Nation Media Group (NMG) has been ordered to pay oil marketer Gulf Energy Ksh12 million.
In a ruling by a three-judge bench, the media house was accused of publishing a defamatory article against the company.
According to the judges Hannah Magondi Okwengu, Milton Stephen Asike-Makhandia, and Jamila Mohammed, Ksh10 million is for general damages while Ksh2 million is for aggravated damages.
According to the court documents, the article published in the Daily Nation newspaper and the website in October 2012 damaged the image of the company.
"It was pleaded that the appellants’ (NMG) falsely and maliciously printed, published and distributed or caused to be printed, published and distributed the said article well knowing that the allegations of and concerning the respondent were untrue," read part of the documents.
The oil company argued that before the malicious article was published, it was respected by the community and had different business partners.
Following the publishing and distribution of the article, the oil company complained that it suffered a monumental loss of business.
The article in question highlighted how the oil company was allegedly involved in a flawed tender that affected the fuel prices.
Reportedly the oil company was awarded the tender to supply fuel at USD1.475 per barrel. The deal however led to increased fuel prices.
In their defense, the media house management explained that the article was not published with malice but to provide Kenyans with the right information.
"The appellants (media house) had a public duty to inform the public on matters that were of public interest namely the prevailing circumstances in the energy sector that were affecting prices of fuel in the country," read part of the court documents.
Initially, the oil company sought Ksh23 million but the Court of Appeal judges reduced the compensation to Ksh12 million.