Automated Summary
Key Facts
Muga Electrical Contractors Limited and Realtech Plumbers Limited (plaintiffs) entered into pre-subcontract agreements with Rimun Ventures Limited (defendant) in August 2020 for electrical and plumbing works on a Kenyatta National Hospital mortuary project. The defendant was awarded the tender but commenced construction without involving the plaintiffs and engaged third parties instead. The plaintiffs claimed breach of contract and damages totaling Kshs. 9,948,207.00 and Kshs. 7,560,410.00 respectively. The court found the defendant breached the agreements and awarded the plaintiffs Kshs. 2,487,051.75 and Kshs. 1,890,102.50 as special damages.
Transaction Type
Construction Contract for Hospital Mortuary Project
Issues
- The court assessed whether the Plaintiffs were entitled to special damages for the loss of business opportunities (Kshs. 9,948,207.00 and Kshs. 7,560,410.00) due to the Defendant's breach. The court concluded the Plaintiffs are entitled to 25% of these amounts (Kshs. 2,487,051.75 and Kshs. 1,890,102.50) as proven damages.
- The court determined whether the Defendant breached the terms of the Pre-Subcontract Agreements by failing to award subcontracts to the Plaintiffs as agreed and instead engaging third parties. The court found the Defendant had breached the agreements by commencing the project without the Plaintiffs and not adhering to the stipulated roles.
Holdings
The court found that the Defendant breached the Pre-Subcontract Agreements by awarding the subcontracts to third parties instead of the Plaintiffs, as confirmed in paragraph 14 of the judgment. The Plaintiffs' claim of breach was not contested by the Defendant, leading to an affirmative determination on this issue.
Remedies
- A declaration be and is hereby made that the Defendant breached the terms of the Pre-Sub Contract Agreements.
- The Plaintiffs are awarded costs of the suit.
- Interest at court rates on the (b) and (c) from the date of judgment till payment in full.
- Judgment be and is hereby entered for the 2nd Plaintiff against the Defendant for the sum of Kshs. 1,890,102.50/=.
- Judgment be and is hereby entered for the 1st Plaintiff against the Defendant for the sum of Kshs. 2,487,051.75/=.
Contract Value
49219625.00
Monetary Damages
4377154.25
Legal Principles
- The court clarified that the burden of proof remains on the plaintiff even when the defendant fails to contest the case. This principle was affirmed in cases like Autar Singh Babra [1998] and Gichinga Kibutha v Caroline Nduku [2018], where unsubstantiated defences did not absolve the plaintiff of their duty to meet the required standard.
- The court emphasized that in civil cases, a claim must be proven on a balance of probability, as established in Miller v. Minister of Pensions [1947] and reiterated by the Court of Appeal in Kirugi and Another v Kabiya [1987]. The standard requires the plaintiff to demonstrate that their case is more probable than not.
Precedent Name
- Gichinga Kibutha v Caroline Nduku
- Nyamogo & Nyamogo Advocates v Barclays Bank of Kenya
- Kirugi and Another v Kabiya & 3 others
- James Muniu Mucheru v National Bank of Kenya Ltd
- Motex Knitwear Limited v Gopites Knitwear Mills Limited
- Autar Singh Babra And Another v Raju Govindil
Key Disputed Contract Clauses
The Agreements stipulated that the Defendant, as the main contractor, would award subcontracts for electrical and plumbing works to the Plaintiffs (Muga Electrical Contractors Limited and Realtech Plumbers Limited) after securing the tender. The court found the Defendant breached this obligation by failing to involve the Plaintiffs in the project and instead engaging third parties.
Cited Statute
Evidence Act
Judge Name
J.W.W. Mong'are
Passage Text
- The Plaintiffs have demonstrated that these were the sums quoted and payable for the said works as is evident from the tender award document (PExhibit 4). It is also obvious that the Plaintiffs lost this business opportunity as a result of this breach by the Defendant.
- Judgment be and is hereby entered for the 1st Plaintiff against the Defendant for the sum of Kshs. 2,487,051.75/= and for the 2nd Plaintiff for Kshs. 1,890,102.50/.
- This position was not controverted by the Defendant and as such constitutes an obvious breach of the Agreements. I thus answer this issue in the affirmative that the Defendant breached the Pre-Sub Contract Agreements that it had entered into with the Plaintiffs.
Damages / Relief Type
- Judgment for the 2nd Plaintiff against the Defendant for Kshs. 1,890,102.50.
- Judgment for the 1st Plaintiff against the Defendant for Kshs. 2,487,051.75.
- Declaration that the Defendant breached the Pre-Sub Contract Agreements.
- Plaintiffs awarded costs of the suit.
- Interest at court rates on the judgments from the date of judgment till payment in full.