Kenya Pipeline Company (KPC) received a major reprieve after the High Court lifted a freezing order on one of its bank accounts on Wednesday, which had been issued in relation to an alleged debt of Sh670 million ($5.18 million).
The order, which had been obtained by Multiple ICD (Kenya) Ltd., was overturned after the court was presented with evidence that KPC was not holding any funds on behalf of Zakhem International Construction Ltd.
“By consent of all legal counsel, the garnishee order absolute made on 16. 01. 2025 is hereby set aside in its entirety,” stated Justice Francis Gikonyo of Milimani High Court Commercial and Tax Division
This ruling came after Multiple ICD confirmed it had no objection to the lifting of the freeze, following the realization that the funds held in KPC’s Standard Chartered bank account were not connected to Zakhem International Construction Ltd.
The dispute began when Multiple ICD obtained a court order freezing the KPC account, seeking to clear a debt of $5,180,027, approximately Sh670 million.
Multiple ICD had previously convinced Justice Alfred Mabeya that the KPC account in question was holding $31 million on behalf of Zakhem International.
According to Multiple ICD, an agreement between KPC and Zakhem stipulated that a debt of $3,286,590, plus interest of $1,893,436, was to be settled through payments made by KPC.
However, KPC rushed to court seeking to set aside the orders, arguing that the freezing order would cause significant harm to the company, as it did not hold any funds on behalf of Zakhem.
The state corporation presented evidence showing that it was not liable for the alleged debt.
In its application, KPC warned that “unless this honourable court issues the stay sought, the applicant (KPC) stands to suffer irreparable and substantial loss as it will be condemned to pay the garnished amount despite having severally availed evidence that it does not hold any monies on behalf of the judgment debtor (Zakhem) capable of being garnished.”
Furthermore, KPC argued that the funds sought by Multiple ICD were already subject to two prior mareva injunctions, which had prevented their garnishment. KPC’s application emphasized the potential repercussions for taxpayers, who would bear the financial burden if the garnishment were not lifted.
Standard Chartered Bank, which held KPC’s account, also filed an urgent application to suspend the court’s orders preserving the funds pending the repayment of the debt.
In its court documents, the bank stated that Multiple ICD was in the process of executing the freezing order and demanding $5,180,027, which was awaiting verification.
The bank highlighted that it had been excluded from the proceedings, having been discharged from the case following a ruling on November 11, 2024.
Standard Chartered argued that had it been given the opportunity to be heard, it could have clarified that the $31 million in question had already been paid to Zakhem in full.
The bank disclosed that it had made two separate payments: $25 million on July 23, 2024, and $6,308,249 on August 23, 2024, both to Zakhem International.
These payments, the bank noted, had been made from KPC’s account with the bank, effectively clearing any obligations KPC might have had to Zakhem.
On its side, Zakhem International Construction Ltd. supported the lifting of the freeze, stating that it no longer had any outstanding financial claims against KPC.
“There is sufficient evidence to demonstrate to this court that the garnishee KPC no longer holds any funds on behalf of the judgment debtor (Zakhem),” the Lebanese construction company said in its application.
With all parties presenting compelling evidence to the contrary, Justice Gikonyo agreed to lift the garnishee order, allowing KPC to resume its operations without the financial encumbrance of the frozen funds.
 successfully had a freezing order lifted by the High Court, which had been placed on its bank account over an alleged Sh670 million debt. The){kind=link}