https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/11928

REPUBLIC OF KENYA IN THE HIGH COURT OF KENYA AT KIAMBU COMMERCIAL SUIT NO.14 OF 2019 ACCORDIA HOLDINGS LIMITED ………………………………. PLAINTIFF MURUGA INVESTMENT LIMITED …………………………. DEFENDANT VERSUS JUDGMENT INTRODUCTION 1. Before this Court is a dispute founded on an alleged breach of a long- term Cleaning Services Agreement. The Plaintiff, Accordia Holding Limited, commenced these proceedings by way of a Plaint dated 3rd September 2019 against the Defendant, contending that the Defendant unlawfully terminated a contract under which the Plaintiff had been engaged to provide general cleaning services at Ciata City Mall, situated on L.R. No. 5989/178, Nairobi. 2. The Plaintiff avers that the termination of the contract was wrongful and in breach of its terms. Consequently, the Plaintiff seeks Judgment against the Defendant for the following reliefs:- a) Kshs.8,635,200 being the amount due and unpaid for the services offered. b) Kshs.178,825,600 being the amount payable for the HCCOMM. NO.14 OF 2019 JUDGMENT - Page 1 of 27 remainder of the 15 years (164 months) as per Clause B under the terms of disengagement under the contract. c) Kshs.20,955,556 being remainder of the cost of the contract. d) Costs of the suit. e) Interest on (a), (b), (c) and (d) above at court rates f) Any other order that this Court shall deem fit to grant. 3. The Defendant filed a Statement of Defence dated 30th September 2019, denying the Plaintiff's claim and disputing, inter alia, the validity and enforceability of the alleged agreement, the authority of the persons said to have executed it, and the Plaintiff's entitlement to the reliefs sought. 4. The suit proceeded to a full hearing at which the Plaintiff called two witnesses in support of its case, while the Defendant likewise called two witnesses in defence. Upon the close of the oral hearing, the parties filed comprehensive written submissions setting out their respective factual and legal positions, which this Court has carefully considered alongside the pleadings, the evidence on record and the applicable law. THE PLAINTIFF’S CASE 5. The Plaintiff's case is founded upon an agreement dated 21 st December 2017, by which it contends that the Defendant engaged it to HCCOMM. NO.14 OF 2019 JUDGMENT - Page 2 of 27 provide general cleaning services at Ciata City Mall. According to the Plaintiff, the agreement was for an initial term of fifteen (15) years at a monthly consideration of Kshs.940,000, renewable for a further term of fifteen (15) years. The agreed consideration was payable quarterly, subject to a bi-annual increment of two per cent (2%). It was further pleaded that invoices were to issue from 1st April 2018 and that any payment delayed beyond fifteen (15) working days would attract an additional charge of five per cent (5%). 6. The Plaintiff further pleaded that, pursuant to the agreement, it was required to pay a contract acquisition cost of Kshs.23,000,000 to Ben the Agency Consultancy Limited. It averred that it paid Kshs. 20,000,000 on 29th December 2017 and the balance of Kshs. 3,000,000 on 7th March 2018. To finance this obligation, the Plaintiff stated that it obtained a loan facility of Kshs.30,000,000 from I & M Bank. 7. It was the Plaintiff's case that it commenced performance of the contract on 1st January 2018 and issued its first invoice in the sum of Kshs.3,271,200 on 25th March 2018, which was paid in full on 27th April 2018 through Ben the Agent Consultancy. The Plaintiff maintained that it rendered cleaning services for approximately sixteen (16) months without any complaint from the tenants until April 2019, when the Defendant allegedly terminated the contract without notice. 8. The Plaintiff asserted that the agreement expressly regulated the circumstances under which the contract could be terminated. It HCCOMM. NO.14 OF 2019 JUDGMENT - Page 3 of 27 pleaded that termination could only occur where corporate tenants lodged affidavits complaining of deficiencies in workplace housekeeping and cleanliness, failing which the Defendant was obliged, upon disengagement, to pay the contractual fees for the unexpired portion of the fifteen-year term. The Plaintiff maintained that no such complaints or affidavits were ever lodged and, consequently, that the Defendant was in breach of the agreement. 9. In its submissions, the Plaintiff maintained that the agreement dated 21st December 2017 constituted a valid and binding contract between the parties. It argued that Ben the Agent Consultancy Limited was not a contracting party but merely appeared on the agreement as a witness. The Plaintiff further submitted that the Defendant's engagement of Ben the Agent Consultancy Limited conferred upon it responsibilities relating to the management of the Defendant's premises, including the identification, engagement and onboarding of service providers necessary for the operation of the building. 10. The Plaintiff further invoked the doctrine of apparent or ostensible authority, contending that the Defendant, through its words and conduct, represented Ben the Agent Consultancy Limited as having authority to engage service providers on its behalf. Reliance was placed on Freeman and Lockyer (A Firm) –vs- Buckhurst Park Properties (Mangal) Ltd & Another [1964] 1 All ER 630, as cited in Kibiri & 5 Others –vs- Harambee Savings and Credit Co-operative Society Limited [2024] KEELC 1149 (KLR), for the proposition that a principal is bound by the acts of an agent where the principal has HCCOMM. NO.14 OF 2019 JUDGMENT - Page 4 of 27 represented the agent as possessing the requisite authority and a third party has acted upon that representation in good faith. 11. It was submitted that the Defendant appointed Ben the Agent Consultancy Limited to manage its building, directed the Plaintiff to transact through the said agent, accepted the Plaintiff's cleaning services for approximately sixteen (16) months, made several payments through the agent in partial performance of the contractual obligations, and did not challenge the validity of the agreement during that period. The Plaintiff contended that, by its conduct, the Defendant held out the agent as possessing authority to engage service providers on its behalf and was therefore estopped from denying that authority. 12. The Plaintiff further relied on the Indoor Management Rule, commonly referred to as the rule in Royal British Bank –vs- Turquand, arguing that a party dealing with a company is entitled to assume that the company's internal procedures and authorisations have been duly complied with. It submitted that the Defendant could not avoid its contractual obligations by relying on alleged internal irregularities after having consistently acted in a manner affirming the validity of the transaction. 13. On the execution of the agreement, the Plaintiff submitted that the Companies Act, 2015 does not require every company to execute documents under a common seal and that Section 25 of the Act permits execution either under the company's common seal or by authorised signatories in the manner prescribed by the Act. The Plaintiff further contended that the Defendant's challenge to the HCCOMM. NO.14 OF 2019 JUDGMENT - Page 5 of 27 witnessing of the agreement was unsubstantiated, maintaining that the evidence tendered in that regard did not displace the validity of the agreement. 14. The Plaintiff finally submitted that the agreement expressly prescribed the circumstances under which it could be terminated and that the Defendant terminated the contract in April 2019 without notice and without producing the affidavits contemplated under the agreement. It therefore contended that the termination constituted a breach of contract, resulting in loss under three heads, namely accrued but unpaid contractual fees, loss of anticipated earnings for the remainder of the contractual term, and the unrecovered cost of the contract. On that basis, the Plaintiff urged the Court to find that the agreement was valid and binding and to grant the reliefs sought in the Plaint. THE DEFENDANT’S CASE 15. The Defendant, by its Statement of Defence dated 30th September 2019, denied the Plaintiff's claim in its entirety and put the Plaintiff to strict proof thereof. While admitting that it had engaged Ben the Agent Consultancy Limited as its letting agent, the Defendant maintained that the agent's mandate was strictly limited to procuring prospective tenants. It was the Defendant's position that Ben the Agent Consultancy Limited had neither actual nor apparent authority to enter into contracts for the provision of services on its behalf or to receive and remit payments on its behalf. 16. The Defendant further challenged the alleged payment of HCCOMM. NO.14 OF 2019 JUDGMENT - Page 6 of 27 Kshs.23,000,000 to Ben the Agent Consultancy Limited as the purported cost of the contract. It pleaded that the transaction was suspect, illegal, fraudulent and corrupt, and asserted that it was designed to defraud and extort money from the Defendant. On that basis, the Defendant invoked the principle that no party ought to derive a benefit from an illegal contract. 17. The Defendant also disputed the validity of the Agreement dated 21 st December 2017 upon which the Plaintiff's claim is founded. It identified what it considered to be several irregularities in the document, including the absence of the common seals of both companies, the absence of the Defendant's directors' signatures, and irregularities in its execution and witnessing. In particular, it contended that although the agreement purported to have been witnessed by C.N. Karanja & Associates Advocates, it bore a receiving stamp of Kagwe Kamau & Karanja Advocates. According to the Defendant, these irregularities rendered the document inconsistent with the ordinary standards applicable to agreements prepared or witnessed by advocates. 18. In light of the foregoing, the Defendant maintained that the Plaint disclosed no reasonable cause of action against it and contended that any claim arising from the alleged transaction lay, if at all, between the Plaintiff and Ben the Agent Consultancy Limited. 19. In its written submissions, the Defendant reiterated that no evidence had been adduced demonstrating that it authorised the Plaintiff to provide cleaning services at Ciata City Mall. It submitted that the HCCOMM. NO.14 OF 2019 JUDGMENT - Page 7 of 27 Plaintiff's own evidence established that its engagement was through Ben the Agent Consultancy Limited and not the Defendant. The Defendant further relied on the Professional Letting Agreement dated 16th January 2016 and the Commission Letting Agreement dated 5th September 2017 between itself and Ben the Agent Consultancy Limited, contending that neither agreement authorised the agent to procure cleaning services or enter into service contracts on the Defendant's behalf. 20. The Defendant further submitted that the Plaintiff had failed to prove the existence of any pre-existing cleaning contract held by Ciata City Cleaners, as alleged by PW2. It argued that PW2's testimony in that regard was inconsistent with that of PW1, who testified that he was unaware of an entity known as Ciata City Cleaners Limited. The Defendant also pointed to PW1's evidence that the monies paid to PW2 constituted a facilitation payment for the cleaning contract. It submitted that no evidence was tendered to demonstrate that those funds were ever remitted either to the Defendant or to Ciata City Cleaners Limited. On the contrary, PW2 acknowledged that the monies were paid into his personal account and that he utilised the proceeds to purchase a house in Runda Paradise Estate. 21. The Defendant further argued that no individual director could bind the company in the absence of a duly passed company resolution. It contended that Gregory Kabue lacked authority to contract on behalf of the Defendant without such resolution. In support of that proposition, reliance was placed on St. Thomas Academy Limited –vs- Githumu HCCOMM. NO.14 OF 2019 JUDGMENT - Page 8 of 27 Kangema Limited & Others [2024] KEELC 7025 (KLR), in which the Court emphasised that Directors cannot bind a Company in respect of its property or contractual obligations without the requisite corporate authority. 22. The Defendant contended that the evidence on record demonstrated that the impugned agreement was not authentic. It relied on the testimony of DW2, who stated that she did not witness the agreement dated 21st December 2017 notwithstanding that her name appeared on the execution page. The Defendant submitted that the document bore stamps and endorsements inconsistent with her firm's practice and that the affixed stamp of Kagwe Kamau & Karanja Advocates was never satisfactorily explained by the Plaintiff. On that basis, the Defendant maintained that the agreement was a forgery and therefore incapable of creating any enforceable contractual obligations. It accordingly urged the Court to dismiss the Plaintiff's suit with costs. THE EVIDENCE 23. The matter proceeded to a full hearing. The Plaintiff called two witnesses in support of its case, while the Defendant likewise called two witnesses. 24. PW1, Macharia Kariuki, a Director of the Plaintiff Company, testified that the Plaintiff was engaged to provide cleaning services at Ciata City Mall pursuant to an agreement concluded through Ben the Agent Consultancy Limited. He stated that the Plaintiff performed the agreed services for approximately one year and four months and HCCOMM. NO.14 OF 2019 JUDGMENT - Page 9 of 27 received payments amounting to Kshs.8,811,200. He further testified that towards the end of March 2019, a director of the Defendant informed him that the Plaintiff's services were no longer required. According to PW1, the Agreement only permitted disengagement where corporate tenants lodged affidavits complaining of deficiencies in workplace housekeeping and cleanliness, a circumstance which, according to him, never arose. He therefore maintained that the Defendant terminated the contract and declined to pay the balance allegedly due under the agreement. 25. During cross-examination, PW1 acknowledged that the Agreement identified Ben the Agent Consultancy Limited as the Defendant's letting agent. He also conceded that the agreement did not expressly provide that the letting agent had authority to procure cleaning services on behalf of the Defendant. 26. PW2, Benson Wambura Mathenge, the proprietor of Ben the Agent Consultancy Limited, testified that between 2015 and 2019 his firm acted as the Defendant's letting agent for Ciata City Mall. He stated that Gregory Kabue, whom he identified as a director of the Defendant, approached him with a proposal to establish a cleaning company known as Ciata City Mall Cleaners. According to PW2, that company provided cleaning services at the mall between 2015 and 2018, after which its cleaning contract was sold to the Plaintiff for Kshs.23,000,000. He testified that the purchase price was paid into his account rather than that of Ciata City Mall Cleaners because the company's account was not operational at the time. He further stated HCCOMM. NO.14 OF 2019 JUDGMENT - Page 10 of 27 that he subsequently utilised the proceeds to purchase a house in Runda Paradise. 27. PW2 further testified that the Plaintiff acquired the cleaning contract and that the parties thereafter executed the agreement dated 21st December 2017, which he stated was witnessed by C.N. Karanja & Associates Advocates. According to him, the agreed consideration for the cleaning services was Kshs.940,000 per month, payable quarterly upon performance of the services. He further testified that the Defendant subsequently terminated the Plaintiff's contract. 28. PW2 also informed the Court that there were ongoing arbitral proceedings involving the Defendant, Ben the Agent Investment and NIC Bank concerning the sum of Kshs.20,000,000 paid to Ben the Agent Consultancy Limited, and stated that the matter was pending before the High Court. During cross-examination, he acknowledged having been charged in Criminal Case No.2152 of 2019 with the offence of stealing by agent. He further admitted that he was convicted in that matter for issuing bad cheques to Ultimate Concepts Limited. 29. DW1, Mary Christine Wanja Karanja, a Director of the Defendant Company, testified that in or about April 2019 she discovered that rental income from the mall was not being deposited into the Defendant's account. Upon making inquiries, she established that the rent was instead being deposited into an account operated by Ben the Agent Consultancy Limited. She stated that Ben the Agent Consultancy Limited had only been appointed as a letting agent and had no authority to enter into contracts on behalf of the Defendant or HCCOMM. NO.14 OF 2019 JUDGMENT - Page 11 of 27 to engage service providers. It was therefore her testimony that no contractual relationship existed between the Defendant and the Plaintiff capable of giving rise to a claim for breach of contract. She further testified that in January 2018 the cleaning services at the mall were undertaken by the Defendant's own personnel and that she was unaware that the Plaintiff was paying the cleaners. 30. DW2, Catherine Karanja, an Advocate practising in the Firm of C.N. Karanja & Associates, testified regarding the agreement dated 21st December 2017, which purported to bear her name as the attesting advocate. Upon examining the document, she observed that although her name appeared on the execution page, neither her signature nor her firm's stamp appeared thereon. She further testified that the stamp of Kagwe Kamau & Karanja Advocates had been affixed adjacent to her firm's name, thereby creating the impression that the document had been witnessed by her firm. It was her evidence that she neither witnessed nor attested the execution of the agreement. ANALYSIS AND DETERMINATION 31. I have carefully considered the pleadings, the evidence adduced by the parties, the documentary exhibits produced at the trial, and the rival written submissions. In my view, the issues falling for determination are as follows:- i. Whether the Plaintiff proved the existence of a valid and enforceable contract between itself and the Defendant, including whether Ben the Agent Consultancy Limited had authority to bind the Defendant. HCCOMM. NO.14 OF 2019 JUDGMENT - Page 12 of 27 ii. Whether the Defendant breached the agreement by terminating the Plaintiff's engagement. iii. Whether the Plaintiff is entitled to the reliefs sought in the Plaint. iv. Who should bear the costs of the suit. Whether the Plaintiff proved the existence of a valid and enforceable contract between itself and the Defendant, including whether Ben the Agent Consultancy Limited had authority to bind the Defendant. 32. The starting point in determining whether the Plaintiff's claim is sustainable is whether there existed a valid and enforceable contract between the parties. It is trite that a contract is founded upon the essential elements of offer, acceptance and consideration. In William Muthee Muthami –vs- Bank of Baroda [2014] eKLR, the Court of Appeal stated:- “In the law of contract, the aggrieved party to an agreement must, in addition, prove that there was offer, acceptance and consideration. It is only when those three elements are available that an innocent party can bring a claim against the party in breach.” 33. Similarly, in Charles Mwirigi Miriti –vs-Thananga Tea Growers Sacco Ltd & Another [2014] eKLR, the Court reiterated that the essential elements of a valid contract are offer, acceptance and consideration. HCCOMM. NO.14 OF 2019 JUDGMENT - Page 13 of 27 34. The Plaintiff's case is that the parties entered into a written Agreement dated 21st December 2017 under which the Plaintiff was engaged to provide cleaning services at Ciata City Mall. The Plaintiff relied on the terms of that agreement, which provided for a contractual period of fifteen (15) years, a monthly consideration of Kshs.940,000 payable quarterly, periodic increments, and provisions governing disengagement and payment upon termination. 35. The Defendant, on the other hand, disputed the validity of the agreement and contended that there was no contractual relationship between itself and the Plaintiff. Its principal argument was that Ben the Agent Consultancy Limited, through whom the Plaintiff alleged it entered into the agreement, had no authority to contract on behalf of the Defendant. The Defendant further challenged the execution and authenticity of the agreement on account of the alleged irregularities relating to signatures, company seals and the attestation by advocates. 36. The evidence before the Court confirms that there was a document dated 21st December 2017 purporting to constitute an agreement between the Plaintiff and the Defendant. The existence of the document, however, is not by itself conclusive of the existence of a binding contract. The Court must examine the circumstances surrounding its execution, the authority of the persons involved, and the conduct of the parties thereafter. 37. The Defendant argued that Gregory Kabue, whom the Plaintiff relied HCCOMM. NO.14 OF 2019 JUDGMENT - Page 14 of 27 upon as a representative of the Defendant, lacked authority to bind the company in the absence of a company resolution. The Plaintiff, in response, relied on the doctrine of indoor management and contended that a third party dealing with a company is entitled to presume that internal company procedures have been complied with. 38. The rule in Royal British Bank –vs- Turquand (1856) 6 E&B 327, commonly referred to as the indoor management rule, has been adopted in Kenyan jurisprudence. In Samuel Mureithi Murioki & Another –vs- Kamahuha Limited [2018] KECA 38 (KLR), the Court of Appeal held:- “Whether a Company has or has not complied with its internal procedures as to execution of contracts is an internal management issue and cannot afford a defence to a third party dealing with the Company.” 39. The Court further affirmed that where a Director acts within his ostensible authority, a Company cannot ordinarily avoid liability by alleging internal irregularities in the manner in which authority was exercised. 40. The principle, however, does not operate as a blanket protection for every transaction entered into in the name of a Company. The protection afforded to third parties is premised upon the existence of a genuine transaction and a representation by the Company upon which the third party reasonably relies. It does not shield transactions founded upon fraud, illegality or circumstances where the third party HCCOMM. NO.14 OF 2019 JUDGMENT - Page 15 of 27 had notice of irregularities affecting the validity of the transaction. 41. In the present matter, the Defendant admitted that Ben the Agent Consultancy Limited was engaged as its letting agent. The Plaintiff relied heavily on this relationship to demonstrate that the agent had authority to facilitate the engagement of service providers. However, PW1 conceded during cross-examination that although the agreement referred to Ben the Agent Consultancy Limited as a letting agent, it did not expressly state that the agent had authority to procure cleaning services on behalf of the Defendant. 42. Further, the Defendant's evidence was that Ben the Agent Consultancy Limited's mandate was restricted to letting services, including identifying and engaging prospective tenants, and did not extend to entering into service contracts on behalf of the Defendant. The letting agreements produced by the Plaintiff were also relied upon by the Defendant to demonstrate that the agent's mandate did not include procurement of cleaning services. 43. Beyond the question of authority, the Court must consider the circumstances surrounding the alleged payment of the Kshs. 23,000,000 contract cost. The Plaintiff pleaded that the agreement required payment of this amount to Ben the Agent Consultancy Limited. PW2 confirmed receiving the funds but acknowledged that the money was paid into his account rather than the account of Ciata City Mall Cleaners or the Defendant. He further testified that he subsequently utilised the proceeds to purchase a house at Runda Paradise. HCCOMM. NO.14 OF 2019 JUDGMENT - Page 16 of 27 44. No evidence was produced demonstrating that the said Kshs. 23,000,000 was ever received by the Defendant Company or applied towards any obligation owed by the Defendant. This aspect of the transaction raises serious questions regarding the nature and purpose of the payment and whether it formed part of a legitimate contractual arrangement between the parties. 45. Courts do not enforce agreements founded upon illegality or permit a party to benefit from its own unlawful conduct. The principle was expressed in Holman –vs- Johnson (1775) 1 Cowp 341, as cited with approval in Ahmednasir Abdikadir & Co Advocates –vs- National Bank of Kenya Limited [2006] KEHC 3261 (KLR), where the Court observed that a party cannot found a claim upon an immoral or illegal act. 46. The Court must, however, distinguish between an illegal contractual term and the entire agreement. The mere presence of an irregular provision does not necessarily invalidate every obligation arising under an agreement unless the illegality goes to the foundation of the transaction or renders the agreement unenforceable. 47. In the present case, the concerns surrounding the Kshs.23,000,000 payment are compounded by the evidence of DW2, Catherine Karanja, who testified that although her name appeared on the execution page of the agreement, she neither signed nor stamped the document. She further testified that the stamp of Kagwe Kamau & HCCOMM. NO.14 OF 2019 JUDGMENT - Page 17 of 27 Karanja Advocates appearing on the agreement was not hers or that of her firm. 48. These circumstances create doubt regarding the authenticity and manner of execution of the agreement. The Plaintiff did not provide evidence satisfactorily explaining the discrepancy between the advocate named as the witness and the stamp appearing on the document. Further, PW2 acknowledged the existence of ongoing proceedings relating to the handling of the funds paid to Ben the Agent Consultancy Limited and also admitted having been convicted in Criminal Case No.2152 of 2019 relating to issuing bad cheques. 49. Having considered the totality of the evidence, the Court finds that although the Plaintiff produced a document purporting to be a contract between the parties, the circumstances surrounding its execution and the payment of the alleged contract cost raise fundamental concerns regarding its validity and enforceability. The agreement was not merely challenged on the basis of internal corporate procedures but on account of the authority of the person acting on behalf of the Defendant, the authenticity of its execution, and the handling of substantial funds allegedly paid pursuant to its terms. 50. In the circumstances, the Plaintiff has not demonstrated, to the required standard, the existence of a valid and enforceable contractual obligation binding the Defendant. Consequently, the claim founded upon the alleged breach of the agreement cannot succeed. HCCOMM. NO.14 OF 2019 JUDGMENT - Page 18 of 27 Whether the Defendant breached the agreement by terminating the Plaintiff's engagement 51. The second issue for determination is whether the Defendant breached the agreement dated 21st December 2017 by terminating the Plaintiff's engagement to provide cleaning services at Ciata City Mall. The resolution of this issue is dependent upon the Court first determining whether the agreement relied upon by the Plaintiff created enforceable contractual obligations binding upon the Defendant. 52. The Plaintiff's case was that the agreement expressly provided for the circumstances under which the cleaning services could be terminated. It contended that disengagement could only occur where corporate tenants lodged affidavits demonstrating dissatisfaction with the quality of the services provided. The Plaintiff maintained that no such complaints were ever made and that the Defendant terminated the agreement in April 2019 without notice and in breach of the contractual terms. 53. The Defendant disputed this position and maintained that there was no contractual relationship between itself and the Plaintiff. It was the Defendant's case that it neither authorised Ben the Agent Consultancy Limited to enter into the agreement nor directly engaged the Plaintiff to provide cleaning services. Consequently, the Defendant argued that there could be no breach of contract arising from the termination of a relationship to which it was not a party. 54. It is a fundamental principle of contract law that obligations and HCCOMM. NO.14 OF 2019 JUDGMENT - Page 19 of 27 liabilities arising from a contract attach to the parties who have entered into that Agreement. A party cannot ordinarily be held liable for breach of contractual obligations unless the existence of a binding agreement and the obligations arising therefrom have first been established. 55. In National Bank of Kenya Ltd –vs- Pipeplastic Samkolit (K) Ltd & Another [2001] eKLR, the Court of Appeal affirmed the principle that parties are bound by the terms of their contract and that courts cannot rewrite contracts for parties. However, that principle operates on the premise that a valid contract exists between the parties sought to be bound. 56. Similarly, in Pius Kimaiyo Langat –vs- Cooperative Bank of Kenya Ltd [2017] eKLR, the Supreme Court reiterated that courts must respect the terms voluntarily agreed upon by parties and cannot impose contractual obligations where none have been established. 57. In the present case, the Plaintiff relies on the disengagement clause contained in the agreement dated 21st December 2017. However, as already discussed, the Plaintiff has not established that Ben the Agent Consultancy Limited possessed authority to bind the Defendant to that agreement, nor has it demonstrated that the Defendant directly assumed the contractual obligations contained therein. 58. The evidence further reveals that the Plaintiff's engagement was conducted primarily through Ben the Agent Consultancy Limited. PW1 testified that the Plaintiff was contracted through the agent, while PW2 HCCOMM. NO.14 OF 2019 JUDGMENT - Page 20 of 27 confirmed that the agreement was prepared and processed through Ben the Agent Consultancy Limited. There was no evidence demonstrating that the Defendant expressly communicated acceptance of the contractual terms relating to termination or the alleged obligation to pay the balance of the fifteen-year term. 59. The Plaintiff relied on the Defendant's acceptance of cleaning services for approximately sixteen (16) months as evidence of a contractual relationship. However, acceptance of services, without more, cannot create a contractual obligation for a term or on conditions that were never expressly accepted by the party alleged to be bound. 60. Even assuming that the Defendant was aware that cleaning services were being undertaken at the Mall, the Plaintiff was required to prove that the Defendant accepted the specific contractual arrangement, including the lengthy contractual term, the disengagement provisions, and the alleged obligation to pay the balance of the contract upon termination. 61. The Court also takes into account the circumstances surrounding the alleged termination. The Plaintiff asserted that termination occurred in April 2019 without complaints from tenants and without compliance with the disengagement provisions. However, the question whether the Defendant complied with the termination clause only arises where the Defendant was contractually bound by that clause. 62. Having found that the Plaintiff has not established the existence of an HCCOMM. NO.14 OF 2019 JUDGMENT - Page 21 of 27 enforceable contractual relationship between itself and the Defendant, it follows that the Plaintiff cannot sustain a claim for breach of contractual termination provisions against the Defendant. 63. Accordingly, the Court finds that the Plaintiff has not proved that the Defendant breached the agreement dated 21st December 2017 by terminating the Plaintiff's engagement. Whether the Plaintiff is entitled to the reliefs sought in the Plaint 64. The final substantive issue for determination is whether the Plaintiff has proved its entitlement to the reliefs sought in the Plaint. The Plaintiff seeks various monetary claims arising from the alleged breach of the agreement dated 21st December 2017, namely accrued unpaid service fees, payment for the unexpired portion of the contractual term, reimbursement of the alleged outstanding cost of the contract, interest and costs. 65. It is trite that he who alleges must prove. Section 107 of the Evidence Act, Cap. 80 Laws of Kenya, places the burden of proof upon the party who desires the Court to give Judgment as to any legal right or liability dependent on the existence of facts which he asserts. The Plaintiff was therefore required to establish, on a balance of probabilities, not only the existence of the alleged contractual obligations but also the loss suffered as a consequence of the Defendant's alleged breach. 66. As already discussed, the Plaintiff's claim is founded upon the alleged agreement dated 21st December 2017. The Plaintiff contended that the HCCOMM. NO.14 OF 2019 JUDGMENT - Page 22 of 27 Defendant was obligated to pay for services rendered, the balance of the fifteen-year contractual period upon disengagement, and the unrecovered cost of the contract. However, the Court has found that the Plaintiff did not establish that Ben the Agent Consultancy Limited had authority to bind the Defendant to the alleged agreement or that the Defendant expressly assumed the obligations contained therein. 67. In the absence of proof of a binding contractual relationship between the Plaintiff and the Defendant, the claims for contractual damages cannot succeed. Contractual remedies are only available where there exists an enforceable agreement and a breach of an obligation arising from that agreement. 68. The Plaintiff specifically claimed Kshs.8,635,200 being the amount alleged to have accrued and remained unpaid for services rendered. While PW1 testified that the Plaintiff provided cleaning services and received payments amounting to Kshs.8,811,200, the Plaintiff did not establish that the Defendant was contractually liable for any outstanding balance. The evidence showed that payments were made through Ben the Agent Consultancy Limited, and no sufficient evidence was produced demonstrating that the Defendant acknowledged or admitted liability for the alleged arrears. 69. The Plaintiff further claimed Kshs.178,825,600 being the amount allegedly payable for the remainder of the fifteen-year term pursuant to the disengagement provisions of the Agreement. This claim is premised entirely upon the enforceability of the alleged termination HCCOMM. NO.14 OF 2019 JUDGMENT - Page 23 of 27 clause. Having found that the Plaintiff did not prove the existence of a binding contractual obligation between itself and the Defendant, the claim for future contractual earnings cannot stand. 70. In addition, the Plaintiff sought Kshs.20,955,556 as the remainder of the cost of the contract. The evidence before Court was that the alleged contract cost of Kshs.23,000,000 was paid to Ben the Agent Consultancy Limited rather than the Defendant. PW2 confirmed receiving the funds and utilising them for his own purposes. The Plaintiff did not demonstrate any legal basis upon which the Defendant could be held liable for reimbursement of sums neither received nor retained by it. 71. The law does not permit a party to recover damages where the alleged loss arises from an arrangement whose enforceability has not been established. In Kenya Industrial Estates Ltd –vs- Lee Enterprises Ltd [2009] eKLR, the Court of Appeal reiterated that damages must flow from a legally recognised cause of action and must be proved by the party alleging entitlement thereto. 72. The Plaintiff also sought interest on the amounts claimed and costs of the suit. Interest and costs are consequential reliefs which follow the success of the substantive claim. In the absence of proof of liability on the part of the Defendant, there is no basis upon which interest or costs can be awarded in favour of the Plaintiff. 73. Having considered the pleadings, evidence and submissions, the Court finds that the Plaintiff has failed to prove its entitlement to the HCCOMM. NO.14 OF 2019 JUDGMENT - Page 24 of 27 reliefs sought. The monetary claims pleaded in the Plaint are founded upon an alleged contractual relationship which the Plaintiff did not establish as binding upon the Defendant. 74. Consequently, the Plaintiff's claim for Kshs.8,635,200, Kshs. 178,825,600, Kshs.20,955,556, interest and costs is without merit and is therefore dismissed. Who should bear the costs of the suit 75. The final issue for determination is the question of costs. The general principle governing the award of costs is set out under Section 27 of the Civil Procedure Act, which provides that costs shall follow the event unless the Court, for good reason, orders otherwise. 76. Costs are awarded at the discretion of the Court, although such discretion must be exercised judiciously and not arbitrarily. The Court is required to consider the circumstances of each case, including the conduct of the parties, the nature of the dispute, and the outcome of the proceedings. 77. In Jasbir Singh Rai & 3 Others -vs- Tarlochan Singh Rai Estate of & 4 Others [2013] eKLR, the Supreme Court held that while costs ordinarily follow the event, the successful party does not have an absolute right to costs, and the Court retains discretion to determine whether costs should be awarded and to whom. 78. In the present matter, the Plaintiff instituted the proceedings seeking contractual damages arising from an alleged Agreement with the HCCOMM. NO.14 OF 2019 JUDGMENT - Page 25 of 27 Defendant. Having considered the pleadings, evidence and submissions, the Court has found that the Plaintiff failed to prove its claim against the Defendant. 79. The Defendant has therefore succeeded in defending the suit. There being no sufficient reason to depart from the general principle that costs follow the event, the Defendant is entitled to the costs of the suit. 80. Accordingly, the Plaintiff shall bear the costs of this suit. CONCLUSION 81. Having considered the pleadings, the evidence tendered by the parties, the documentary exhibits produced before Court, and the submissions made by counsel, the Court is satisfied that the Plaintiff has failed to establish the existence of a valid and enforceable contractual obligation binding upon the Defendant. 82. Although the Plaintiff relied on the agreement dated 21 st December 2017 as the foundation of its claim, it did not sufficiently demonstrate that Ben the Agent Consultancy Limited possessed the requisite authority to bind the Defendant to the alleged agreement. Further, the circumstances surrounding the execution of the agreement and the payment of the alleged contract cost raised substantial concerns as to the enforceability of the transaction. 83. The Plaintiff bore the burden of proving that the Defendant breached a contractual obligation owed to it and that it was entitled to the reliefs HCCOMM. NO.14 OF 2019 JUDGMENT - Page 26 of 27 sought. However, having failed to establish a binding contractual relationship with the Defendant, the claims for accrued contractual sums, future contractual payments, reimbursement of the alleged contract cost, interest and other reliefs cannot be sustained. 84. The Court is therefore unable to grant the remedies sought in the Plaint. The Defendant successfully demonstrated that the Plaintiff's claim was not founded upon an enforceable contractual obligation capable of giving rise to liability against it. 85. In the circumstances, the Plaintiff’s suit is found to be without merit and it is hereby dismissed with costs being awarded to the Defendant. 86. Orders Accordingly. File closed accordingly. DATED, SIGNED, AND DELIVERED IN OPEN COURT ON THIS 22ND DAY OF JULY, 2026. ____________________________________ BAHATI MWAMUYE JUDGE In the Presence Of: Counsel for the Plaintiff – Counsel for the Defendant – Court Assistant - Martin HCCOMM. NO.14 OF 2019 JUDGMENT - Page 27 of 27