Overview:
According to an application filed on December 28, 2023, Uganda through the Attorney General accuses the Kenyan government of placing unrealistic restrictions to access Kenya's pipeline system to transport its petroleum products from the Port of Mombasa.
The government of Uganda has dragged Kenya to the East African Court of Justice, accusing the latter of frustrating its importation of petroleum products from Mombasa port.
According to an application filed on December 28, 2023, Uganda through the Attorney General accuses the Kenyan government of placing unrealistic restrictions to access Kenya’s pipeline system to transport its petroleum products from the Port of Mombasa.
“We import approximately 90 percent of our refined Petroleum products through the Port of Mombasa in Kenya and the products are transported to Uganda using the pipeline owned and operated by the Kenyan Pipeline Company Limited (KPC),” Uganda’s lawsuit reads in part.
Kenya turned down Uganda’s request to have Uganda National Oil Company (UNOC) register as an oil marketing company locally to use Kenya Pipeline Company (KPC)’s network for handling and transporting fuel headed to Uganda.
“Upon engagements with the relevant authorities in Kenya, UNOC sought to enter into a Storage and Transportation Agreement with KPC. Consequently, UNOC was required by the Respondent to meet certain regulatory requirements including obtaining an Import, Export and Wholesale of Petroleum Products (except LPG) Licence (hereinafter referred to as “the Licence”) from EPRA to utilize the petroleum transit infrastructure in Kenya, especially the Kenya Pipeline systems in furtherance of the new Ugandan policy,” the AG states.
Upon registration, EPRA further required UNOC to provide several documents and meet a raft of requirements for EPRA to process and issue it with the Licence.
These requirements included among others a certificate of incorporation, CR12 from the Registrar of Companies, copies of identity cards or passports for all directors, valid work permits for all foreign directors working in Kenya and a valid tax compliance certificate from the Kenya Revenue Authority (KRA).
Others were proof of financial capability by either providing proof of operations in Kenya as a wholesaler with an annual sales volume of 6,600 cubic meters of either o a combination of premium motor spirit, automotive gasoil, Jet A1, or illuminating kerosene or certified audited accounts for the last three years indicating an annual turnover of $10 million.
On September 30 last year, EPRA rejected the application for a licence by UNOC over alleged failure to prove the annual sale of 6.6 million litres of fuel and ownership of five licensed retail petrol stations and ownership of a licensed petroleum depot.
Uganda says it found the requirements an unnecessary hindrance to the implementation of its petroleum policy as the petroleum products in issue were wholly transit goods not destined for Kenya.
Uganda’s Minister of Energy and Mineral Development wrote to her Kenya counterpart, requesting for a waiver of certain requirements for the Licence as the same were not applicable, practical or rational.
The Cabinet Secretary, Ministry of Energy and Petroleum, Kenya promised to present to the Kenyan Cabinet the Applicant’s request for a waiver of the specific requirements for consideration.
Following the Cabinet’s decision, the Cabinet Secretary Ministry of Energy and Petroleum, Kenya requested EPRA to urgently review and align the petroleum import logistic arrangement in light of the policy shift in Uganda.
On November 7, 2023, a Petition was filed in the High Court of Kenya at Machakos while UNOC’s reapplication remained undetermined by EPRA for over two weeks after resubmission.
“The High Court of Kenya at Machakos on 7 November 2023 without according the Applicant and/or UNOC a hearing, inter alia, issued conservatory orders restraining EPRA from granting an Import, Export and Wholesale of Petroleum Products (Except LPG) licence to UNOC”, the court documents read
Further, the conservatory orders issued on November 7, 2023, inter- alia restraining EPRA from granting the Licence to UNOC were extended from December 6, 2023, to December 19, 2023, and on December 19, 2023, they were further extended to January 22, 2024. [Attached hereto is a true copy of the Ruling marked as “RMO-S”
Uganda, at all material times, sought the intervention of the Republic of Kenya to restrain its organs of State from infringing the Principles and provisions of the Treaty and Protocols, it adds.
Uganda also accuses Kenya of breaching various articles establishing the EAC Treaty and the Protocol for the Establishment of the East African Community Common Market.
The landlocked country says in reference to the EAC that it does not require a license from Kenya’s Energy and Petroleum Regulatory Authority (EPRA) to access the KPC system to transport petroleum products.
The neighbouring country further accused the Kenyan Attorney General of restraining the Energy and Petroleum Regulatory Authority (EPRA) from issuing Uganda National Oil Company (UNOC) with a licence for the importation of oil from Mombasa to Uganda.