NAIROBI, Kenya, July 3 – Kenya Pipeline Company (KPC) has asked the High Court to dismiss a fresh Sh10.9 billion claim filed by contractor Zakhem International Construction, arguing that all disputes arising from the Line 1 replacement project were fully settled through a court-approved consent agreement and subsequent payments.
In its defence, filed through Wekesa & Simiyu Advocates, KPC says Zakhem’s claim for $84.1 million—comprising $19 million in alleged unpaid contractual dues and $65.1 million in interest—is legally untenable because the issues were conclusively resolved through earlier litigation, negotiated settlements and a consent judgment.
The state-owned pipeline operator argues that the contractor is attempting to reopen disputes that were settled following negotiations in early 2023 and formalised through a consent judgment in September that year.
According to KPC, the consent agreement provided that all claims relating to Contract No. SU/QT/032N/13 would be deemed fully and finally settled once its terms had been fulfilled, adding that it had complied with all the agreed obligations.
The company contends that the latest suit is barred by the legal doctrines of res judicata, limitation of actions and estoppel, maintaining that substantially similar claims had either been litigated or withdrawn in earlier court proceedings.
KPC also disputes Zakhem’s claim for $65.08 million in commercial interest, arguing that the contract only allowed interest on overdue payments at 0.5 percent per month and did not provide for interest based on prevailing commercial bank lending rates.
The company further says it settled amounts arising from an earlier partial judgment, including payments made directly to the Kenya Revenue Authority under agency notices and through court-ordered garnishee proceedings, thereby extinguishing any further entitlement linked to extension-of-time claims.
According to the defence, negotiations held between January and February 2023 resulted in an agreement on all outstanding issues under the 2014 Line 1 replacement contract before both parties executed the consent judgment.
KPC argues that once the consent terms were implemented, Zakhem could not institute fresh proceedings arising from the same contract unless the consent judgment was first set aside by the court.
The company also says Zakhem withdrew the balance of its claims in an earlier suit in September 2023 and later filed another case in January 2026 seeking similar reliefs before withdrawing it weeks later.
KPC maintains it honoured its contractual obligations throughout the project, paying the contractor hundreds of millions of dollars through interim payment certificates, material payments, variation orders and court-directed settlements.
Zakhem is seeking about $84.1 million from KPC, claiming unpaid contractual sums and accrued interest.
The High Court will determine whether those claims survived the earlier consent judgment and subsequent settlements.
