The Sly Cats were a group of (mainly political) prisoners in Kovir, released by King Esterad Thyssen to serve as replacements mercenary branches fighting against Nilfgaardians. Of course Kovir officially "was, is and will remain neutral," and did not support the Northern Kingdoms.
The "sly cats" were not anything like an organized group; the name was just used by King Esterad Thyssen for all the released prisoners, as a reference to a parable by which his wife, Queen Zuleyka, brought the idea to him.