Khartoum firm targets South Sudan assets with Nairobi suit

Politics and policy

The Milimani Law Courts in Nairobi where the case has been filed. PHOTO | FILE 

By BRIAN WASUNA, bwasuna@ke.nationmedia.com

In Summary

• Active Partners Group wants Kenyan courts to enforce a Sh3.8 billion claim against the government of South Sudan.
• The firm was awarded the amount by an arbitration panel in January as settlement for a failed mega power project contract with the Juba government.
• Active Partners is targeting South Sudan’s assets in Nairobi after it failed to enforce the arbitration settlement in Juba, whose courts it says are hostile and partisan.

A Khartoum-based multinational company has turned to Kenyan courts for enforcement of a Sh3.8 billion claim against the Government of South Sudan, setting the stage for a possible diplomatic row between Nairobi and Juba.

Active Partners Group was awarded the colossal amount of money by an arbitration panel in January as settlement for a failed mega power project contract with the Juba government.

The company, through its Kenyan subsidiary, had won a tender for the electrification of South Sudan in 2008 but the deal fell through after Africa’s youngest nation was hit by ethnic war and severe drought.

Active Partners is targeting South Sudan’s assets in Nairobi after it failed to enforce the arbitration settlement in Juba, whose courts it says are hostile and partisan.

Arbitrators Philippe Pinsole, Karel Daele and Richard Omwela in January found South Sudan responsible for the failed contract and ordered Juba pay Active Partners $40.9 million (Sh3.8 billion).

South Sudan is yet to respond to the suit filed at Milimani Law Courts but it is feared that enforcement of the claim by a Nairobi court could extend ongoing Juba-Khartoum tensions to Kenya.

“If the situation of the debt is not arrested fast enough there is every likelihood that some of Active Partners’ creditors may file for winding it up, a situation that might bring to naught all the effort, energy and expenses that I have put in pursuing the claim,” says Mohammed Fagir, the firm’s managing director.

A possible casualty of the suit is Kenya’s diplomatic ties not only with South Sudan but also with the Khartoum government. Kenya has maintained cordial diplomatic relations with both nations despite their differences with each other.

South Sudan awarded Active Partners the $197 million (Sh18.7 billion) project from which the contractor says it expected to make a 35 per cent profit or $69.7 million (Sh6.4 billion).

READ: CBK orders banks to freeze assets of Sudanese officials

Active Partners reckons that South Sudan’s failure to provide a bank guarantee is the cause of its frustrations. The firm told arbitrators that South Sudan had sufficient funds to issue a guarantee but opted to use the money for other purposes.

South Sudan had in its defence said its financial fortunes were changed by the 2008 ‘dura saga’ in which it lost $4 billion (Sh378 billion) through irregular contracts with 441 companies contracted to supply relief food.

Dura is the South Sudanese name for sorghum, one of the grains involved in the scandal.

Juba also argued that the ongoing war in key northern and eastern towns like Bentiu and Jongelei forced it to close oil wells in Heglig, a decision that ripped its financial reserves apart.

Active Partners says it spent $12.1 million (Sh1.1 billion) in project survey, design, salaries, air charters and assorted equipment and urgently needs to be paid the money.