Strategy thoughts?
 

Don’t want to get into too specific a detail as this is a live dispute but i'm looking for an overview strategy here!

The bones of the issue is that the organisation purchased tickets for 2 foreign nationals visiting us; we got one of the names misspelled and that individual was required to buy a 3rd ticket at his airport. The other gent got prevented from leaving at his departure airport due to travelling on a valid personal passport, however his authorities maintained he had to travel on a government passport (which had not been issued to him) so he didn't travel (but still wants to).

Guess what.. klm maintain the 2 tickets we bought are non refundable and that’s the end of it. £2,000 at stake here!
Thoughts on a strategy?

You should give a little more details to understand as country of departure/arrival and the nationality of the passengers if different.

About the misspelling, how many letters were wrong? Was it the title? Did the passenger notice it before?
About the passport, it is immigration regulations that are at stake. I am not familiar with all the kind of passports, are you meaning a diplomatic one?

About the refund, what was the booking class? Different fares mean different rules and the cheapest tickets are most of the time non changeable and non refundable.

Maybe some others may help you better than I did.

What a tale of misfortune!

It's really strange that the authorities there (wherever there is) would refuse to let someone with a "valid personal passport" to leave the country - but as GuillaumeD mentions, it sounds like an immigration issue, and that the person did not in fact have the right to travel to the UK (ie did not have the correct or valid visa). If so, there's probably not much you can do about that one - it's up to the traveller to ensure they comply with all immigration laws, and it's up to the airline to verify this on checkin (at which time they can refuse boarding, as many countries fine airlines that bring passengers into the country without the required paperwork).

I can only offer you a strategy for the future. Your organization learned a wise lesson to not buying cheap tickets with very strict conditions again for foreign visitors. The person who bought those nonrefundable tickets took a risk. KLM gives very clear information on ticket conditions, so they are not responsible here.