A Kenyan firm has filed insolvency proceedings against Lebanese firm Zakhem International Construction Ltd over a debt of about Sh460 million.
Azicon Kenya Ltd filed the petition before the High Court in Nairobi seeking to liquidate Zakhem International, over a debt of $3,560,857, which has been pending since 2020.
The Kenyan firm was among companies subcontracted by Zakhem International Construction for the replacement of the 450-kilometre Nairobi-Mombasa pipeline in 2018 for Sh48 billion.
“The creditor/respondent (Azicon Kenya) herein is apprehensive that the debtor/applicant (Zakhem International) is busy scheming and deliberately avoiding to pay by incorporating new companies to hide therein all the monies and assets belonging to Zakhem International Construction Limited in order to defeat justice,” the firm said in the application.
Azicon Kenya Ltd said it was subcontracted by Zakhem International for electrical, instrumentation and telecoms installation works.
Zakhem International had been contracted by the Kenya Pipeline Company to replace the ageing pipeline.
The firm completed the job in March 2019.
Zakhem International Managing Director David Kibet Tonui said the subcontract was worth $10,137,424, inclusive of value-added tax. Mr Kibet said Zakhem International only paid $6,509,502 but allegedly refused to settle the balance.
“The debtor/applicant (Zakhem) herein has, up to this point, never disputed the excellent work done by the creditor/respondent herein but failed to meet its part of the subcontract by failing to pay the creditor/respondent the then outstanding amount,” said Mr Kibet.
He said Azicon Kenya moved to court and obtained a court order on September 23, 2020, compelling Zakhem International to pay the money.
He said his firm has evidence that Zakhem International received the full payment from KPC.
Mr Kibet added that the court order stated that his firm was free to enforce the order in any way recognised by the law, including insolvency proceedings.
He revealed that the firm served Zakhem International with insolvency statutory demand on January 14, 2025.
“Twenty-one days lapsed since the demand was made but the Debtor/ Applicant failed, declined and/or neglected to pay the debt or any part of the debt or comply with the statutory demand,” he said.
In reply, Zakhem international claimed that it was still waiting to be paid by KPC, claims disputed by Azicon Kenya Ltd.
“The debtor is deliberately and blatantly telling lies as there are two Affidavits proving that Kenya Pipeline Company Limited has paid the Debtor/ Applicant herein all amounts in HCCCE322 of 2019,” Mr Collins Taliti for Azicon Kenya said.
Mr Taliti pointed out that there is an affidavit dated November 8, 2024, by Ibrahim Zakhem stating that KPC was not holding any funds on its behalf.
“That it is therefore the Creditor/ Respondent’s reasonable conclusion that, by failing to comply with the subject served statutory demand herein, the Debtor/ Applicant is unable to pay its debt and is therefore consequently liable to be liquidated,” Mr Taliti said.
Another firm sub-contracted by Zakhem International to execute the contract was also pursuing a debt of Sh670 million last year.
Multiple ICD (Kenya) ltd had even obtained a court order freezing KPC’s bank accounts, but the freeze was lifted after it emerged that the oil company was not holding any money on behalf of Zakhem International.
