@vvs, read the article, i think its becoming more political, muuite is just politics

True. but if muite is to be believed, then KK lawyers prefer the political route, why?, what then?

I ain't a lawyer and i won't claim to give an opinion but i 'think' that at some point KK will have to choose whether to do business of oil marketing or court battles. There options are thinning by the day and fatigue is setting in if MUITE is to be beleived. For those of you WHO STILL THINK THEY WILL STRIKE IT RICH when KK attaches KPC i advice you keep dreaming. The huge award of Ksh 4.6bn by arbiter Ahmednasir Abdullahi is being appealed following the judgement delivered by Lady Justice Hannah Okwengu. The application by KK to have the application (appeal by KPC against arbitration) dismissed was found incompetent. It was accordingly dismissed with costs,” Lady Justice Hannah Okwengu, said about KenolKobil’s
application in her 19-page ruling on April 20 this year.

++++brief history of the dispute+++

On December 10, 2009, arbitrator Ahmednasir Abdullahi, ordered KPC to pay KenolKobil Sh4.6bn for contravening a transportation and storage agreement. Mr Abdullahi explained that the award was damages for loss of consumer goodwill, cost of public relations, marketing campaign and loss of financial goodwill. KenoKobil had factored the award in its 2010 revenues, which it hoped would boost its balance sheet if awarded in its favour. Mr Abdullahi, a former Law Society of Kenya (LSK) chairman, ruled that the State corporation breached the transportation and storage agreement by allowing the collapsed Triton Petroleum to use its facility, Kipevu, in Mombasa, as a warehouse.

++++ While the engagement between KPC & Triton was wrong, Arbiters may make decisions which may be polarized++++ I also wonder why all these disputes arise from KK decision to pay others +++ How is it like to work for KK?

1) KK did the right thing to try to have the application of the appeal dismissed. Makes sense for KK. Maybe it had a small chance to succeed but he who does not try does not win!

2) The appeal is in court. Until the appeal is heard is determined against KK, the current ruling stays in force. I hope the appeal is heard asap.

3) KPC may be required to come up with a deposit or bond or guarantee of KES 4.6bn + interest for the appeal to be heard. Only GoK (or a huge bank like KCB or BBK or Equity) can help them a this point!

4) If KPC loses the appeal & do not pay KK, then KK can apply to the Court to attach assets! Yes, I am drooling!

OOOH MR VITU VINGI SANA...i post substance not rhetoric or hot air.... you do not need to eat humble pie. I will buy you lunch Lunch at the Serena (remember Anyan'g Nyong'o) after reading this statement dated...till the end. Mind you it is from a journalist but from Segman himself. Make no mistake, the appeal came to soon though his intentions are very clear and especially from the last sentence. Allons-y

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27 Jan 2010

Notice to Shareholders: 2nd Half 2009 Earnings Update and Final KPC Arbitration Ruling

We publish our financial results twice in every Financial year. For the 2009 Financial year, in August 27th 2009, we published our half year results which showed that we had not achieved our targets as at that time and cautioned that if the trend continued the company was headed for a substantial reduction in its profits. Accordingly, we issued a profit warning as required by regulation.

However, we also added that Management was more bullish on 2nd half of the year and that management was strongly optimistic about the future of the Group’s profitability.

We are pleased to inform the Shareholders that out optimism has been proved right. We expect the underlying financial results for the year 2009 to be strong and surpass our earlier expectations due to a number of reasons, among them, a very strong 2nd half performance across the Group particularly in Kenya operation, strong performance of subsidiaries outside Kenya throughout the year, considerable improvement in cost of Financing of the Group trading activities, improvement and recovery in most of the business segments particularly in 3rd and 4th quarter 2009, gain from disposal of non-performing and non-core assets, reduction in provision for bad debts of commercial customer and in distribution costs.

Furthermore, management wishes to confirm that on 10th of December 2009 a Final Award in the matter between Kenya Pipeline Company Limited and KenolKobil Limited (formerly Kenya Oil Company / Kobil Petroleum Limited) was made.

In previous financial statements, management has on several occasions reported to the shareholders that the inefficient management of the pipeline has been a major constraint to the company’s performance. Following the award in Arbitral proceedings between the company and KPC, management is optimistic that in compliance with the Award, there will be an improvement in the services offered by KPC and this should be a major boost in improved performance and earnings of the company. There is also a financial aspect to this Award which is being challenged. If the Award is upheld, it will contribute significantly to the future earnings of the company.

Yours sincerely

Jacob I. Segman

Acting Chairman and Group Managing Director
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