State-owned Kenya Electricity Transmission Company (Ketraco) has lost a bid to block a liquidation petition filed by a Spanish firm over an unpaid arbitral award now valued at about Sh10 billion.
The High Court dismissed Ketraco’s preliminary objection, ruling that government ownership does not exempt the company from insolvency proceedings and that a creditor does not need Cabinet approval before filing a liquidation petition, Business Daily and the Consumers Federation of Kenya (COFEK) reported.
A decade-old contract dispute
The dispute traces back to April 2013, when Ketraco awarded two contracts to Spanish contractor Instalaciones Inabensa SA for the 400-kilovolt Lessos–Tororo transmission line and the extension of the Lessos substation. The projects were meant to support cross-border electricity trade.
Ketraco terminated both contracts on April 25, 2016, citing unpaid payments and poor performance. An arbitral tribunal later found the utility in breach and in 2019 awarded the contractor €37.37 million (about Sh5.4 billion) plus interest, along with Sh102 million in legal fees, Sh83.5 million in arbitral costs and Sh2 million in administrative expenses, according to COFEK.
The High Court recognised the award in February 2021. Ketraco’s challenges at the Court of Appeal and the Supreme Court failed. A November 2025 High Court ruling put the claim at €62.67 million (about Sh10 billion), plus Sh195.31 million, as at February 2024, excluding further interest.
Who is the creditor?
The petition was filed on May 8, 2024 by C.A. Infraestructuras T&I SLU, which says it acquired the award from Inabensa through a deed of subrogation dated July 28, 2023. It also relies on a Spanish court order of April 18, 2023, recognised in Kenya on June 25, 2026.
Ketraco argued that the matter was sub judice because a separate enforcement case is pending, that a foreign company must be registered locally to sue, and that it could not be wound up without Cabinet approval under the State Corporations Act and section 86(1) of the Public Finance Management Act. The court rejected all three objections.
The judge held that the court “cannot create by implication an immunity that Parliament chose not to enact,” COFEK reported, finding that Ketraco remains subject to the Companies Act and the Insolvency Act.
The ruling does not settle who the rightful creditor is. Ketraco maintains that the petitioner is a stranger to the award, and the judge said the competing positions “cannot be reconciled without evidence,” leaving the question for the full hearing, which will also test whether Ketraco is insolvent.
Risk of a bigger bill
The case has been complicated by parallel claims. Business Daily reported earlier that the Court of Appeal declined to halt garnishee orders allowing the dissolved Inabensa to pursue funds in 17 Ketraco bank accounts, and that the Attorney General had warned Kenya could end up paying Sh30 billion to three firms if the competing claims are not resolved.
No liquidation order has been made. The petition remains alive, and Ketraco can appeal the ruling or negotiate a settlement before the substantive hearing.
Sources: Business Daily | COFEK | Insolvency Guardian
Photo: CT Cooper / Wikimedia Commons (CC BY 3.0)
