Kenyan LPG distribution slowed by lawsuit
Thursday, Jun 28, 2018
Kenya’s rollout of distribution of subsidised US$20 LPG cylinders is facing further delays owing to legal suit filed by Attain Enterprise Solutions.

High Court Judge Grace Nzioka has directed the National Oil Corporation of Kenya (NOCK) and Attain Enterprise Solutions to appear for directions in preparation for full hearing of suit filed in December last year.

In January 2018, Attain won order suspending tender for mobile phone-based payment system advertised by state owned NOCK. The platform is key to the delivery of subsidised gas to cut reliance on kerosene and charcoal.

Under Kenya’s government plan, poor homes will acquire LPG filled in 6kg cylinders with other accessories at the discounted price of US$20 down from current market rate of US$50 to promote gas as a clean source of energy.

Nzioka in directing the parties to work towards finalising the main suit instead of arguing over the interim application said the matter involved public benefit at large but interests of applicant too must be protected.

“I have considered the application herein under consideration and the submissions made. It will be in the interest of the parties and expeditious disposal of the matter if the parties prepared for hearing of main suit,” she said.

The judge was s ruling on the application filed by NOCK seeking to strike out the suit arguing the state firm does not have any contractual relationship with privately-owned Attain.

In court papers, Attain said it was awarded the contract on July 10, 2017 after which it embarked on developing the platform as spelt out in contract.

In its defence NOCK said Attain was notified of award on July 10, 2017 but responded on August 23, 2017, outside the 30-day period for formally accepting the award.

The High Court suspended the tender for the mobile phone-based payment system after Attain sued NOCK for terminating its contract and advertised for fresh tenders.

“An injunction … is hereby granted restraining the defendant from cancelling the award granted to the plaintiff by the letter dated July 10, 2017 pending the inter parties hearing,” ordered Justice Joseph Onguto.

Attain argued it had also started discussing the financials, where it was agreed that NOCK will pay Attain US$3 million in three instalments. The company said it was further agreed NOCK will pay Attain US$0.2 for every transaction carried out through the USSD platform to be developed by the firm.

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