A Kenyan High Court has ordered technology company DynamicNAV Systems Limited to pay 95.4 million shillings to consultancy firm Nisa Holdings Limited for breaching a 2020 agreement that helped secure a major parliamentary security contract.
Justice Helene Namisi ruled Dec. 5 that the consultancy fee agreement was valid and enforceable. She rejected DynamicNAV’s claims that it was merely a non-disclosure agreement and that the company’s project manager lacked authority to sign it.
The dispute centered on DynamicNAV’s 279 million shilling contract with the Parliamentary Service Commission to implement an Integrated Security Management System. Nisa Holdings claimed its services — including strategic procurement support and facilitating a joint venture with the University of Nairobi Enterprise Services — directly led to the award.
Roots of the Dispute
The two firms signed the agreement in April 2020. It entitled Nisa to a fee capped at 100 million shillings, equivalent to 50% of project proceeds. DynamicNAV made a partial payment of 4.6 million shillings but refused the balance after receiving over 200 million shillings from the commission by late 2021.
DynamicNAV argued the document created no financial obligation, that the manager had no binding authority and that the fee was excessive given the company’s reported net profit of 45 million shillings from the project.
Namisi dismissed these defenses. She said the agreement’s language clearly outlined a commercial arrangement, not a vague non-disclosure pact. Attempts to reinterpret it through oral testimony violated the parol evidence rule, which bars extrinsic evidence from altering unambiguous written contracts.
Authority and Ratification
On the issue of authority, the judge found the project manager had apparent authority, reinforced by his use of the company stamp and DynamicNAV’s partial payment, which amounted to ratification.
“No obligation arose for the plaintiff to inspect board minutes before entering the contract,” Namisi wrote.
She also upheld the principle of freedom of contract in Kenyan law, refusing to void the deal as unconscionable.
“Commercial parties are bound by their bargains,” the ruling stated. “The court will not rescue sophisticated actors from agreements they freely entered.”
Namisi emphasized Nisa’s role as crucial in originating the business opportunity.
“The plaintiff served as the bridge to the tender,” she said, adding that compensation for such facilitation is standard even when the consultant plays no role in execution.
Outcome and Dismissal
The court awarded Nisa 95.4 million shillings — the outstanding balance plus interest — while dismissing the claim against the project manager personally. The judge noted agents acting for disclosed principals incur no individual liability absent personal guarantees.
The case, filed in 2022, highlights risks in Kenya’s competitive public procurement sector, where business development consultancies often demand substantial success fees.
It was not immediately clear whether DynamicNAV planned to appeal.
The ruling reinforces judicial deference to clear contractual terms, potentially deterring efforts to evade obligations through post-hoc reinterpretations.
As Kenya’s technology and infrastructure sectors grow, experts say such decisions could push companies toward more precise drafting to avoid prolonged disputes.
