The High Court has blocked the National Treasury from releasing contract payments to Kingsway Business Systems Limited, a firm awarded a government tender linked to the State-run Integrated Financial Management Information System (IFMIS), due to an outstanding debt of Sh212.8 million owed to its business partner, Kobby Technologies Limited.
In a ruling enforcing an arbitration-backed decree, the court directed the Principal Secretary at the National Treasury to comply with an earlier judgment issued in favour of Kobby Technologies.
The court stated that while government assets themselves cannot be seized, “the law permits attaching debts owed by the government to third parties.”
“The garnishee order and decree remain valid and enforceable,” the judge said, prohibiting any release of funds to Kingsway Business Systems Limited until the debt is fully settled.
The dispute stems from a 2019 government tender for the provision of IFMIS services, aimed at enhancing e-Procurement and other financial systems across government and semi-autonomous agencies.
In February 2021, the tender was awarded to a consortium of Kingsway Business Systems, Kobby Technologies, and Inplenion Eastern Africa for a three-year contract valued at Sh647 million. Kobby Technologies’ share was Sh303.9 million in professional fees.
A disagreement over a subcontract awarded in March 2021 between Kingsway and Kobby led to arbitration.
“The arbitrator ruled in favour of Kobby in October 2022, and the award was adopted as a High Court decree in July 2024, granting Kobby Sh165.8 million plus interest and costs,” court records show.
When Kingsway failed to pay, Kobby Technologies sought to garnish funds owed by the Treasury under the same tender.
In February 2025, the court issued a garnishee order against the government for Sh212.8 million. Despite being served, the certificate order was not honored, prompting Kobby to seek judicial review against the Attorney General and the Treasury’s Principal Secretary.
The court affirmed Kobby’s legal right, stating, “Kobby Technologies has met the legal threshold for garnishee orders. The decree and garnishee orders are binding and enforceable, and the Treasury must comply.”
