The High Court has barred the National Treasury from releasing contract payments to a firm awarded a tender linked to the State-run Integrated Financial Management Information System (Ifmis) over an outstanding debt of Sh212.8 million owed to its business partner.
In enforcing an arbitration-backed decree arising from the technology tender, the court ruled that while government assets cannot be seized, the law allows debts owed by the State to third parties to be attached.
The court directed the Principal Secretary at the National Treasury to comply with an earlier decree issued in favour of Kobby Technologies Limited against the government following a dispute with Kingsway Business Systems Limited during contract implementation. It prohibited the release of any funds to Kingsway until the debt is settled.
The dispute stems from a 2019 government tender for the provision of Ifmis services. The National Treasury had sought on-site support to enhance Ifmis e-Procurement and related financial systems across government and semi-autonomous agencies.
In February 2021, the tender was awarded to a consortium comprising Kingsway Business Systems, Kobby Technologies and Inplenion Eastern Africa for three years, at a cost of Sh647 million. Kobby Technologies’ share amounted to Sh303.9 million in professional fees.
A disagreement later arose between Kingsway and Kobby over a March 2021 subcontract, resulting in arbitration. In October 2022, the arbitrator ruled in Kobby’s favour. The award was adopted as a High Court decree in July 2024, granting Kobby Sh165.8 million plus interest and costs.
After Kingsway failed to pay, Kobby moved to garnish funds owed by the Treasury to Kingsway under the same tender. In February 2025, the court issued a garnishee order against the government for Sh212.8 million.
Despite being served with the certificate of order, payment was not made, prompting Kobby to seek judicial review orders against the Attorney General and the Treasury’s Principal Secretary.
In its ruling on Monday, the court found that Kobby had met the legal threshold for garnishee proceedings, noting that both the decree and the garnishee orders remained valid and enforceable.
“There is no dispute that a certificate of order against the government, dated April 8, 2025, followed a decree arising from arbitration proceedings,” the court stated.
The court dismissed arguments by Kingsway and the Treasury that alleged non-performance justified withholding payment, ruling that such matters had already been conclusively settled through arbitration.
“This court lacks jurisdiction to revisit or review matters already determined in arbitration and adopted as a court decree,” the judgment read.
Attaching debt
Allowing Kobby to recover its dues from funds the Treasury owes Kingsway under the same tender, the judge clarified that while government property cannot be seized, debts owed by the State to third parties are legally attachable.
“Although execution against government assets via attachment and sale is prohibited, debts owed by the government to third parties may be attached,” the judge stated, citing Section 23 of the Government Proceedings Act.
The court also issued a prohibition order, warning that releasing funds to Kingsway would violate final court orders. “Recovering an already adjudicated debt would necessitate further litigation,” the judge observed.
In addition, the court ordered that the decretal sum, garnishee costs and Sh80,000 in judicial review costs be paid to Kobby from funds owed to Kingsway before any remaining balance is released.
The matter will be mentioned on February 10, 2026, for further directions.
