- A Spanish company filed a liquidation petition against Kenya Electricity Transmission Company over an unpaid KSh 10 billion arbitral award
- Ketraco argued that its government-owned status shielded it from insolvency proceedings, but the High Court rejected that objection
- The debt traces back to a 2013 construction contract for a 400-kilovolt transmission line that Ketraco terminated three years later
TUKO.co.ke journalist Japhet Ruto has over eight years of experience in financial, business, and technology reporting, offering insights into Kenyan and global economic trends.
The High Court has dismissed a bid by Kenya Electricity Transmission Company (KETRACO) to block insolvency proceedings brought against it by Spanish firm C.A. Infraestructuras T&I SLU over a KSh 10 billion (€62.67 million) unpaid arbitral award.
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KETRACO had raised a preliminary objection, arguing that its status as a state agency entitled it to special protections and that Cabinet approval was required before any creditor could initiate liquidation proceedings.
According to COFEK, the court rejected both arguments, finding that government ownership does not automatically insulate a parastatal from insolvency law.
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What was the origin of KETRACO's debt?
The dispute has its roots in two contracts signed in April 2013, under which Spanish contractor Instalaciones Inabensa SA was engaged to construct the 400-kilovolt Lessos–Tororo transmission line and to carry out extension works at the Lessos substation.
The infrastructure was meant to facilitate cross-border electricity trade between Kenya and its neighbours.
Relations between the parties broke down, and KETRACO terminated both contracts on April 25, 2016, citing disagreements over payments and performance. Inabensa challenged the termination through arbitration, and the tribunal sided with the contractor in 2019, finding KETRACO in breach.
The award covered €37.37 million (KSh 5.4 billion) in principal, plus interest, as well as KSh 102 million in legal costs, KSh 83.5 million in arbitral costs, and KSh 2 million in administrative expenses.
Why KETRACO's legal challenges failed
The High Court formally recognised and enforced the arbitral award in February 2021.
KETRACO then appealed through the Court of Appeal and the Supreme Court, but neither court overturned the decision.
By February 2024, accumulated interest had pushed the total claim to €62.67 million (KSh 10 billion) and KSh 195.31 million, excluding further interest accruing thereafter, according to a November 2025 High Court ruling.
C.A. Infraestructuras T&I SLU filed the liquidation petition on May 8, 2024, asserting that it acquired the rights to the arbitral award from Inabensa through a deed of subrogation executed on July 28, 2023. The company maintains that KETRACO's continued failure to settle the debt justifies winding-up proceedings.
With the preliminary objection now dismissed, the liquidation petition against the State electricity transmission agency is set to proceed before the High Court.
Which companies won state tenders?
In other news, we also highlighted facts about the ten companies awarded more than 60% of Kenya’s reported government tenders in the financial year ended June 2025, including the firms’ contract values and owners.
One company secured a KSh 42.52 billion contract for the Talanta Sports City project, while three Chinese state contractors also ranked among the biggest winners.
The top ten’s share of reported tenders more than doubled from the previous financial year.
Source: TUKO.co.ke