Court suspends garnishee orders that froze all Ketraco bank accounts over Sh10 billion claim

The High Court Monday suspended garnishee orders that froze all Kenya Electricity Transmission Company Limited (KETRACO) bank accounts over Sh10 billion claim.

Justice Bahati Mwamuye issued the conservatory orders following an application filed by Lalashe Consulting.

The company argued that the action for garnishee orders threatens to cripple national electricity transmission and disrupt essential services across the country.

It added the action threatens to cripple national electricity transmission and disrupt essential services across the country.

“Pending the inter partes hearing and determination of the Petitioner/Applicant’s Notice of Motion Application dated 22/12/2025, a conservatory order be and is hereby issued restraining the respondents, jointly or severally, and whether by themselves, their officers, agents, servants, or otherwise howsoever, from authorizing, approving, processing, facilitating, or effecting any release, transfer, remittance,or disbursement of public funds, whether directly or indirectly, howsoever arising, in favour of Inabensa Enerji A.Ş.,the Interested Party, or any related or associated entity,
or with respect to the subject matter of the Petition herein.”

“Pending the inter partes hearing and determination of the Petitioner/Applicant’s Notice of Motion Application dated 22/12/2025, a conservatory order be and is hereby issued directing the Respondents to collate and preserve all records, approvals, instructions, correspondence, payment
instruments, and internal or external communications relating to, connected with, or arising from the subject matter of the Petition herein,” the judge said.

He ordered Lalashe to serve the Respondents and the Interested Party with the Application, Petition, and the order immediately and file an Affidavit(s) of Service in that regard by close of business December 24, 2025.

The responses to both the application and the petition shall be filed and served by close of business January 16, 2025.

The mention shall be on January 29, 2026 virtually to confirm compliance and to take directions on the expedited hearing and determination of the application and/or petition.

According to court documents, the garnishee orders arose from efforts to enforce a final arbitral award in favour of Spanish firm Instalaciones Inabensa S.A., relating to the Lessos-Tororo 400kV Transmission Line Project.

The award, delivered on July 30, 2019, granted the firm over €30.8 million in principal, €6.4 million in accrued interest, and more than Sh102 million in costs, with interest continuing to accrue at rates of up to 18 per cent per annum.

The garnishee orders were issued following a ruling delivered on December 11, 2025 by High Court Judge Peter Mulwa, allowing enforcement proceedings in favour of Instalaciones Inabensa S.A., a Spanish contractor that has since entered bankruptcy and insolvency proceedings abroad.

While acknowledging that the underlying dispute has been in the courts for years, KETRACO maintains that the present fight is not about reopening liability, but about ensuring that enforcement is carried out in a manner consistent with proportionality, public finance discipline, and statutory governance.
KETRACO had also moved to Court challenging the garnishee orders.

The company argued that the action threatens to cripple national electricity transmission and disrupt essential services across the country.

KETRACO argued that the freezing of all its operational accounts has already caused serious paralysis, preventing it from accessing funds needed to operate and maintain the national high-voltage transmission grid and regional interconnectors.

Through its lawyers DBM Mosota and Mr Emmanuel Mumia, the Company argued that the case raises core questions about the limits of garnishee jurisdiction, particularly where execution is directed at a State corporation entrusted with national infrastructure.

According to the legal team, freezing seventeen accounts in one sweep goes beyond lawful enforcement and offends established principles that execution should not cripple a public utility or defeat the very public interest the law is meant to protect.

The lawyers further contend that the Court must first be satisfied as to the identity of the rightful payee before public funds are released, noting that the original contractor is bankrupt and subject to foreign insolvency proceedings.
They warned that premature payment could expose the country to the risk of settling the same liability twice.

“This is a case about restraint at the execution stage,” the lawyers argue, adding that enforcement must follow entitlement and not precede it, especially where taxpayer funds are involved.

The state-owned utility in its urgent application they sought a stay of execution of garnishee orders issued on December 11, 2025, which attached funds held in its accounts at NCBA Bank Kenya PLC, Kenya Commercial Bank, Standard Chartered Bank, Cooperative Bank of Kenya and Citi Bank. The utility further said it employs more than 540 staff and is now unable to meet salary obligations, service loans, procure key inputs or honour contractual commitments due to the account freeze, exposing it to labour disputes and legal action.

In a supporting affidavit sworn by Company Secretary and General Manager Legal Services Florence Mitey, KETRACO said the magnitude of the arbitral award far exceeds its financial capacity and that immediate enforcement would defeat its statutory mandate and undermine public interest.

KETRACO also indicated that it intends to appeal the ruling that led to the issuance of the garnishee orders and is seeking a stay to preserve the subject matter of the intended appeal.

The company argued that the decree-holder has since been liquidated, raising concerns over the recoverability of funds should the appeal succeed.