Court clears Sh10bn Kenya award to non-existent firm

The firms include a bankrupt and dissolved company, Instalaciones Inabensa, which the Court of Appeal has given the right to recover more than €62.6 million (Sh10 billion) from Ketraco’s accounts.

The appellate court declined to halt execution of the High Court’s December 11, 2025 garnishee orders granted to the dissolved company, reopening the path for it to pursue and retrieve funds in Ketraco’s accounts.

“The applicant (Ketraco) has not satisfied us that it has an arguable appeal. In the premises, we do not need to consider whether or not the intended appeal will be rendered nugatory. Consequently, this application fails and is dismissed,” said the three-judge bench.

The apex court in October 2022 ordered the Kenya Electricity Transmission Company to pay Spanish firm, Instalaciones Inabensa, €37.6 million for breach of contract after cancelling a contract for building a high-voltage transmission line and substations.

However, unknown to the Kenyan lawyers and judges, Inabesa was fighting for its life in the Spanish capital in a struggle that saw it declared bankrupt a month after the Supreme Court verdict.

In the end, Inabensa was reported dissolved, and some of its assets were tipped for sale to a firm called Cox Energy, with Ernst and Young tapped as the insolvency administrator, said a confidential brief from the Attorney General’s office.

Court documents reveal that on July 28, 2023, Inabensa transferred its rights to another Spanish firm, C.A. Infraestructuras T & I SLU, which is also pursuing payment in the decade-long dispute.

Now, the Attorney General reckons that Ketraco is at a loss on whom to pay the Sh10 billion, with the State law office warning that Kenya could end up paying Sh30 billion to three firms.

In Kenya, Inabensa, which the Attorney General reckons was dissolved, has frozen part of Ketraco’s billions of shillings in 17 bank accounts in NCBA, Standard Chartered Kenya, Co-operative Bank of Kenya, Citibank N.A. Kenya, and KCB Bank Kenya.

Separately, Infraestructuras T & I SLU is seeking to wind up Ketraco over non-payment of the Sh10 billion award following the Supreme Court verdict.

The Attorney General has added a fresh twist to the spat after telling the court that the insolvency administrator in Spain, Ernst and Young Abogados, could still assert rights over the money on behalf of creditors.

The origin of the dispute is two engineering, procurement, and construction contracts awarded in April 2013 for the 400kV Lessos–Tororo transmission line and the extension of the Lessos substation.

The projects were valued at over €24.5 million (Sh3.6 billion) and Sh893 million, totaling more than Sh4.5 billion.

The claim for the botched contract has grown to Sh10 billion.

They were meant to facilitate electricity trade between Kenya and neighboring countries, but were terminated in 2016 following a fallout between Ketraco and Inabensa.

Ketraco terminated the contract on April 25, 2016, after it received a notice from the Spanish firm on April 12, 2026, that it was suspending works after the State agency failed to settle several invoices.

At the centre of the ongoing dispute is a 2019 arbitral award in favour of Spanish contractor Instalaciones Inabensa S.A., which was contracted in 2013 to build the Lessos–Tororo transmission line and extend the Lessos substation.

The tribunal found Ketraco breached the contract by failing to pay invoices and unlawfully terminating the agreement, awarding the contractor more than €30.8 million (Sh4.6 billion) plus interest and costs.

That award was adopted as a judgment of the High Court in 2021, making the debt final and enforceable.

But the amount has since ballooned to over €62.6 million (about Sh10 billion), including interest and costs.

Ketraco attempted to overturn the arbitral award through a series of legal challenges in the High Court, the Court of Appeal and later the Supreme Court, but all attempts failed, leaving it exposed to enforcement proceedings.

The dispute has now split into two competing claims.

On one hand is Instalaciones Inabensa, the original contractor seeking to recover the debt through garnishee proceedings.

On the other hand is CA Infraestructuras T&I SLU, which claims to have taken over the rights to the award and is now pursuing liquidation of Ketraco—creating confusion over who the utility should legally pay.

“The magnitude of the award and the accruing interests far outstrips the applicant’s financial capacity and asset base, hence its immediate enforcement will bring the applicant’s activities to an abrupt halt,” Ketraco told the courts.