(NAIROBI, KENYA) – Kenya’s High Court has cleared the way for a Spanish firm to pursue the liquidation of Kenya Electricity Transmission Company (Ketraco) over an unpaid award now valued at KES 10 billion ($77.1 million / £58.8 million).
The court dismissed Ketraco’s preliminary objection, ruling that state ownership does not automatically exempt the transmission company from insolvency proceedings.
It also ruled that Cabinet approval is not required before a creditor files a liquidation petition.
The dispute stems from two contracts awarded in April 2013 to Spanish contractor Instalaciones Inabensa SA.
The contracts covered construction of the 400 kilovolt Lessos to Tororo transmission line and extension of the Lessos substation.
The projects were intended to support electricity trade between Kenya and neighbouring countries.
Ketraco terminated the contracts on 25th April 2016 after a dispute over payments and performance.
Inabensa challenged the termination through arbitration.
The tribunal found Ketraco in breach and awarded the contractor €37.37 million (KES 5.4 billion / $41.6 million) plus interest in 2019.
The company was also awarded KES 102 million ($786,000) in legal fees, KES 83.5 million ($643,000) in arbitral costs and KES 2 million ($15,400) in administrative expenses.
The award was recognised and enforced by the High Court in February 2021.
Ketraco challenged it through the courts, including the Court of Appeal and the Supreme Court, but failed to overturn the decision.
The claim subsequently grew to €62.67 million (KES 10 billion / $77.1 million) and KES 195.31 million ($1.5 million) as at February 2024, excluding further interest.
The current liquidation petition was filed on 8th May 2024 by C.A. Infraestructuras T&I SLU.
The company says it acquired the rights to the award from Inabensa through a deed of subrogation dated 28th July 2023.
The identity of the rightful creditor remains contested.
In its objection, Ketraco argued that the liquidation petition was sub judice because a separate case concerning enforcement of the same award remained pending.
It also challenged the Spanish company’s standing.
Ketraco said liquidation required Cabinet approval under laws governing state corporations and public finances.
The court declined to resolve the overlap between the proceedings at this stage.
“The record discloses deep contestation over both the subject matter of the two proceedings and the identity of the parties, particularly the creditor,” the judge said.
The court rejected Ketraco’s argument that a foreign company must be registered locally to sue in Kenya.
Justice Mugambi said the question was whether the claimant had a genuine stake in the dispute.
On Ketraco’s public status, the court found that the company remained subject to the Companies Act and Insolvency Act.
“This court cannot create by implication an immunity that Parliament chose not to enact,” the judge said.
The court also found that section 86(1) of the Public Finance Management Act did not make Cabinet approval a precondition.
“It neither ousts the court’s jurisdiction nor makes Cabinet approval a precondition to a creditor’s petition,” said the judge.
The court noted that the original decree holder was Instalaciones Inabensa SA.
C.A. Infraestructuras claimed to have succeeded to its rights through a deed dated 28th July 2023, a Spanish court order dated 18th April 2023, and recognition of that order by Justice Rutto on 25th June 2026.
Ketraco had also argued that the company is a stranger to the award whose claim has never been recognised.
But the court said the competing positions could not be reconciled without evidence.
“These positions cannot be reconciled without evidence,” said the judge.
The judge added that public interest and the company’s role in providing an essential service could be considered when deciding whether liquidation was appropriate.
“Those considerations go to the outcome of the Petition, not to the competence of the Court to hear it.”
Inabensa was declared bankrupt and dissolved in Spain.
Its insolvency administrator, Ernst & Young Abogados, could assert rights over the award on behalf of creditors.
The Attorney General has warned of a risk that Kenya could face competing claims to the same debt.
Earlier, Inabensa had obtained orders affecting 17 Ketraco accounts, while C.A. Infraestructuras pursued liquidation separately.
In a separate ruling delivered in November 2025, the High Court dismissed Ketraco’s application for KES 185.3 million ($1.4 million) in security for legal costs, describing the decree as final, binding and enforceable.
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