Court dismisses applications to lift freeze orders in Sh6.1 billion NYS case

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The High Court has dismissed applications by several suppliers seeking to lift orders freezing the payment of more than Sh6.1 billion in pending bills owed by the National Youth Service (NYS).

In a ruling delivered virtually on July 31, 2026, Justice Rose Ougo upheld interim orders issued on December 8, 2025, restraining NYS from paying six companies a total of Sh6,167,797,655 pending the hearing and determination of a suit filed by the anti-graft agency.

The EACC maintained that the claims are founded on fraudulent procurement documents for goods that were never supplied.

The 1st, 5th and 6th defendants had asked the court to set aside the orders, arguing that the EACC failed to disclose material facts when obtaining the ex parte injunctions.

They relied on decisions by the Office of the Director of Public Prosecutions (ODPP), which declined to institute criminal charges and advised the commission to close its investigation file, as well as findings by multi-agency verification teams that allegedly cleared the claims for payment.

However, Justice Ougo held that those findings did not override the EACC’s constitutional and statutory mandate to safeguard public resources.

“The fact of those clearances by those bodies does not persuade the court that the ex parte orders were not reasonably issued,” the judge ruled.

Among the suppliers challenging the freeze were Benson Gethi Wangu, trading as Highview Trading Schoolwork Enterprises, Newtool Mart Trading, Ratego Technologies, Realtool Trading and Comptool Trading.

The 2nd defendant argued that they had legitimately supplied goods, including diesel worth sh 714 million, and had submitted all the required documentation to support their payment claims.

The 5th and 6th defendants, through their director Michael Tyson Otieno, maintained that there was no credible evidence linking them to fraud or any illegality in the procurement process.

The EACC, however, told the court that forensic investigations uncovered an elaborate scheme involving six suppliers and nine NYS officials who allegedly falsified procurement and payment documents to support claims arising from fictitious contracts.

According to the commission, releasing the funds before the case is determined would expose public money to the risk of being irrecoverable should the suit ultimately succeed.

In her ruling, Justice Ougo ruled that courts should adopt a precautionary approach in anti-corruption cases.

“Any suspected property or funds need to be quarantined and preserved until it is determined that it is not a proceed of crime,” the judge ruled.

The court also dismissed arguments that the matter was barred by the doctrines of sub judice and res judicata because of another pending petition filed by some of the suppliers, finding that the issues before the two courts were materially different.

The dispute stems from investigations launched by the EACC following a request made in July 2022 by the Cabinet Secretary for the Ministry of Public Service, Gender, Senior Citizens Affairs and Special Programmes.

The claims relate to payments allegedly owed for goods supplied to NYS during the 2013/2014, 2014/2015 and 2015/2016 financial years.

Although the Pending Bills Verification Committee had recommended payment for some of the vouchers before its mandate expired on December 31, 2025, the EACC maintains that its forensic audit uncovered inconsistencies, including counterfeit Local Purchase Orders and procurement documents that lacked proper authorization.

Justice Ougo consequently allowed the EACC’s application, restraining the six supplier companies from claiming the Sh6.16 billion and barring NYS from effecting any payments until the case is fully heard and determined.

The court directed that costs of the applications shall abide the outcome of the main suit.

The 8th and 9th defendants, both NYS officers who argued they had been improperly joined in the proceedings, will remain parties to the case as the allegations against them are determined during the full hearing.