KenolKobil sues Refinery over deal gone sour

By PAMELA CHEPKEMEI

Kenya: KenolKobil has sued the troubled Kenya Petroleum Refineries Limited (KPRL) demanding Sh1.8 billion.

In a suit filed yesterday at the Milimani Commercial Courts in Nairobi, KenolKobil accuses KPRL of failing to pay for dead stock, which it converted into its own use in breach of their contract.

KenolKobil says it had bought the dead stock from overseas suppliers on credit and is paying loans for the product, which has been used by KPRL, crude oil processors.

KenolKobil through lawyer Desterio Oyatsi, says KPRL had admitted it converted the dead stock for its use since August 2012 and has not paid for it.

It also claims KPRL has deprived it of products it needs to use in its business as working capital since August 2012.

Apart from the dead stock, KenolKobil claims KPRL has deprived it of crude oil.

KPRL and KenolKobil had in February 2012 entered into a contract whereby the oil refinery was to sell and deliver oil for export.

KenolKobil procured a buyer known as BP International so that it could resell the products.

KPRL failed to deliver the products to BP International when a vessel had been chartered to collect them for shipment overseas.

KenolKobil incurred losses of Sh1.2 million for the cancellation of the contract between it and BP International.

The case will be heard on July 22.