The Kenya Pipeline Company (KPC) state corporation has been granted a 30-day prayer by Justice Grace Ngenye Macharia to file an appeal disputing the multibillion shilling row with KenolKobil over a contract breach.
The attempt by KPC to stop Rubis from implementing an arbitration judgement of Sh2.4 billion over a breach of an agreement was rejected by Justice Macharia after citing a similar litigation of a disagreement originating from a 1999 agreement between KPC and Kenya Oil Company Limited, now Rubis Energy Kenya PLC.
“Having listened and taken considerations from both sides, the prayer is hereby not for consideration by a single judge,” observed Macharia.
According to the terms of the contract, signed on May 10, 1999, KPC undertook to provide transportation of Rubis petroleum products through its systems to a number of predetermined locations.
The dispute is thought to have started after Lawyer Ahmednasir Abdullahi, an arbitrator, decided to award the Kenya Oil Company and Kobil Petroleum Limited a total of Sh6.5 billion on December 10, 2009, including damages for loss of consumer goodwill, cost of public relations, marketing campaign, and loss of financial goodwill after KPC broke the agreement.
By neglecting to allot its storage space, Rubis accused KPC of failing to allow the berthed of ships carrying its petroleum products valued Sh9 billion.
The arbitrator criticized the state corporation for let the defunct Triton Petroleum Company to use its storage facilities for oil products, thereby lowering the amount of ullage that was accessible in the sector.
