Zakhem International Construction Limited, a Lebanese-owned contractor behind Kenya Pipeline Company’s Mombasa–Nairobi multiproduct pipeline, has petitioned the High Court to liquidate its subcontractor Oilfields Engineering and Supplies Limited.
- •The petition is the latest in a years-long commercial dispute linked to the US$491 million (KSh 63.46 billion) Line 5 pipeline project.
- •Oilfields, a local engineering firm, previously secured a 2021 arbitral award over subcontract works and has since sought to block Kenya Pipeline Company from releasing about US$31 million (KSh 4.01 billion) owed to Zakhem pending court proceedings.
- •The liquidation filing now shifts the standoff into insolvency territory, potentially exposing Oilfields to winding-up if the court finds a valid creditor claim.
The dispute originates from a subcontract signed on November 17, 2015, for works on KPC’s flagship Line 5 replacement. Following delays and cost claims, Oilfields obtained the 2021 arbitral award.
Multiple court applications followed, including efforts to preserve payments and appeals challenging enforcement. In February 2025, the Court of Appeal stayed portions of High Court orders, leaving the award unresolved.
Under the Insolvency Act, 2015, a creditor may seek a company’s liquidation if it fails to meet a statutory demand or cannot pay its debts. The court will first confirm the debt basis before deciding whether Oilfields is insolvent.
