NAIROBI: A petroleum company is claiming close to half a billion shillings from a cigarette manufacturer over a stalled Liquefied Petroleum Gas (LPG) storage project.
Oryx Energies Kenya has sued Mastermind Kenya Ltd and is demanding compensation amounting to Sh470 million over the stalled Syokimau project in Nairobi.
It claims money was lost after the cigarette maker lodged a complaint with the National Environment Management Authority that resulted in orders that the project be stopped until the matter is settled.
It has accused Mastermind of damaging its business in the country. "Their action (Mastermind) actuated to malice and bad faith," Oryx's Project Manager Edward Rutto claimed in an affidavit filed in support of the claim.
The 2012 tussle between the two companies moved from the NEMA tribunal to the High Court, which settled the case in favour of Oryx. The company now laments it incurred losses amounting to more than Sh166 million in the two years the case was in the corridors of justice.
"By the time the stay order was issued by the tribunal, the construction of LPG project was approximately 50 per cent complete. This was a critical stage of the construction as the materials for steel works had already been procured and were already on site," the company claimed in its court papers.
The project, at the current currency exchange rate, would have cost the company Sh5.2 billion and its aim was to supply cooking gas to residents of Nairobi and its environs.
According to Mr Rutto, Mastermind was aware of the conditions under which the licence was given, though it went ahead to challenge the matter in the tribunal.
Rutto in his sworn affidavit accused the firm, which manufactures a range of cigarette brands, of double play and derailing the process.
FILE OBJECTION
He said Mastermind had agreed to file its objection to the project within two weeks and if this did not happen, then the Swiss company with its presence in Kenya would commence its construction.
Mastermind is said to have filed an appeal, six months into construction.
"The defendant (Mastermind) had indicated it would write within two weeks, indicating issues it had with the project and the scientific basis for their opposition. The defendant failed to take any action in those 2 weeks and only filed the appeal when the construction was 50 per cent complete, " Rutto said in his affidavit.
Oryx had obtained an environmental impact assessment licence in 2012 but Mastermind challenged the decision, leading to the current tussle.
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