Government creditors in Kenya are facing significant challenges as legal protections make it nearly impossible to execute debt recovery proceedings against its assets.
Many suppliers and contractors, whose debts remain unpaid, find themselves in a dire situation. Some have fallen into depression, faced auctioneers, or tragically taken their own lives due to financial strain.
Even those who have secured court orders to auction government property in an effort to recover dues are ultimately frustrated, as these orders remain unenforceable.
Recent rulings by the Court of Appeal and the Supreme Court have reinforced these legal protections, leaving suppliers with limited recourse.
The 2010 Constitution shields government properties from being auctioned in debt recovery processes. In a ruling dated March 25, 2025, the Supreme Court upheld this stance, confirming that no one can arrest, detain, or sell government ships, aircraft, cargo, or other assets.
This ruling followed a Court of Appeal decision from April 12, 2024, which determined that the National Land Commission (NLC) was a government entity whose assets are protected from being attached.
The NLC sought legal protection from Five Star Agency Limited, which was attempting to recover Sh413,192,500 for land compulsory acquisition.
The NLC had faced repeated garnishee orders targeting its compensation account at the National Bank, which led to a backlog of pending court decrees.
The NLC argued that its accounts and assets were under constant threat due to numerous garnishee applications. In response, the Court ruled that constitutional commissions, such as the NLC, are protected from execution proceedings and asset attachment under the Government Proceedings Act (Cap 40).
“That government under the Government Proceedings Act, Cap 40 Laws of Kenya includes constitutional commissions, such as the applicant (NLC), and it is, therefore, insulated from execution proceedings, attachment of its assets and/or garnishee of its accounts in satisfaction of a decree under Section 21 and 25 of the Government Proceedings Act,” said Justice Martha Koome, in her judgment.
The ruling reinforced that government entities, including constitutional commissions, are insulated from having their assets attached to settle judgments.
This legal protection was further bolstered when the Supreme Court overruled a decision by Justice Nixon Sifuna, who had ruled that Section 21 of the Government Proceedings Act was unconstitutional and discriminatory.
Justice Sifuna’s judgment had stated that the government enjoys special privileges in terms of liability to pay debts. However, the appellate court, in its April 2024 ruling, clarified that enforcement of judgment debts against the government should be pursued through judicial review proceedings, with the primary remedy being an order of mandamus compelling payment.
In the case of Omar Ibrahim vs. the Public Service Commission, the Appellate Court outlined the procedure for enforcing judgment debts against the government.
To enforce a decree, a litigant must first obtain a certificate of costs 21 days after the judgment, which must be served upon the Attorney General. The judges emphasized that, unlike private entities, the government cannot be subject to the same execution measures as other debtors, due to its unique status.
Justice Alnashir Visram, in a previous judgment from January 2005, further clarified that satisfaction of government debt is considered a public expenditure, which must be approved and allocated by Parliament. This ensures that no funds are expended without legislative authorisation.
“It is for this reason that Section 32(1) of the Government Proceedings Act provides that any expenditure incurred by or on behalf of the Government by reason of this Act shall be defrayed out of moneys provided by Parliament,:” said Justice Visram.
According to Justice Visram, allowing execution and attachment of government assets would result in an unsustainable flood of legal claims against the government, which would ultimately destabilise its operations. “State operations will ground to a halt and be paralysed, and soon the government will not only be bankrupt, but its constitutional and statutory duties will not be capable of performance. This will lead to chaos, anarchy and the breakdown of the rule of law,” he said.
He pointed out that the government’s inability to pay immediately stems from the fact that it does not have ready funds in individual ministries to settle judgments or decrees. Instead, such claims must be processed through the Ministry of Finance and Treasury and the Comptroller and Auditor General for approval and allocation from the Consolidated Fund.
The decision highlighted that no individual ministry or department has direct access to funds to settle these claims, which explains the long delays in payment. The process involves parliamentary scrutiny to ensure that public funds are allocated properly, and this can lead to lengthy delays in paying court-decreed amounts.
The Supreme Court and Court of Appeal’s rulings have reinforced the legal protections around government assets, making it almost impossible for creditors to enforce debt recovery through asset attachment or auctioning government properties. Creditors seeking to recover money from the government must navigate a complex process involving judicial review and the approval of the Ministry of Finance.
The government’s structure and legal framework aim to prevent an unsustainable flood of legal claims that could destabilise its operations. As a result, many suppliers and contractors find themselves stuck, unable to collect debts.