The Court of Appeal has allowed a Spanish company that has reportedly been dissolved to continue pursuing more than Sh10 billion from Kenya Electricity Transmission Company (KETRACO), intensifying a legal dispute that could leave taxpayers exposed to multiple claims over the same debt.
In its ruling, the appellate court declined Ketraco’s request to suspend the enforcement of garnishee orders issued by the High Court in December 2025. The orders permit Instalaciones Inabensa to recover over €62.6 million (approximately Sh10 billion) from funds held in 17 Ketraco bank accounts.
A three-judge bench held that KETRACO had failed to demonstrate that its intended appeal was arguable, leading to the dismissal of its application.
The dispute stems from a Supreme Court decision delivered in October 2022, which awarded Instalaciones Inabensa €37.6 million after finding Ketraco liable for breach of contract following the cancellation of a power transmission project. However, according to information from the Attorney General’s office, the Spanish company was declared bankrupt shortly after the ruling and was later dissolved.
Court records indicate that in July 2023, Inabensa transferred its rights under the award to another Spanish entity, C.A. Infraestructuras T & I SLU, which is also seeking payment from KETRACO. The Attorney General has warned that the existence of multiple claimants could expose Kenya to the risk of paying the same debt more than once, potentially increasing the liability to as much as Sh30 billion.
The uncertainty has been compounded by the possibility that Ernst and Young Abogados, appointed as insolvency administrator during Inabensa’s bankruptcy proceedings, could also assert a claim on behalf of creditors.
Meanwhile, Inabensa has secured court orders freezing portions of Ketraco’s funds held in accounts across several banks, including NCBA, Standard Chartered, Co-operative Bank, Citibank Kenya and KCB. Separately, C.A. Infraestructuras T & I SLU has initiated efforts to wind up Ketraco over the unpaid award.
The dispute traces its origins to contracts awarded in 2013 for the construction of the 400kV Lessos-Tororo transmission line and the expansion of the Lessos substation, projects valued at more than Sh4.5 billion. The contracts were terminated in 2016 after disagreements over unpaid invoices and project execution.
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An arbitral tribunal ruled in 2019 that KETRACO had breached the contracts by failing to honour payment obligations and by unlawfully terminating the agreements. The tribunal awarded the contractor more than €30.8 million, plus interest and costs. The award was subsequently adopted by the High Court in 2021, making it enforceable under Kenyan law.
Accumulated interest and costs have since pushed the amount owed to more than €62.6 million. Ketraco unsuccessfully challenged the award through the High Court, Court of Appeal and Supreme Court, leaving enforcement proceedings as the next phase of the dispute.
KETRACO has argued that immediate enforcement of the award could severely affect its operations, warning that the growing liability far exceeds its financial capacity and asset base.
