NAIROBI, Kenya, June 15 – Kenya Pipeline Company (KPC) has cautioned shareholders and investors following the filing of a Sh10.9 billion lawsuit by contractor Zakhem International Construction Limited over claims arising from the Line I Replacement Project.
In a cautionary announcement, KPC said the case has been filed at the High Court in Milimani under HCCOMM E346 of 2026, with the contractor seeking compensation for alleged unpaid contractual claims and interest.
According to court documents, Zakhem International Construction is seeking a total of $84.1 million (Sh10.9 billion), comprising $19 million in extension-of-time claims and $65.1 million in interest related to delayed payments under the project.
“Zakhem International Construction (ZIC) has filed a lawsuit against the Company at the High Court of Kenya Milimani HCCOMM E346 of 2026: Zakhem International Construction Limited vs Kenya Pipeline Company PLC,” KPC said in the notice.
The dispute relates to the procurement, construction, testing and commissioning of the Line I Replacement Project, a key infrastructure investment aimed at enhancing the transportation of petroleum products across the country.
KPC said it intends to contest the claim and has instructed its lawyers to take the necessary legal steps to defend the case.
“The Board, based on the information currently available and the preliminary legal advice it has received from the Company’s advocates, is of the view that the Company has credible legal and factual grounds upon which to contest the claim,” the company said.
The state-owned firm further assured investors that the litigation does not affect its operations, financial position or strategic plans.
KPC said it will continue to comply with disclosure requirements under the Capital Markets Authority and Nairobi Securities Exchange regulations and will provide updates as the matter progresses through the courts.
“The Board, based on the information currently available and the preliminary legal advice it has received from the Company’s advocates, is of the view that the Company has credible legal and factual grounds upon which to contest the claim,” the company said.
The state-owned firm further assured investors that the litigation does not affect its operations, financial position or strategic plans.
KPC said it will continue to comply with disclosure requirements under the Capital Markets Authority and Nairobi Securities Exchange regulations and will provide updates as the matter progresses through the courts.
