Kenya Railways gets boost in Telkom debt row
Kenya Railways Corporation Managing Director and CEO Philip Mainga during an interview at his office on March 16, 2021.
The Court of Appeal has opened the door for Kenya Railways Corporation (KRC) to challenge Sh217 million awarded to Telkom Kenya Ltd for voice and data services rendered to the parastatal.
However, appellate judges Roselyn Nambuye, Wanjiru Karanja and Hannah Okwengu allowed KRC’s appeal on the condition that it deposited Sh60 million to secure its assets from public auction.
The judges stayed the High Court orders, which had given Telkom room to attach and sell the corporation’s assets to recover the debt.
Kenya Railways, in its submissions, told the appellate court that they were ready to concede to an order of stay of execution being granted subject to substantial security being deposited to secure its assets.
“Execution, if allowed to proceed, may include attachment and sale of KRC properties, which may lead to a loss that may not be recoverable,” observed the judges.
The State corporation also argued that it was a public institution with immense properties capable of settling any debt in the event its appeal was unsuccessful.
Telkom on its part urged the court to dismiss KRC’s application contending that the intended appeal did not raise any arguable issue as the High Court had already entered a judgment against the corporation to settle the long-standing debt.
On February 2, 2018, the late justice Joseph Onguto ordered Kenya Railways to pay Telkom Sh217 million for voice and data services it rendered to the institution between 1980 and 2006.
The KRC admitted owing Telkom in 2013 but efforts to recover the lump sum was unsuccessful.
