Kebs pushes Kwale Sugar to deposit Sh135m in Sh4.7bn case
Kebs argues that Kiscol’s financial position raises doubts about its ability to meet potential costs should its suit be dismissed.
The Kenya Bureau of Standards (Kebs) has moved to court seeking to compel Kwale Sugar International Company (Kiscol) to deposit Sh135 million as security for costs in a protracted Sh4.7 billion legal battle.
Kebs argues that Kiscol’s financial position raises doubts about its ability to meet potential costs should its suit be dismissed.
The sugar company filed the case in 2018 after a multi-agency team led by Kebs destroyed a consignment of its sugar, and in June 2024 amended its claim to demand $36.4 million (Sh4.7 billion) in special damages from the government.
Kiscol is also seeking general damages and interest at 14 percent per year from the date of filing until full payment.
The case names several government agencies as defendants, including the Kenya Revenue Authority, the Attorney-General, the Ministry of Trade, the Directorate of Criminal Investigations, and the Inspector-General.
According to court filings, Kebs based its request for the Sh135 million deposit on claims that Kiscol has a history of unpaid obligations. The regulator pointed out that the firm has not settled a Sh663,810 fee awarded by the Court of Appeal in 2022 in a separate constitutional petition.
Kebs further told the court that Kiscol is facing an ongoing insolvency petition at the High Court in Milimani, Nairobi, and is “substantially foreign owned and controlled by legal persons in Mauritius”.
“The first defendant/applicant (Kebs) is verily apprehensive that the plaintiff/respondent (Kwale Sugar) will not be able to pay the colossal costs consequential upon its claims in this case being dismissed,” Kebs managing director Esther Ngari stated in the court papers. She added that the company’s audited financial statements from 2016 to 2021 show financial instability, which, coupled with the insolvency petition, heightens Kebs’ fears.
The insolvency petition stems from a claim relating to 8,995 bags of sugar destroyed by the government. Kebs was among the agencies that sealed off Kiscol’s factory, warehouses, stores, and lorries containing sugar classified as non-compliant.
The matter is still before the court, with the hearing scheduled to continue on October 22, 2025.
