Court Orders Tech Firm to Pay Sh95.4 Million in PSC Security Project Dispute
The High Court has ordered technology company Dynamicnav Systems Limited to pay Sh95.4 million to Nisa Holdings Limited for breaching a consultancy agreement linked to the Integrated Security Management System (ISMS) project for the Parliamentary Service Commission (PSC).
Justice Helene Namisi ruled that Dynamicnav must pay Sh95,400,000, plus interest at court rates from the date the suit was filed until payment is made in full.
Court Says Consultancy Fee Was Contractually Owed
The dispute arose from a Consultancy Fee Agreement signed on 22 April 2020, under which Nisa Holdings was to provide business development support, preparation of bid documents, and strategic facilitation to help Dynamicnav secure the PSC tender.
Although the initial project cost was estimated at Sh240 million, evidence showed the final PSC contract—signed between Dynamicnav, the University of Nairobi Enterprises and Services (UNES), and PSC—rose to Sh279 million.
The judge noted that while Nisa could have claimed a proportionately higher fee due to the increased contract value, it opted to remain within the fixed Sh100 million agreed in the consultancy contract.
Co-Defendant Omanga Cleared of Personal Liability
The suit against David Omanga, who signed the agreement on behalf of Dynamicnav Systems, was dismissed. Justice Namisi held that Omanga signed purely in his representative capacity and there was no evidence he personally guaranteed the contract.
“An agent acting for a disclosed principal is not personally liable unless they guaranteed the debt or acted fraudulently,” the judge stated.
How the Dispute Began
In early 2020, Dynamicnav identified a tender by PSC for project management and supervision of the ISMS project. Aware of its limitations in networks and capacity, the firm sought support from Nisa Holdings, which represented itself as experienced in navigating procurement processes and developing tender strategies.
On 12 June 2020, Dynamicnav and UNES won the PSC contract worth Sh279,154,283.04, a development Nisa says it facilitated.
After PSC paid Dynamicnav for work done, Nisa demanded its contractual fee of Sh100 million. Dynamicnav only paid Sh4.6 million, describing it as a “finder’s fee,” and later denied any further financial obligation.
Judge: Nisa Opened the Door—And That Was the Job
Dynamicnav argued Nisa did not perform work worth the Sh100 million fee and had no part in technical implementation of the project.
Justice Namisi dismissed this defence, clarifying that the consultancy was for business origination, not technical execution.
“Nisa’s role was to open the door. The question is: did the door open? Yes. Dynamicnav secured the contract with PSC,” she ruled.
The court emphasized that introductions and business origination are recognised and valuable forms of consultancy in commercial law.
Court Rejects Claim That Fee Was Excessive
Dynamicnav also argued that the fee was unreasonable since its profits from the project amounted to only Sh45 million.
Justice Namisi rejected this argument, noting that courts cannot rewrite contracts freely entered into by parties. She stressed the principle of freedom of contract as central in Kenyan commercial law.
With the ruling, Dynamicnav must now settle the Sh95.4 million balance owed to Nisa Holdings, plus accrued interest.