Kenya: KQ Told to Hand Back Equipment Over Sh102m Debt

National carrier Kenya Airways has been ordered to surrender a batch of ICT equipment it leased from a firm co-owned by South African President Cyril Ramaphosa over a Sh102 million debt, a move that could hamper the airline’s plans to resume local operations this month.

High Court Judge Wilfrida Okwany allowed Rentworks East Africa Limited to enforce an arbitration decision, which ordered Kenya Airways to surrender the equipment and settle the $966,821 (Sh102 million) debt.

The national carrier argued that arbiter Kariuki Muigai had rewritten the contract in ordering it to pay Sh102 million with 10 per cent interest from the date of filing the claim until full payment.


But Justice Okwany held that the arbitration agreement between Kenya Airways and Rentworks covered any dispute that might arise between them, so Dr Muigai did not go beyond his authority in determining the dispute.

The national carrier is aggrieved that Dr Muigai’s ruling partly drew from sale and cession agreements between KQ and Rentworks.

"I have perused the final award and the documents filed by the parties before the arbitrator. I note that the sale and cession agreement forms part of the bundle of documents that Rentworks East Africa presented before the arbitrator."

"I also note that Kenya Airways did not object to the said documents and that they, therefore, formed part of the evidence that the arbitrator needed to consider in determining the dispute between the parties," Justice Okwany said.

Kenya Airways has since 2007 entered into 18 separate lease contracts for ICT equipment with Rentworks East Africa but defaulted on payments along the way, forcing Rentworks to call off the deal worth millions of shillings.

The leasing firm is a joint venture between Australia’s Rentworks Group and South Africa’s Shanduka Group. The two businesses partnered in 2003 to form Rentworks East Africa, and bagged their first contract with KQ four years later.

PEACE TALKSPresident Ramaphosa is Shanduka’s founder.Rentworks’ dealings with KQ was one of the reasons the Party of National Unity (PNU) cited in their successful protest against the inclusion of President Ramaphosa in the peace talks with the Orange Democratic Movement (ODM) following the 2007/2008 post-election violence.President Ramaphosa was already arrived in Kenya when PNU protested his involvement. The mediators, led by former United Nations Secretary-General Kofi Annan and then Tanzania President Jakaya Kikwete acceded to PNU’s protests.Rentworks initially sued Kenya Airways in 2018, but they reached an out-of-court deal to have the dispute resolved through […]

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