How oil company Glencore lost Sh4 billion appeal

A decade-long battle between the Kenya Pipeline Company (KPC) and London-based Glencore Energy over Sh4 billion compensation in a recent decision after the Supreme

Judges said it was cynical for Glencore, upon burning its fingers in a scheme it was consumed by Triton, to turn around and sue KPC when the State was not a party to the dealings.

The judges said the Constitution can not be protected by law. "It espouses and commands a respect for the rule of law and enjoins short to do justice in accordance with the law," they said.

According to Judges of the highest court in the land, the issues raised by the UK Company were Notable Significant Points of Law,

The Judges led by Chief Justice David Maraga The Triton Petroleum Company Limited (Triton) and Glencore Energy, and the Collateral Financing Agreement between the two companies.

The dispute started when Triton Petroleum Company, owned by businessman Yagnesh Devani withdrew oil worth over Sh7 billion from KPC storage facilities and sold it to marketers.
Glencore, one of the financiers of Triton, sued KPC arguing that the State agency was at fault for not informing financial that it had released the oil for sale

In a letter dated January 5, 2009 addressed to Glencore, KPC recalled and rescinded its It was confirmed that, on December 2008, it was erroneous.

The correct position, KPC said, was held for Glencore was nil. The company then claimed the value of 31,752,390 metric tons of gas oil and when it was not claimed, it moved to claim the value of the price of gasoline.

Glencore said in the

The deal was contained in a Collateral Financing Agreement, which also said that KPC would receive, and KPC would receive, store petroleum products imported from Kenya and deliver them to Triton.
After hearing the case, the High Court found KPC appealed and three judges of the Appellate Court reversed the decision that it was an elaborate scheme hatched and executed by Glencore, using Triton as a front, which allowed the company to enter the Kenyan oil market. ithout license, to move in itself, to "flagrant illegality".

"That illegality defeats all its claims herein against the appellant and the learned judge should have found. Injured Patrick Kiage, Gatembu Kairu and Kathurima M'Inoti said.

The firm then sought to move to the Supreme Court but the application was rejected by the Court of Appeal. In the decision, Justices Maraga, Deputy Chief Justice Philomena Mwilu, Smokin Wanjala, Njoki Ndung'u and Isaac Lenaola