KETRACO fights garnishee orders, says Sh10 billion claim threatens power transmission

Kenya Electricity Transmission Company Limited (KETRACO) moved to Court challenging garnishee orders that froze all its bank accounts over Sh10 billion claim.

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

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 warn 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.

According to court documents, the 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.

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.

In the certificate of urgency, the company warns that unless the court intervenes immediately, the garnishee orders could be made absolute, forcing banks to release the attached funds to the decree-holder and potentially plunging the country into a nationwide blackout.

“The Applicant is solely responsible for reliable power delivery throughout the country and within the region,” KETRACO said.

They argue that an electricity blackout would severely affect critical infrastructure, national security, industrial production and essential services such as healthcare.

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.

The state corporation asked the court to grant a 90-day stay to allow government-led negotiations to continue and for the parties to agree on a structured settlement or payment plan.

It also expressed willingness to provide a bank guarantee as security.

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.

The dispute now places before the Court of Appeal a significant question on how far commercial enforcement can go when it collides with the operations of a national transmission utility that underpins the country’s energy system.