By Benadeta Mwaura - Reporter
Kenya, 7 January 2026 - In a landmark decision, the High Court of Kenya has ruled that money owed by the National Treasury to a company under an IFMIS contract cannot be paid until an outstanding debt to another company is settled, effectively permitting the debt to be recovered directly from government payments.
The case revolves around a 2019 government contract aimed at supporting and upgrading the Integrated Financial Management Information System (IFMIS) the platform the government relies on to manage public finances and execute payments.
The contract was awarded to a consortium of Kingsway Business Systems, Kobby Technologies, and Inplenion Eastern Africa, setting the stage for a dispute over work payments.
Disagreement emerged between Kobby Technologies and Kingsway Business Systems over compensation for services rendered.
The matter was first handled through arbitration, which ruled in favor of Kobby in October 2022.
This award was subsequently converted into a court decree in July 2024, obliging Kingsway to pay roughly KSh 165.8 million plus interest and costs.
Kingsway failed to settle the payment, prompting Kobby to secure a garnishee order in February 2025, a legal instrument that allows debt recovery from money owed to a debtor, in this case totalling around KSh 212.8 million.
The High Court confirmed that Kobby had met all legal requirements to claim funds owed by the Treasury to Kingsway under the IFMIS contract.
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While government assets themselves cannot be physically seized, debts owed by the government to private entities can be attached, and this was precisely what the court allowed.
As a result, the Treasury is barred from releasing any funds to Kingsway until Kobby’s outstanding debt is fully cleared.
The court also ordered that garnishee costs and judicial review expenses, KSh 80,000, be settled first from the amounts owed before any remaining balance can be disbursed.
This case is unusual in Kenya, as it allows a private company to recover money directly from government payments intended for another contractor.
The ruling reinforces the enforceability of arbitration awards once they are converted into court decrees, even in disputes involving government contracts.
Legal experts suggest the judgment sets a precedent for future government contract disputes, highlighting that arbitration awards are not merely symbolic but carry full legal weight, ensuring private contractors have a pathway to recover debts when obligations are ignored.
Kenya High Court Allows Seizure of Treasury Funds in IFMIS Contract Dispute
High Court Bars Treasury Pay to Kingsway Until Kobby Debt Cleared
