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Supreme Court Upholds Ruling Ordering Kebs to Pay Foreign Firm Sh2.2 billion

It is now going to cost the taxpayer Sh2 billion to clean up a Kenya Bureau of Standards (Kebs) mistake, the Supreme Court has ruled. The state agency had filed a motion seeking to review an earlier judgment that found it liable for breaching a contract with GeoChem Middle East nine years ago.

Geochem was seeking Sh248 million in unpaid invoices, Sh46 million used to set up a laboratory, Sh120 million operating expenses and Sh1.6 billion for lost income and interests. An arbitrator found Kebs liable and ruled that they should pay the firm Sh2.2 billion.

“It is clear to us that the application before us is a disguised appeal, which seeks to re-open matters already determined with finality by this court,” a ruling from the Supreme Court said.

Read: List Of Low Quality Tissue Brands Withdrawn By KEBS

“An application for review was not intended to give a party an opportunity to appeal or relitigate its case. Where such a review is sought, an applicant must lay a basis to the satisfaction of the court that the application for review satisfies the set criteria.”

The case goes back to 2009 when Kebs set out to commence the inspection and testing of imported petroleum products. Subsequently the tender was awarded to GeoChem, a Middle East firm.

The foreign company went ahead and established a petroleum inspection facility at the Port of Mombasa. The premises was launched in August 2009 when Geochem went about their business, serving oil marketers on behalf of KEBS.

Read also: KEBS Raids Outlets Selling Fake Sanitizers in Nairobi

When Geochem asked to be paid four months later, Kebs asked the Kenya Revenue Authority (KRA) to collect inspection fees from the oil marketers on its behalf. KRA collected the fees and according to court filings, proceeded to deposit the funds with the national treasury between March 2010 and March 2012. Kebs did not remit the funds to Geochem.

A few months to the lapse of the contract, Kebs wrote to Geochem to inform them that the government had suspended the contract until further notice. This prompted the foreigner to file a claim through an arbitrator

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Written by Vanessa Murrey

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