The High Court has allowed negotiations between an oil marketer and a Mombasa-based company it accuses of failing to pay for fuel worth Sh46.9 million.
Vivo Energy Ltd has sued Weslyn Logistics Ltd for allegedly defaulting in payment for a consignment of oil supplied.
Justice Florence Wangari said she encourages parties to reach an out-of-court settlement and directed that Vivo Energy Ltd and Weslyn Logistics Ltd report any settlement within 21 days.
Through its lawyer, Vivo Energy Ltd had told the court that Weslyn Logistics Ltd had not tabled any offer, but the judge said she would give directions during the mention of the case.
Weslyn Logistics Ltd, through its lawyer, had told the court that it feels it can reach an agreement with Vivo Energy Ltd and record a settlement.
“I am optimistic we can record a settlement in 45 or 60 days,” Weslyn Logistics Ltd’s lawyer told the court during the mention of the case on Wednesday.
An attendant attends to a motorist at a petrol station .
In the meantime, Vivo Energy Ltd, in its application, wants the court to enter judgment summarily against the defendant in its (Vivo Energy Ltd) favour.
It argues that the defendant has not at the time of filing the application filed a defence and that in any event has no defence capable of resisting its (plaintiffs) claim.
However, Weslyn Logistics Ltd director Ben Mungai in his affidavit filed in court says that a summary judgment can only be allowed in clear cases where no arguments are required.
He says that there is a need to verify Local Purchase Orders it issued against the Tax Invoices issued by Vivo Energy Limited.
“The power to order summary judgement is discretionary so that a defendant is not denied a chance to defend the suit brought against them,” states Mr Mungai adding that he has a good defence against the case.
Mr Mungai says he believes that the case is one that can be settled amicably out of court and all that is required is verification of the documents.
In its case, Vivo Energy Ltd says that on September 1, 2020, it entered into an agreement with Weslyn Logistics Ltd for the supply of petroleum products.
According to Vivo Energy Ltd, the agreement was for a term of five years after which it would be subject to renewal for a period and on terms to be agreed upon by both parties.
Vivo Energy Ltd claims that the agreement was subject to the right of either party to terminate it for breach in terms of the provisions therein.
Credit terms
The oil marketer says that on diverse dates between April and June last year, at the instance of Weslyn Logistics Ltd supplied it with petroleum products valued at Sh48 million on credit terms, particulars of which are within its (Weslyn Logistics Ltd) knowledge.
“It was agreed between the parties that the money was payable within 30 days from the month of supply,” part of the suit documents state.
Vivo Energy says that in blatant breach of its contractual obligations, Weslyn Logistics Ltd failed, refused and neglected to pay the money within the stipulated timelines for petroleum products supplied to it.
“By a debt settlement agreement dated September 11 2024, the defendant expressly admitted to owing the plaintiff the sum of Sh48 million and the parties agreed that it was to be repaid in seven monthly instalments from September 2024 to March 2025,” Vivo Energy claims.
The oil marketer further says that it was also agreed between the parties that in addition to the monthly instalments, there would be reviews on debt settlement in three interval periods.
“Additionally, it was agreed that the debt settlement agreement, when executed would constitute binding obligations of each party in accordance with their respective terms,” part of the case documents state.
An LPG gas refilling area at Vivo Energy Kenya depot in Nanyuki Town on August 12, 2020. The depot has a capacity of 11.5 million litres of petroleum storage terminals and serves the region and the northern part of the country.
Vivo Energy says that on November 12 last year, the defendant remitted to it Sh1.1 million thereby reducing the amount to Sh46.9 million.
It further says that in breach of its obligations under the debt settlement agreement, the defendant failed, neglected and refused to remit any of the instalments as and when they fell due thereby necessitating the filing of the case.
“Demand has been made and the notice of intention to sue given but the defendant has failed, refused and neglected to pay the said amount or any part thereof,” part of the suit documents state.
The plaintiff wants judgement entered against the defendant for Sh46.9 million together with interest at commercial rates from November last year until payment in full.
The case has been fixed for mention on May 25.
