Indian firm demands $630,000 from kenyan partner over failed contract

An Indian technology firm, United Business Solution, is demanding $630,000 (approximately KSh81 million) from Kenyan firm Kingsway Business Solution over a soured contract related to a government tender.
UBS and KBS jointly secured a tender from the National Treasury in 2021 to develop a Public Investment Management Information System,a project valued at KSh320 million.
However, disputes soon emerged, leading to allegations of fraud and breach of contract.
On 18 May 2021, KBS signed and executed the contract with the National Treasury for KSh320 million. The agreement recognized KBS as the lead bidder in partnership with UBS.
By 27 July 2021, UBS submitted its first invoice for the completed study.
However, On 30 July 2021, a letter signed by KBS official Kenneth Kadenge stated that the contract with UBS was invalid as the Treasury had opted for an “in-house” engagement with KBS.
“I refer to the contract between KBS and UBS for the implementation of PIMIS at the National Treasury. This contract is no longer valid, as the client—TNT—has canceled the tender and chosen to engage with us directly under new in-house terms.”
“These new terms are based on the discussions held during your meeting with the Director in Dubai. However, the client has instructed us to proceed with the remaining project milestones, specifically development and training, as per the previous arrangement,” reads a letter signed by Kenneth Kadenge on behalf of the KBS director.
UBS has accused KBS of misrepresentation and financial malpractice. In an interview with Kurunzi News, Alfred Agoi Masadia, who also chairs the board of KenGen, defended KBS, stating that UBS lacked the capacity to undertake the project, particularly during the COVID-19 pandemic when travel restrictions hindered the deployment of UBS technicians.
“We had the skills and resources to complete the project. UBS never handled anything. Their technicians couldn’t travel to Kenya due to COVID-19, so we opted to execute the project alone,” Agoi said.
UBS, however, disputes this narrative, citing previous instances where KBS allegedly used its software without authorization.
The firms had collaborated since 2016, jointly bidding on government projects. However, UBS claims KBS repeatedly misled them about the outcome of tenders and allegedly bypassed them in at least one county government project, leading to financial losses.
Despite their joint venture, UBS and KBS did not operate a joint bank account, which UBS’s legal counsel, Eddy Orinda, attributes to KBS’s preference for financial secrecy.
Orinda alleges that KBS inflates project costs, prevents direct communication with procurement officials, and failed to comply with a directive from the Commission on Administrative Justice (Ombudsman) to disclose the original contract details.
The Indian firm acknowledges that no fresh risk assessment was conducted before partnering with KBS, as they had worked together for years based on mutual trust.
The firm maintains that it has not received any payment for its work on the PIMIS project, amounting to $630,000. The firm is now pursuing legal action to recover the funds and has raised concerns over KBS’s history of breaching agreements.
Documents reviewed by Kurunzi News show that KBS and UBS signed their joint venture agreement on 17 March 2021, two months before the National Treasury officially awarded the contract on 18 May 2021.
The contract explicitly recognized UBS as a partner in the project, making the ongoing financial dispute a matter of contractual integrity.
In a letter dated 15 November, the National Treasury acknowledged the complaint but stated that it is awaiting rulings from the Commission on Administrative Justice and findings from the Ethics and Anti-Corruption Commission.
The EACC registered the complaint and initiated a forensic investigation. After one and a half years, the EACC has now requested the Public Procurement Regulatory Authority to investigate the matter further.