Court Sanctions Negotiation Between Vivo Energy and Weslyn Logistics in Sh47 Million Dispute

MOMBASA — The High Court has granted permission for Vivo Energy Ltd and Mombasa-based Weslyn Logistics Ltd to pursue settlement negotiations in an ongoing Sh46.9 million debt dispute.

Justice Florence Wangari endorsed an out-of-court settlement between the petroleum supplier and the logistics company, directing both parties to report any agreement reached within 21 days.

“We are optimistic we can record a settlement in 45 or 60 days,” Weslyn Logistics’ legal representative told the court during Wednesday’s proceedings.

The dispute stems from a five-year supply agreement signed in September 2020, under which Vivo Energy provided petroleum products to Weslyn Logistics. According to court documents, Weslyn accumulated a debt of Sh48 million between April and June last year for fuel supplied on 30-day credit terms.

Following the mounting debt, both companies entered a debt settlement agreement on September 11, 2024, with Weslyn Logistics acknowledging the amount owed. The agreement stipulated repayment through seven monthly installments from September 2024 to March 2025, with periodic reviews.

However, after making a single payment of Sh1.1 million in November, reducing the debt to Sh46.9 million, Weslyn Logistics allegedly failed to make further payments as scheduled.

Vivo Energy subsequently filed a lawsuit seeking summary judgment against Weslyn Logistics for the outstanding amount plus interest at commercial rates.

Weslyn’s director, Ben Mungai, has contested the summary judgment application, arguing in an affidavit that “there is a need to verify Local Purchase Orders issued against the Tax Invoices issued by Vivo Energy Limited.” Mungai maintained that document verification is all that’s required to settle the matter amicably.

While Vivo Energy’s counsel initially expressed concern that Weslyn had not presented any formal settlement offer, Justice Wangari remained committed to facilitating negotiations, stating she would provide further directions at the next hearing.

The case has been scheduled for mention on May 25, by which time the parties are expected to report on their settlement progress.

The petroleum sector in Kenya has faced several challenges in recent years, including supply chain disruptions and disputes between suppliers and distributors, highlighting the complex relationships within the country’s energy supply network.