Ketraco appeals freeze of 17 accounts over Sh10bn Inabensa payout

Wooden gavel. [Courtesy/GettyImages]

The Kenya Electricity Transmission Company (Ketraco) has moved to the Court of Appeal after its 17 bank accounts were frozen over a Sh10 billion payout to Spanish company Instalaciones Inabensa.

In its court papers filed by Dennis Mosota and Emmanuel Mumia, the State-owned firm argued that the orders issued by High Court Judge Peter Mulwa had crippled its operations.

Mosota and Mumia argued that Ketraco plays a critical role in the country; hence, allowing its accounts to be frozen in a bid to have Inabensa recoup the money amounts to a security threat.

The two lawyers said that, at the same time, employees who hoped to go home with their Christmas salaries are likely to have a bleak festive season, as there is a likelihood that the power firm will not honour its obligations if the orders are not lifted.

"The freezing of the accounts has already caused serious operational paralysis. The applicant faces imminent failure to honour its contractual relationships with over 540 members of staff who are entitled to salaries and benefits. Should Ketraco be unable to honour its obligations to its employees, it risks industrial and legal action with the appurtenant ramifications," argued Mosota.

While it moved to the Court of Appeal, Ketraco also filed an application before the Commercial Court seeking to suspend the orders.

The lawyers argued that Inabensa would not suffer any harm if the orders are lifted to allow the appeal to proceed.

They raised concerns over who would receive the money, as the Spanish firm had allegedly folded.

According to them, it would be impossible to trace the money if Ketraco wins the case.

"This honourable court must intervene to stay execution, for unless it does so forthwith, the public funds shall be irreversibly dissipated. The decree holder, having been liquidated, cannot be said to be a going concern capable of refunding any monies carted away on the strength of the garnishee orders. Therefore, in the event that the applicant is successful in its intended appeal, it will bear the ignominy of a Pyrrhic victory," continued Mosota.

On his part, Mumia said that on December 11, 2015, the court issued orders attaching all the money held in Ketraco's accounts at NCBA Bank Kenya PLC, Kenya Commercial Bank, Standard Chartered Bank, Cooperative Bank of Kenya and Citi Bank.

He argued that a single stroke of the judge's pen had a ripple effect on millions of Kenyans who rely on the company for electricity transmission.

He asserted that the impact would also be felt in neighbouring countries that are connected to Kenya's electricity grid.

"This will abruptly halt the applicant's operations, such as electricity transmission and the maintenance of all electricity transmission lines, with the potential of plunging the whole country into an electricity blackout for want of electricity transmission, with devastating and irreversible ramifications to critical infrastructure and national security.

"Any electricity blackout will equally cripple the Kenyan industrial sector and essential services such as medical care. Such a scenario could easily portend socio-economic unrest," said Mumia.

The lawyer urged the court to intervene, saying the freeze would adversely affect public safety, the economy, essential services and energy security.

"No prejudice shall be occasioned to the decree holder by the grant of a temporary stay, whereas refusal to grant the same shall occasion irreparable harm to the applicant and the Kenyan public at large," he argued.