Uganda Files Lawsuit Against Kenya Over Petroleum Import License

Posted by: Eninu William in Uganda news January 3, 2024

Uganda has taken Kenya to the East African Court of Justice, seeking a declaration that Kenya’s prohibition on the Energy and Petroleum Regulatory Authority (EPRA) from issuing a petroleum import license to Uganda National Oil Company (UNOC) is illegal.

Uganda’s Attorney General, Kiryowa Kiwanuka, argues that relying on Kenyan oil marketing companies for importing and supplying petroleum has exposed Uganda to supply vulnerabilities. This is leading to avoidable increases in fuel pump prices.

Kiwanuka filed a statement of reference against the Kenyan Attorney General on December 28, 2023, at the East African Court of Justice in Arusha, Tanzania.

Arguments in the Lawsuit

Uganda currently imports around 90% of its refined petroleum products through the port of Mombasa in Kenya. Kiwanuka asserts that the importation and supply traditionally involved oil marketing companies.

This is through the Kenya open tender system or government-to-government arrangements between Kenya and foreign governments.

Under a policy shift, Uganda designated UNOC as the sole importer and supplier of all petroleum products. To implement this, Uganda needs to transport petroleum products from Kenya to Uganda using the infrastructure of the Kenyan Pipeline Company (KPC).

Engagement with Kenyan Authorities.

In April 2023, Uganda engaged Kenyan authorities on the new policy. Kiwanuka claims that Kenya assured unwavering support for the policy’s implementation. However, Kenya imposed regulatory requirements, including obtaining an EPRA license, which Uganda found unnecessary for goods in transit.

In protest, UNOC registered a breach of contract in Kenya and applied for the license. However, EPRA rejected it, demanding proof of annual sales, ownership of petrol stations, and a petroleum depot.

Petition and Legal Proceedings.

Uganda’s energy ministry requested a waiver for certain requirements, leading to the Kenyan cabinet’s consideration.

Despite resubmitting the application, a petition in the High Court of Kenya at Machakos resulted in conservatory orders restraining EPRA from granting the license to UNOC.

Uganda hired legal firms to defend the deal, emphasizing its rights under the East African Community (EAC) treaty. The lawsuit seeks declarations that Kenya’s actions contravene EAC treaty articles. It, therefore, demands Kenya accord UNOC commercial terms for using the Kenyan pipeline system.

Kiwanuka seeks court declarations and orders to rectify the situation. He argues that Kenya’s conditions on sea access violate the EAC treaty. The East African Court of Justice directed Kenya to file a defense within 45 days, or the case will proceed without them.

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