recover more than Sh267 million ($2.6 million) it advanced the company which built the Isinya-Suswa electricity transmission line.
The bank, which has also enjoined Kenya Electricity Transmission Company Limited (Ketraco) as a party to the suit, claims that it is in danger of losing the money advanced to Jyoti.
The lender has obtained a court order restraining Ketraco from channelling the payment to the ailing firm unless done through UBA Bank.
“A temporary injunction be and hereby issued restraining the second defendant, its agents, servants and or employees from remitting and or making any payment or settling any monies or financial obligations owed by 2nd defendant to the first defendant except through the 1st defendant’s USD bank account…held with the plaintiff pending hearing determination of the application,” reads a court order issued by Justice Joseph Onguto on January 29.
The bank says it gave credit to the firm based on the strength of its contract with the Ketraco as the security.
The firm on its part agreed to channel all the payments from the State agency through its accounts with UBA. The recoveries were to be done through a check off from the account as the cash was received.
Ketraco assured UBA that all payments to the firm would be channelled through the Indian firm’s account with the bank.
However, it alleges that in December 2016 it discovered the agreement has been breached when parts of the payment from Ketraco were made to Jyoti’s bank account at Diamond Trust Bank #ticker:DTK.
The Indian firm had also allegedly diverted another payment from Tanzania Electric Supply Company Limited to another bank instead of the plaintiff’s sister company UBA Tanzania Limited as earlier agreed.
The bank claims that the power transmission line was commissioned in August last year and therefore it says that Ketraco can pay the sum it owes the Indian firm without involving UBA.