Nairobi — Threats of retaliation by Kenya forced the United Kingdom to have court orders freezing the accounts of the high commission in London over a Sh800 million debt lifted.

Correspondence seen by the Nation reveals how the Foreign Affairs ministry swung into action last month, writing to the British government with threats to hit back if the orders freezing the accounts were not lifted immediately.

The ministry also summoned the British High Commissioner in Nairobi, Mr Rob Macaire last December to protest at the action taken by the British courts and demanded that a move be made to preserve the immunity of assets belonging to the Kenyan mission in London.

The debt in question relates to a contract signed by Treasury in the nineties with a firm linked to two former associates of retired president Daniel Moi, and which saw the government hauled to a London court late last year for failing to pay up.

When the UK court ordered the freezing of the accounts, the Foreign Affairs ministry invoked the doctrine of immunity, which obligates a host country to protect and preserve the immunity enjoyed by foreign missions based in that country, including its property and assets.

"The ministry further rejected the argument advanced by the Foreign and Commonwealth office that the Kenya High Commission in London should make representations to the relevant UK Court on the ground that issues of immunity are ultimately decided by the UK Courts, not the executive," reads a letter from Foreign Affairs Permanent Secretary, Thuita Mwangi, appraising Civil Service head Francis Muthaura of the British court's decision to freeze the accounts.

"This is a grave matter that has exposed the Government of Kenya as ineffective and has a bearing on our prestige and international integrity. The Ministry therefore strongly feels that retaliatory action should be taken due to the illegal order made by the British courts," reads the letter, dated December 23, last year.

Concerned by the threats from Nairobi, UK's Foreign and Commonwealth Office immediately wrote to the Royal Court of Justice directing that the orders be lifted. A letter signed by Mr Richard Cox, the deputy head of the Protocol Directorate at the UK Foreign and Commonwealth Office dated December 22, last year while directing that the freezing orders be lifted, reminds the Royal Court of the doctrine of immunity.

"The High Commission of the Republic of Kenya has brought to our attention the freezing injunction made by the Honourable Mr Justice Clarke on 1 December 2009 against the accounts of the High Commission of Kenya held at HSBC Bank," reads the letter seen by Nation.

"In this connection, the Foreign and Commonwealth Office wishes to draw the attention of the Court to Sections 1 (2) and 13 of the State Immunity Act 1978. The Court may also wish to be aware that in the 1984 case of Alcom v Republic of Columbia, the House of Lords considered in detail the immunities enjoyed by state bank accounts," Mr Cox goes on.

The debt in question relates to a contract the Ministry of Finance entered into with the Inspection and Control Service (ICS) Ltd, a Swiss firm believed to be linked to two close associates of retired president Daniel Moi in April 1998. Under the terms of the contract, the company was to provide pre-shipment inspection services to the government --services which officials at the Foreign Affairs ministry insist were never rendered.

According to Mr Mwangi, "the Ministry of Finance defaulted on its obligations", prompting ICS to file arbitration proceedings which resulted in an award being entered against Treasury. Attorney-General Amos Wako represented the government during the arbitration, while Nairobi lawyer Fred Ojiambo was the expert witness for the Swiss firm. Prof Githu Muigai appeared for the Treasury.

Speaking to the Nation last year, Finance secretary at Treasury Mutua Kilaka confirmed that the tribunal had ruled in favour of ICS on September 4, 2008. The AG advised the government to pay. "The ruling also came in the middle of our budget, and we promised to put it in our next budget," said Mr Kilaka. But he said on October 23, 2009, ICS obtained orders freezing one account at the Crown Agents Bank in London.

"The Ministry of Finance has instructed the AG to seek indulgence of the claimants with a view to resolving the matter within the current budgetary constraints," said Mr Kilaka then. He added that the account that had been frozen was used by the Kenya Government to pay its pensioners in Britain.

But in his letter to Mr Muthaura, the Foreign Affairs PS blames the AG and Treasury for the mess, insisting that his ministry has nothing to do with the matter. "Due to the continued failure of the Ministry of Finance to satisfy the award and pay the sums due,... an ex-parte freezing injunction was made against the Ministry of Finance," he writes.

"Despite notice of the above two hearings being given to the Ministry of Finance and the Attorney General, no appearance was entered for the Government of Kenya to contest the freezing order," Mr Thuita further protests. "As a consequence of the freezing order the accounts of the High Commission of Kenya in London have been frozen rendering the mission incapacitated and technically shut down," he states.

"This is a matter so serious and of grave concern for the Ministry of Foreign Affairs which was never a party to the contract and/or to the proceedings ensuing from the contract," laments the PS.