Kenya: KPC Challenges Total Oil Court Order on Triton Petroleum
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Wednesday, 21 January 2009 |
 Kenya Pipeline Company has moved to court to challenge an order barring
it from disposing of some 500 metric tonnes of petroleum products
belonging to Total Kenya.
In an application before Milimani Commercial Court this week, KPC
through lawyer Mohammed Nyaoga, said the court order obtained by Total
Kenya last week was almost impossible as the said products were no
longer available at its Kipevu Oil Storage Facility. The oil product in
dispute is said to have been purchased from Triton before the company
was placed under receivership.
Total Kenya went to court and obtained orders barring KPC from
releasing the 5000 metric tonnes of automotive fuel oil worth Sh360
million held in trust on account of Triton Petroleum. The oil
company said the products should be withheld until the case has been
heard and determined.
On Wednesday however, Mr Nyaoga told Lady Justice Joyce Khaminwa that
KPC would not compile with the orders as it was not holding any
petroleum products at Kipevu or in the entire pipeline system on behalf
of Triton Petroleum. Through lawyer Njoroge Regeru, Total told the
judge that KPC unilaterally altered its credit of stocks at Kipevu Oil
Storage Facility from 500 metric tonnes of fuel oil to 3000 metric
tonnes valued at $3,140,794 (Sh244,981,932). Total had paid
Sh116,495,550 to the Kenya Revenue Authority as taxes towards the
purchase.
Mr Nyaoga however in reply said the credit was occasioned by the
discovery that Triton did not have sufficient oil products to cater for
the entire credit. Mr Nyaoga further submitted that according to the
custom in the petroleum industry, Total Kenya failed to disclose the
Adjustment of Stock Entitlement (ASE) schedule. ASE shows stock
positions of the marketers and is circulated to oil marketers by KPC to
elicit comments.
He said KPC said it was likely to face contempt proceedings and a line
of suits by third parties for matters which are beyond its control. He
urged the court to set aside the orders and refer the matter for
arbitration.
Total in response said in the event the 5000 metric tonnes of fuel oil
was either lost or unrecoverable, and given the current status of
Triton, it would render the arbitration and entire legal process
nugatory. The case comes a few days after another suit filed by KCB
against Triton for Sh2 billion guaranteed through various debentures to
import crude and refined oil to the Kenyan market. The case was
adjourned to January 26.
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