Kenya’s KPC accuses Zakhem of concealing assets — Nation Kenya
Kenya Pipeline Company (KPC) has asked the court to order Lebanon’s Zakhem International Construction Ltd to deposit 269 million Kenyan shillings into a joint interest-bearing account of the parties’ lawyers as security for legal costs. KPC claims that its former contractor moved assets beyond the reach of creditors holding court and arbitration awards against the company. This was reported by Nation Kenya.
According to KPC, Zakhem transferred land plots, vehicles and construction equipment to Mokowe Traders Ltd and Bangal Marina Resorts Ltd at low prices. KPC representative Nelson Nyaduwa stated in court documents that these companies are nominee companies of the law firm Ahmednasir Abdullahi Advocates LLP.
Claim for 10.9 billion shillings
In May, Zakhem filed its fifth lawsuit against KPC in seven years, seeking $84.117 million, or 10.9 billion Kenyan shillings, in damages over alleged breaches of the contract for the construction of the 450-kilometre Mombasa–Nairobi oil pipeline. The contractor says it incurred costs due to additional works, project changes and materials not included in the original 2014 contract.
Of the total claim, Zakhem is seeking $65.081 million for additional works and $19.036 million in interest for what the company says were overdue payments by KPC. In January 2023, the parties held negotiations to settle the disputes, after which KPC paid Zakhem $113 million for part of the claims.
More current news is available on the UA.News Telegram channel Telegram.
Allegations of asset disposal
KPC also said that Zakhem, its directors and Ahmednasir Abdullahi Advocates LLP allegedly used legal fee agreements to place more than 3.4 billion Kenyan shillings received from the pipeline company beyond the reach of creditors. Separately, KPC claims that the law firm received more than 3.6 billion shillings in fees which, in the claimant’s view, do not comply with legislation on lawyers’ remuneration.
In court filings, KPC also states that Zakhem directors Abdalla Salim Zakhem and Ibrahim Salim Zakhem transferred more than four acres of land in Nairobi’s Spring Valley area to Mokowe Traders Ltd for 100 million shillings, although KPC values the property at more than 1.6 billion shillings. Another 5.2-acre plot in Ruaraka, where Zakhem’s headquarters is located, was allegedly transferred for 250 million shillings, while its market value is estimated at 1.3 billion shillings.
KPC also claims that Lebanon’s honorary consul in Kenya, Abdalla Salim Zakhem, used diplomatic status and police protection outside the company’s headquarters to obstruct the recovery of assets. Judge Francis Gikonyo is due to hear the parties’ arguments on the application for security for costs on November 19.
