Sh10bn court cases expose Kebs to high risk of losses

Court cases with an estimated value of Sh10 billion have exposed the Kenya Bureau of Standards (Kebs) to losses in the wake of the agency’s war on counterfeit products.

Kebs managing director Benard Njiraini says the agency is staring at the high risk from 120 suits currently before the courts.

“Kebs is currently highly exposed to litigation risk. These cases have a total cash value of over 10 billion Kenya shillings and the agency needs the support of the ministry in handling of these risk,” Mr Njiraini said.

Mr Njiraini said 17 of the cases are high risk due to their inherent consequences adding that they need legal assistance from the parent ministry of Trade and Industrialisation to sustain the fight.

The revelations on the potential losses come at a time taxpayers were forced to foot a court case that Kebs lost against a foreign firm contracted to inspect fuel imported into the country.

In March, taxpayers were forced to foot a Sh2 billion compensation claim by a Dubai-based firm for breach of a fuel inspection tender by Kebs 11 years ago.

The ruling came after the Supreme Court rejected a request to review a judgment it passed in December last year that found Kebs liable for breach of the contract awarded to Geo-Chem Middle East in 2009.

Kebs contracted the company in June 2009 to inspect the quality of imported petroleum products but suspended the deal in March 2010 after oil marketers raised fuel prices to cover for the inspection fee.

The litigation highlights the sensitive nature of Kebs regulatory role at a time the country has stepped up the war on counterfeits and substandard imports and locally-made goods spearheaded by the standards agency.

Kebs is at the forefront of the war on counterfeits and substandard imports and locally-made goods, alongside other State agencies such as the Anti-Counterfeit Agency and the Kenya Revenue Authority.

The standards agency last month banned 27 maize and porridge flour brands, leading to an outcry from millers’ lobbies.

Through the Cereal Millers Association, millers said Kebs should have instead reached out to affected firms to verify and validate results for each batch before going public  on issue.