- A supermarket has moved to court over a dispute with the dairy processor.
- Planned restructuring at the state-owned firm has raised concerns over the recovery of disputed funds.
- The legal battle stems from a distribution agreement that provides for arbitration.
Naipa Supermarkets Limited has moved to the High Court in Lodwar seeking orders to freeze the assets and bank accounts of New Kenya Co-operative Creameries Limited (KCC) over a Ksh420 million claim pending arbitration.
The supermarket wants the court to restrain KCC from selling, transferring, leasing, charging or otherwise disposing of its properties, including milk processing factories, machinery, vehicles and other equipment, until the dispute is resolved.
In an application filed in Civil Suit No. E006 of 2025 through lawyer Philip Nyachoti, Naipa argues that KCC’s planned financial restructuring and modernisation could expose its assets to the risk of disposal, potentially making it difficult to recover the money if the arbitration award goes in its favour.
The company is also seeking orders restraining KCC and financial institutions holding its funds from withdrawing, transferring or concealing money in its bank accounts.
Naipa further wants the court to direct KCC to provide security for the Ksh420 million claim within 14 days, either through an irrevocable bank guarantee issued by a reputable commercial bank or a cash deposit into an interest-earning joint escrow account.
Should KCC fail to comply, the supermarket wants its processing factories, real estate and other fixed assets attached before judgment to secure the disputed amount.
In a supporting affidavit, Naipa Managing Director Anthony Munene Kibetu said the application was prompted by recent government directives concerning the financial restructuring, modernisation and reorganisation of KCC.
Kibetu stated that President William Ruto issued the directives during the Agriculture and Food Systems Transformation Summit held at the Jamhuri Park ASK Showground in Nairobi between October 7 and 9, 2026.
READ ALSO:
According to the affidavit, the proposed measures include settling approximately Ksh8 billion in outstanding KCC debts through the forthcoming Supplementary Budget, overhauling processing plants and machinery, and introducing biweekly payments to dairy farmers.
Naipa argues that the proposed changes raise concerns about the potential transfer, disposal or dissipation of KCC assets before the arbitration proceedings are concluded.
“Unless this Honourable Court intervenes urgently and grants the preservatory and protective orders sought herein, there exists a real and substantial risk,” Kibetu stated in the affidavit, warning that the restructuring could undermine the supermarket’s ability to recover any amount awarded to it.
He further contends that the disposal of KCC assets could render a future arbitral award ineffective and expose the supermarket to substantial financial losses.
The dispute stems from a distribution agreement dated January 1, 2022, which provides for arbitration in the event of a disagreement between the parties.
According to Naipa’s application, arbitration proceedings were instituted following directions issued by the High Court on December 1, 2025.
The arbitration is scheduled for hearing on November 5 and 18, 2026.
Naipa maintains that it moved to court promptly after the recent government announcements and argues that granting the requested orders would not unfairly prejudice KCC.
The supermarket is asking the court to preserve KCC’s assets and funds until the arbitration is concluded and any resulting award is fully satisfied.
By Obegi Malack
Get more stories from our website: Sacco Review.
For comments and clarifications, write to: Saccoreview@
Kindly follow us via our social media pages on Facebook: Sacco Review Newspaper for timely updates
Stay ahead of the pack! Grab the latest Sacco Review newspaper!
