High Court orders KRC to settle 26-year Telkom debt

The Kenya Railways Corporation has been slapped with a Sh217 million bill for services rendered by Telkom Kenya over a span of 26 years.

The corporation racked up the bill between 1980 and 2006 for voice and data services.

The railway company, owned by the State, admitted to owing Telkom the amount in 2013 but a follow-up to recover the money by the telco have not been successful.

The mobile service provide went to the High Court seeking to recover the outstanding amount plus legal fees and 14 per cent accrued interest tabulated over four years estimated at Sh30 million.

Everlyn Nyaboke, testifying for Telkom, said the two corporations had had several meetings to negotiate and reconcile the bills and in 2014 the Kenya Railways Corporation (KRC) wrote to Telkom seeking to pay Sh58 million.

But a year on, Ms Nyaboke told the court, nothing was forthcoming.

The court heard that before 2000, the bills were being issued by the now-defunct Kenya Posts and Telecommunications Corporation (KPTC).

Asked whether Telkom kept a copy of the bills, Nyaboke said the telco relied on its IT system to reprint the bills whenever they were needed.

Telkom presented in court a 495-page document in which more than 470 pages contained invoices and bills sent to KRC.

No letterhead

KRC Managing Director Athanas Maina denied that KRC or its board of directors had mandated any agent to negotiate a settlement agreement with Telkom.

He also denied that he had authorised any person to sign a letter on his behalf committing to pay the debt to Telkom.

Some of the bills were also contested on the grounds that they did not bear letterheads and had been raised by Telkom rather than its predecessor, KPTC.

One letter dated November 19, 2014, allegedly signed on behalf of the KRC managing director was deemed to be a forgery.

Mr Maina claimed that the demand by Telkom was filed out of time and that the bills were computer-generated.

During cross-examination, the MD insisted that any agreement for a settlement should have been presented to its top management.

Pressed further, he, however, admitted that the alleged settlement agreement had been signed by two KRC managers.

He, however, added that for routine letters to be genuine and authentic, they do not require the KRC board’s approval or the KRC seal.

Justice Joseph Onguto, who died last week, on February 2 this year found that the claim by Telkom was genuine and that correspondence between it and KRC were proof enough that the latter owed the former.

“I am satisfied and now conclude that the claim by Telkom is valid and has been established to the required standard. I accordingly enter judgement for Telkom in the sum of Sh217,100,360.90 together with interest,” ruled the judge.

Submission of forgery

“I have great doubts about KRC’s case that the bills are false and merely ‘computer generates’ and no more. I must reject KRC’s stand and submission of forgery.”

The court found that on three occasions, KRC admitted its indebtedness.

Telkom, which is partially owned by the Government, has for a long time struggled financially.