Telkom Kenya, Kenya Railways in Sh222m debt dispute over 80s' phone services

Telkom booths

Telkom Kenya’s pay phone booths. Telkom is embroiled in debt fight over voice and data services rendered to Kenya Railways from the 1980s to 2007.

Photo credit: File | Nation Media Group

Telkom Kenya Limited and the Kenya Railways Corporation (KRC) are embroiled in a Sh222 million debt fight over voice and data services rendered to the transport agency from the 1980s to 2007.

Telkom is claiming from KRC Sh217,100,360 awarded by the High Court on February 2, 2018, and the costs of the suit amounting to Sh4,478,173 plus interest.

But Telkom’s bid to obtain a court order compelling the KRC managing director to settle the debt has since flopped after Justice Anthony Ndung’u struck out a request to issue orders compelling the railway operator to make the payments.

The judge, however, said Telkom can apply again by following the right procedure, noting that KRC is well aware of the decretal sum that remains outstanding.

The application was struck out over Telkom’s failure to furnish KRC with a certificate of order against the government as prescribed in Section 21 of the Government Proceedings Act.

Justice Ndung’u said though Telkom applied prematurely, it is at liberty to institute a proper application should it so desire.

“Telkom has omitted a crucial mandatory step in the execution of a decree against the government or a government agency. There is no evidence, and it is admitted as much, that the KRC was served with a certificate of order against the government as prescribed in law. This omission is fatal to this application,” he said.

Telkom contended that despite issuing a letter dated July 31, 2018, to the Kenya Railways Managing Director seeking payment, KRC had yet to settle the decretal sum. The court dispute started in 2016 when Telkom filed a suit seeking to be paid the footing of services allegedly rendered to the KRC.

Telkom claimed that as an operator of landline public switched telephone network (PSTN), it provided voice-oriented and data-oriented telecommunication services to KRC from the late 1980s through 2007.

Telkom stated that the value of the PSTN voice services aggregated more than Sh128,458,420, while data services for the period in question grossed more than Sh88,641,940. For all the services, Telkom billed and invoiced KRC.

At all material times, KRC is stated to have accepted that it was liable for the principal sum claimed but—in breach of its contractual obligations and its acceptance and promise to pay—failed to pay. Telkom insisted that a meeting it held with KRC in 2013 settled the issue of the amount due. Further, it claimed that KRC acknowledged the debt in 2014 and 2015 and made a promise to pay.

Its witness, Evelyn Nyaboke Nyaata, testified that after several months of negotiations and reconciliation of the accounts, KRC acknowledged its indebtedness to the level of Sh217,100,360 in October 2013. Her testimony was that several meetings had been held to amicably agree on the claim. The meetings culminated in one on October 15, 2013, where an agreement was reached.


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