https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/8306

Anez Catering Company Ltd v Gems National Academy Limited t/a Regis School Runda (Civil Suit E266 of 2021) [2026] KEHC 8306 (KLR) (4 June 2026) (Judgment) Neutral citation: [2026] KEHC 8306 (KLR) Republic of Kenya In the High Court at Kisumu Civil Suit E266 of 2021 JM Omido, J June 4, 2026 Between Anez Catering Company Limited Plaintiff and Gems National Academy Limited t/a Regis School Runda Defendant Judgment A. The Pleadings. 1.A brief history of the matter before the court is that by a plaint dated 28th October, 2021, the Plaintiff, a limited liability company duly incorporated in Kenya, instituted this suit against the Defendant, also a limited liability company operating various educational institutions, including Regis School, Runda 3, arising from a catering services agreement entered into on 4th January, 2021. 2.The Plaintiff avers in the plaint that under the said agreement, it was engaged by the Defendant to provide catering services at the Defendant’s institution, with specific terms governing payment, termination and conduct of the parties. In particular, it is pleaded that the Defendant was obligated under Clause 6 of the agreement to settle all invoices within fifteen (15) days of issuance by direct bank transfer. 3.It is further pleaded that Clause 15 of the agreement provided for termination of the contract either by sixty (60) days’ written notice or at the end of the academic term, whichever was earlier, and also required a thirty (30) days’ notice to cure any breach. Clause 17 further prohibited either party from directly or indirectly soliciting or hiring the other party’s employees during the subsistence of the agreement. 4.The Plaintiff contends that during the course of the contract, it rendered catering services and issued invoices to the Defendant, which the Defendant failed and/or refused to settle despite demand and notification of breach. The Plaintiff avers that the outstanding invoices as at the time of filing suit amounted to Ksh.12,613,050/- and continued to accrue interest. 5.It is further pleaded that on or about 18th October, 2021, the Defendant unlawfully and unilaterally terminated the agreement without issuing the contractual notice required under Clause 15, and further locked the Plaintiff out of its premises, thereby denying it access to its equipment and operations. 6.The Plaintiff further pleads that the termination was motivated by its demand for payment of outstanding invoices, and that the Defendant has since engaged some of the Plaintiff’s employees in breach of Clause 17 of the agreement. 7.As a result of the alleged breaches, the Plaintiff claims to have suffered loss and damage, including unpaid invoices, loss of use of its equipment, continued accrual of charges for equipment hire and loss relating to perishable goods allegedly left at the premises, totalling approximately Ksh.24,072,145/-. 8.The Plaintiff therefore seeks various reliefs from the court, including a permanent injunction restraining the Defendant from using its equipment and/or employees, payment of the claimed sum together with interest, a mandatory injunction for the release of its equipment allegedly retained by the Defendant, daily charges for use of equipment, as well as punitive and aggravated damages, costs of the suit and interest. 9.The Plaintiff's claim is resisted and to that end, the Defendant filed an amended defence and counterclaim dated 14th October, 2022, denying each and every material allegation contained in the plaint except where expressly admitted. 10.The Defendant acknowledges the existence of the catering services agreement between the parties but avers that both parties were under a strict obligation to perform their respective duties in accordance with the terms of the contract, given the sensitive nature of catering services within a school environment. 11.The Defendant contends that the Plaintiff failed to perform its contractual obligations properly, alleging that the Plaintiff repeatedly delayed in the provision of meals, thereby disrupting school operations, and further that the food supplied was of poor quality and caused health challenges among students and staff. 12.In response to the Plaintiff’s allegations regarding non-payment, the Defendant avers that any delay in settlement of invoices was occasioned by financial constraints arising during the COVID-19 pandemic, which adversely affected the school’s income. 13.The Defendant further denies the Plaintiff’s allegations relating to wrongful termination and states that it was the Plaintiff who, on the material day, abandoned its duties and failed to provide meals to students and staff, thereby necessitating urgent intervention by the Defendant to avoid disruption of school operations. 14.The Defendant disputes the sum claimed by the Plaintiff and avers that the correct outstanding amount is Ksh.8,934,980/-, with the debt allegedly admitted as Ksh.7,404,050/-, and therefore puts the Plaintiff to strict proof of the alleged sums. 15.The Defendant further states that the Plaintiff’s actions endangered the continued operation of the school and created an imminent crisis, thereby compelling the Defendant to take over catering services in order to safeguard the welfare of students and staff. 16.It is further pleaded that some of the invoices relied upon by the Plaintiff relate to Gems Cambridge International School, which is a separate entity from the Defendant, and therefore those sums are wrongly attributed. 17.The Defendant also avers that efforts were made to resolve the dispute amicably, including attempts to negotiate settlement and even offers to facilitate immediate provision of meals, but the Plaintiff allegedly declined and instead proceeded with litigation. 18.The Defendant contends that despite ongoing partial payments being made in good faith during the pendency of the suit, the Plaintiff instituted proceedings prematurely and in bad faith, with the effect of inflating costs and interest. 19.The Defendant further avers that the dispute ought to have been resolved through arbitration in accordance with Clause 20 of the contract, and therefore raises an objection to the jurisdiction of the court. 20.The Defendant denies that the Plaintiff is entitled to any of the reliefs sought in the plaint and prays that the suit be dismissed with costs. 21.By way of counterclaim, the Defendant reiterates the preceding averments in its defence and claims against the Plaintiff general damages arising from alleged breach of contract, disruption of school operations, exposure of the Defendant to crisis and uncertainty, and the institution of what it terms unnecessary litigation. 22.The Defendant therefore prays for judgement against the Plaintiff for general damages, interest at court rates from the date of filing the defence and counterclaim until payment in full, costs of the suit and counterclaim, and any other or further relief that the court may deem fit to grant. 23.By a notice dated 11th April, 2022, the Plaintiff, pursuant to Order 25 Rule 1 of the Civil Procedure Rules, gave notice of partial withdrawal of its claim. The Plaintiff specifically withdrew the prayer seeking a permanent injunction restraining the Defendant from using the Plaintiff’s equipment and/or employees in the provision of catering services at Regis School, Runda. 24.The Plaintiff further withdrew the claim for payment of Kshs.237,690/- per day being the alleged cost of hire of its equipment for catering services. 25.In addition, the Plaintiff withdrew the prayer for a mandatory injunction compelling the Defendant to release all equipment and/or items of trade allegedly unlawfully held by the Defendant. 26.The Plaintiff also withdrew the claim for punitive and aggravated damages, thereby narrowing the remaining issues in dispute to the other reliefs initially sought in the plaint. B. The Plaintiff’s Case. 27.The Plaintiff called Zena Mutheu Hassan (PW1) as its witness. The witness adopted the contents of her statement dated 28th October, 2021 and confirmed that she is a director of the Plaintiff Company, well acquainted with the facts of the dispute and duly authorised to testify on its behalf. 28.PW1 stated that at the request and instance of the Defendant, the Plaintiff entered into a written agreement dated 4th January, 2021 to provide catering services at Regis School, Runda. She explained that the agreement governed the entire contractual relationship between the parties and set out the respective obligations, including the provision of meals to students and staff of the Defendant’s institution. 29.PW1 told the court that under Clause 6(c) of the Agreement, the Plaintiff charged Ksh.150/- per staff member per day for meals, and Ksh.250/- per student per day, and on average catered for between 90 to 150 staff members and between 850 to 1,200 students daily. She stated that she fully performed her obligations under the contract and regularly raised invoices in accordance with the agreement, which required the Defendant to settle payments within fifteen (15) days of invoicing. 30.She further told the court that she was aware that judgment on admission was entered in the sum of Ksh.8,934,950/- on 19th May, 2023, but confirmed that no payment had been received in respect thereof. She nonetheless maintained her claim for the full outstanding sum of Ksh.12,613,050/-. 31.PW1 also testified that she was claiming additional loss of earnings for the unexpired term of the contract, which she calculated would have amounted to Ksh.14,987,950/-. She explained that had the contract run its full course, she would have earned approximately Ksh.11,309,050/- in further invoices, bringing the total anticipated earnings to Ksh.23,922,900/-, from which she deducted the amount covered by the judgement on admission. 32.The witness further stated that in October, 2021 she was serving approximately 834 students at a rate of Ksh.250/- per student, and 150 staff members at Ksh.150/- per staff member, resulting in a daily revenue of approximately Ksh.231,000/-. She explained that there were about 49 days remaining under the contract period for which she also sought compensation. 33.The witness testified that under Clause 6 of the agreement, the Defendant was under a strict obligation to pay all invoices raised by the Plaintiff within five (5) days of issuance through direct bank transfer into the Plaintiff’s designated account, the details of which were expressly provided in the agreement. She stated that timely payment was fundamental to the performance of the contract. 34.PW1 further stated that Clause 17 of the agreement contained a non-solicitation provision which prohibited both parties from directly or indirectly engaging, hiring, or soliciting each other’s employees during the subsistence of the contract. According to her, this clause was intended to protect the workforce and ensure stability in service delivery. 35.The witness also relied on Clause 15 of the agreement, which provided that termination of the contract could only be effected upon issuance of sixty (60) days’ written notice or at the end of the academic term, whichever was earlier. She further stated that the clause required a thirty (30) days’ notice to cure any alleged breach before termination could lawfully be effected. 36.The witness testified that during the course of performance, the Defendant failed and/or refused to settle invoices issued by the Plaintiff despite repeated demands and notices of breach. She stated that the outstanding amount owed by the Defendant stood at Ksh.12,613,050/-, which continued to accrue interest, and that the Defendant remained in persistent default of its payment obligations. 37.The witness further stated that on or about 18th October, 2021, the Defendant unlawfully and unilaterally terminated the agreement without issuing the contractual notice required under Clause 15. She testified that the Defendant also locked the Plaintiff out of its premises at the school, thereby preventing the Plaintiff from accessing its facilities and continuing performance of its obligations. 38.PW1 added that in her view, the termination was not justified under the terms of the agreement and was instead triggered by the Plaintiff’s insistence on payment of the outstanding invoices. She maintained that the Defendant had no lawful basis to terminate the agreement in the absence of proper notice and in the absence of any breach attributable to the Plaintiff. 39.The witness further testified that following the termination and lockout, the Defendant proceeded to engage some of the Plaintiff’s employees in violation of Clause 17 of the agreement. She stated that this conduct amounted to a breach of contract and interfered with the Plaintiff’s business operations and staffing arrangements. 40.PW1 also stated that the Defendant unlawfully detained the Plaintiff’s equipment and tools of trade, thereby preventing the Plaintiff from utilising them in other business engagements. She further indicated that the reasonable market rate for hiring similar equipment was Ksh.237,690/- per day, which formed part of the Plaintiff’s claim for loss of use. 41.The witness further testified that at the time of the alleged unlawful termination, the Plaintiff had stored perishable goods at the Defendant’s premises valued at approximately Ksh.149,245/-, which she stated subsequently deteriorated and were lost as a result of the lockout. 42.PW1 concluded that the Defendant’s actions caused the Plaintiff significant financial loss, operational disruption, and reputational harm, and that the Plaintiff continued to suffer losses as suppliers were threatening legal action due to unpaid obligations arising from the dispute. 43.She therefore urged the court to grant orders compelling the Defendant to release the Plaintiff’s equipment and restraining the Defendant from further engaging the Plaintiff’s employees in breach of the Agreement, and confirmed that her statement was made in support of the Plaintiff’s case. 44.The witness produced the following documents in support of the Plaintiff’s case: Agreement for provision of services dated 4th January, 2021. Email correspondence between the Plaintiff and the Defendant on outstanding invoices. Copies of invoices. List of the Plaintiff’s employees allegedly engaged by the Defendant. List of the Plaintiff’s equipment allegedly retained by the Defendant. Documents on cost of hire of catering equipment and approximate cost of perishable goods. 45.Upon being cross examined, PW1 told the court that the termination of the agreement occurred on 18th October, 2021, although she stated that she could not precisely recall the date of eviction, noting that a demand letter was later issued on 21st October, 2021. She confirmed that the contract commenced on 3rd January, 2021 and was intended to run for one year, expiring on 4th January, 2022, and therefore asserted that termination occurred approximately three months before the expiry of the contract period. 46.PW1 testified that the Defendant’s obligations were to provide food services at the school and that the eviction of the Plaintiff’s staff took place on 21st October, 2021. She stated that on that date, the Plaintiff’s employees had begun preparing food, but conceded that no meals were ultimately prepared following the eviction. She maintained that her claim for Ksh.12,613,050/- was consistent with the demand letter issued. 47.The witness further told the court that her projected monthly profit was approximately Ksh.1,000,000/-, and confirmed that the Plaintiff did not make any purchases for the school after termination. She stated that the Plaintiff had staff who remained engaged, and continued to incur staff-related costs such as medical and transit insurance, and confirmed that the Plaintiff did not work for the Defendant between October and December, 2021. 48.PW1 admitted that she did not produce documentary proof of payment of staff salaries by the Plaintiff. She acknowledged that the school had admitted owing her approximately Ksh.8,000,000/- but stated that no proposal on mode of payment was agreed, alleging that the Defendant failed to engage her and had locked her out of the premises and her equipment. 49.PW1 further testified that although she was later invited to collect the Plaintiff’s items, she initially faced resistance and ultimately had to obtain a court order and the assistance of police officers before retrieving the equipment. She stated that she eventually collected all the items on 11th November, 2021 after exchange of correspondence via email. 50.PW1 also confirmed that the Plaintiff received partial payments, including Ksh.1,000,000/- on the date of termination and a further Ksh.500,000/- after about four months, and acknowledged that her affidavit indicated total payments of Ksh.1,300,000/-. 51.PW1 further testified that some invoices in the Plaintiff’s bundle of documents were addressed to Regis School while others referred to Gems Cambridge International School, and conceded that invoices relating to Gems Cambridge were not included in the total claim. She stated that the disputed period covered mid-October to December, 2021 and part of January, 2022 although she maintained that she was not working for the school during that period due to termination and eviction. 52.She further confirmed that Clause 20 of the agreement provided for arbitration, but stated that she was not given an opportunity to pursue arbitration before the institution of the suit. 53.On re-examination, PW1 reiterated that the invoices forming the claim were properly addressed to Regis School and confirmed that the total outstanding sum claimed was Ksh.12,613,050/-. She stated that invoices relating to Gems Cambridge were distinct. She also confirmed that the Defendant had made partial payments totalling Ksh.1,300,000/-, which was to be deducted from the sums due. She further relied on Clause 2 of the Agreement confirming a 12-month contractual term and Clause 15 requiring 60 days’ written notice for termination. She maintained that had the contract run its full course, she would have been entitled to the agreed revenue irrespective of whether she physically worked during the remaining period. C. The Defendant’s Case. 54.The Defendant called Terence Ndanyi (DW1) as its witness. The witness adopted the contents of his witness statement dated 14th October, 2022, and gave evidence in support of the Defendant’s case regarding the events surrounding termination of the catering services contract. 55.DW1 testified that on the material day, the situation at the school became urgent as it was already past 8:30 a.m. and students were due for breakfast. He stated that in order to ensure that students and staff did not miss meals, the school was compelled to purchase food items and take over preparation of meals within the school kitchen. 56.He further stated that at that point, the catering company staff were not actively performing their duties, and the school therefore instructed them to vacate the premises while school staff assumed control of the kitchen operations to prepare meals for students and staff. 57.DW1 testified that after the Plaintiff’s staff vacated the premises, some of them later returned and indicated that they were casual employees and expressed willingness to be directly engaged by the school. 58.He further stated that through the Defendant’s advocates, the school subsequently invited the Plaintiff to collect its equipment and other items that had been left at the premises. He also stated that the Defendant extended an invitation for negotiations to settle the outstanding amounts owed, but the Plaintiff allegedly did not respond to these overtures. 59.DW1 concluded that instead of engaging in the proposed settlement discussions or arbitration as provided for under the contract, the Plaintiff proceeded to file the present suit, thereby disregarding the contractual dispute resolution mechanism. 60.When he testified before the court, DW1 stated that in October, 2021 the Defendant was experiencing cash flow challenges and therefore made payments to the Plaintiff in instalments. He stated that on or about 19th October, 2021, following discussions with the Plaintiff’s representative, the Defendant agreed to pay Ksh.1,000,000/-, which was duly paid. He further testified that the following day was a public holiday and the payment may not have immediately reflected, and that by 21st October, 2021, the Plaintiff had ceased providing services, prompting the Defendant to ask the Plaintiff’s staff to leave the premises so that alternative arrangements could be made to feed the students. 61.DW1 stated that at that point, the Defendant owed the Plaintiff approximately Ksh.8,934,980/- and that the Defendant subsequently made further payments amounting to Ksh.1,300,000/- in instalments, including Ksh.300,000/- in November, 2021, Ksh.500,000/- in April 2022 and Ksh.500,000/- in May 2022. He testified that after these payments, the outstanding balance stood at approximately Ksh.7,634,980/-, and maintained that this was the correct amount due as opposed to the higher sums claimed by the Plaintiff. 62.The witness further stated that the contract was due to expire on 3rd January, 2022 and that only about two months remained at the time of the dispute, contending that the Plaintiff was not entitled to claim for the unexpired term. He also testified that services had effectively stopped being provided from around 19th October, 2021, and therefore any claims beyond that period were unjustified. 63.The witness produced the following documents in support of the Defendant’s case: Agreement for provision of services dated 4th January, 2021. Reconciliation statement for services delivered. Bundle of payment deposit slips. Letter dated 25th October, 2021 in response to the Plaintiff’s demand letter. Inventory of items collected by the Plaintiff. Email correspondence on collection of equipment. Registration certificate for Gems National Academy. Registration certificate for Regis School. 64.On cross-examination, DW1 confirmed that he was the Chief Finance Officer of the Defendant and acknowledged the existence of the agreement between the parties, which commenced on 4th January, 2021 for a 12-month term unless extended by mutual consent. He conceded that the contract was not formally extended and that no valid termination letter complying with Clause 15 was issued. He also admitted that the Defendant did not issue the mandatory 60-day termination notice, although he stated that emails and communications were used instead. 65.DW1 further conceded that Clause 6 required invoices to be paid within 15 days, but acknowledged that this was not complied with. He also admitted that the Defendant had no documentary proof supporting its allegations of COVID-19-related financial difficulty beyond his oral testimony. He confirmed receiving multiple emails from the Plaintiff demanding payment and indicating growing arrears, including emails showing outstanding amounts of Ksh.9.9000,000/- and Ksh.9,438,000/- but admitted that no written responses were issued to many of them. 66.The witness further acknowledged that although the Defendant alleged the Plaintiff absconded duty, there was no documentary evidence of such allegation in their records, and that their advocates’ response letter of 25th October, 2021 denied liability but did not properly address termination under the contract. He also admitted that approximately Ksh.4,000,000/- was paid through an objector on behalf of the Defendant, though he could not fully explain the arrangement. 67.DW1 conceded that no formal termination letter was issued under Clause 15 and that there was no written notice excluding the Plaintiff from the remaining contract period. He also acknowledged that the contract was intended to run for 12 months and that about two months remained at the time of the dispute, though he maintained that schools typically close in November and December, which in his view affected performance expectations. 68.On re-examination, DW1 reiterated that schools close in November and December and referred to correspondence suggesting ongoing discussions between the parties. He maintained that the Plaintiff had ceased providing services by 21st October, 2021 in an emergency situation and that payments were made subsequently, including Ksh.300,000/-, Ksh.500,000/- and another Ksh.500,000/-, which he stated were acknowledged by the Plaintiff. 69.The witness further stated that the Plaintiff’s demand for Ksh.12,613,050/- mirrored its invoices and demand letter, although earlier communications reflected lower outstanding figures. He confirmed that the Defendant had admitted owing approximately Ksh.9,934,980/- and maintained that the Plaintiff’s claim for over Ksh.24,000,000/- was exaggerated and without basis. D. The Plaintiff’s Submissions. 70.In the Plaintiff’s submissions, it is contended that the suit arises from a claim for damages for breach of a catering services agreement dated 4th January, 2021 between the Plaintiff and the Defendant for the provision of catering services at Regis School, Runda. 71.The Plaintiff submits that by its statement of claim dated 28th October, 2021, it seeks recovery of Ksh.24,072,145/- together with interest and costs arising from the Defendant’s alleged breach of contract. It is further submitted that by a notice dated 11th April, 2022, the Plaintiff withdrew several reliefs originally sought in the plaint, including prayers for permanent and mandatory injunctions, payment for hire of equipment and punitive and aggravated damages. 72.The Plaintiff notes that the Defendant filed an amended defence and counterclaim dated 14th October, 2022 denying liability and alleging that any delay in payment was occasioned by the COVID-19 pandemic, while also contending that the Plaintiff breached the agreement by failing to provide meals to students and staff. The Plaintiff further points out that on 19th May 2023, the court entered judgement on admission in the sum of Ksh.8,934,980/- together with interest and costs, leaving for determination the balance claim of Ksh.14,987,950/-. 73.It is submitted that pursuant to the agreement dated 4th January 2021, the Plaintiff was engaged by the Defendant to provide catering services for a term of twelve months ending on 4th January, 2022. According to the Plaintiff, the Defendant prematurely terminated the contract on or about 18th October, 2021, approximately three months before expiry. 74.The Plaintiff has framed the issues for determination as being whether the Defendant breached the contract, whether the Defendant was prevented from performing the contract by force majeure, the amount outstanding at the date of termination, whether the Plaintiff is entitled to damages for wasted expenditure amounting to Ksh.11,309,050/- and whether the Defendant is entitled to damages in its counterclaim. 75.On the issue of breach of contract, the Plaintiff submits that the Defendant fundamentally breached clause 6(c) of the agreement which required all invoices to be settled within fifteen days from the invoice date by direct transfer into the Plaintiff’s account. The Plaintiff relies on the testimony of PW1 and invoices appearing at pages 25 to 37 of the Plaintiff’s bundle to demonstrate persistent non-payment by the Defendant. 76.The Plaintiff also relies on a series of emails dated 6th July, 2021, 10th September, 2021 and 18th October, 2021 in which the Plaintiff repeatedly demanded settlement of outstanding invoices and explained that the non-payment was negatively affecting its operations, including payments to suppliers, staff salaries, statutory obligations and servicing of bank loans. 77.The Plaintiff emphasizes that despite the repeated notices, the Defendant neither remedied the breach nor provided any meaningful response. 78.The Plaintiff further submits that clause 15(b) of the agreement entitled the Plaintiff to issue notices requiring the Defendant to cure breaches of contract and that the Plaintiff had duly exercised this right through the emails produced in evidence. It is argued that the Defendant’s conduct of persistently failing to pay invoices within the contractual timelines amounted to a repudiatory breach that went to the root of the contract. The Plaintiff submits that DW1 admitted during cross-examination that invoices were not paid within the stipulated fifteen days and further admitted receiving the Plaintiff’s emails but failed to respond to them. 79.The Plaintiff further contends that the Defendant unlawfully terminated the contract without issuing the mandatory sixty days’ written notice required under clause 15(a) of the agreement. Clause 15(a), according to the Plaintiff, permitted either party to terminate the agreement by giving sixty days’ written notice or at the end of the academic term, whichever came earlier. The Plaintiff submits that PW1’s evidence that the Defendant locked out and evicted the Plaintiff from the premises on 21st October, 2021 without lawful notice remained substantially uncontroverted. The Plaintiff argues that the Defendant’s conduct clearly demonstrated an intention not to perform the contract and therefore amounted to repudiation. 80.The Plaintiff also submits that the Defendant breached clause 17 of the agreement by engaging some of the Plaintiff’s employees after termination of the contract. Clause 17 prohibited either party from directly or indirectly engaging or soliciting employees or agents of the other party during the term of the agreement and for one year after termination without written consent and payment of a fee equivalent to 15% of the annual salary and benefits. The Plaintiff contends that after locking out the Plaintiff, the Defendant unlawfully engaged some of the Plaintiff’s workers in contravention of this clause. 81.On the Defendant’s reliance on force majeure, the Plaintiff submits that clause 16(a) of the agreement expressly excluded obligations “to make payments” from the operation of the force majeure clause. Clause 16(a) provided that a party would not be liable for delay or failure to perform the agreement, other than obligations to make payments, if such failure was caused by force majeure, provided the affected party delivered written notice within fourteen days, supplied material evidence of the event and used best efforts to mitigate the effects of the force majeure event. The Plaintiff argues that since payment obligations were expressly excluded, the Defendant could not rely on COVID-19 or force majeure to excuse non-payment of invoices. 82.In support of the above proposition, the Plaintiff relies on the English decision in Totsa Total Oil Trading SA v New Stream Trading AG [2020] EWHC 855 (Comm) (Commercial Court, QBD, where the court held that a force majeure clause did not excuse a party from its contractual obligation to repay advance payments despite the occurrence of force majeure events. The Plaintiff submits that similarly, the Defendant remained bound to honour its payment obligations notwithstanding any alleged COVID-19 difficulties. 83.The Plaintiff further submits that even if force majeure were available, the Defendant failed to comply with the mandatory requirements of clause 16(a) because it did not issue the required fourteen-day written notice, did not provide evidence of the alleged force majeure event, and did not demonstrate any mitigation measures. The Plaintiff argues that DW1 expressly admitted during cross-examination that no such written notice or supporting documentation was ever issued. The Plaintiff also submits that clause 16(b) required the parties to meet and develop an appropriate remedy if the delay caused by force majeure was expected to last longer than one month, yet the Defendant failed to engage the Plaintiff despite the prolonged delays. 84.The Plaintiff additionally urges the court to take judicial notice that the COVID-19 pandemic had already been declared by the World Health Organization on 11th March, 2020, long before the parties entered into the agreement on 4th January, 2021. The Plaintiff argues that the pandemic was therefore foreseeable at the time of contracting and could not subsequently be relied upon as a force majeure event relieving the Defendant from its obligations. 85.On the issue of outstanding invoices, the Plaintiff submits that PW1 produced invoices demonstrating that as at 21st October, 2021 the Defendant owed Ksh.12,613,050/-. The Plaintiff specifically identifies invoices numbers 3277, 3279, 3333, 3334, 3335, 3383, 3384 and 3385, all addressed to Regis School. The Plaintiff submits that these invoices were not disputed by the Defendant. It is further argued that although the Defendant alleged that some invoices related to Gems Cambridge International School, PW1 clarified during re-examination that the invoices forming part of the claim were addressed to the Defendant and that invoices relating to Gems Cambridge were excluded from the total claim. 86.The Plaintiff further submits that although judgement on admission had been entered for Ksh.8,934,980/-, only Ksh.1,300.000/- had actually been paid to the Plaintiff. It is submitted that the Ksh.4,000,000/- deposited in court pursuant to objection proceedings remained in court and ought to be released to the Plaintiff because the Defendant had admitted the indebtedness. 87.On the claim for damages for wasted expenditure, the Plaintiff submits that the applicable principle in breach of contract claims is that damages should place the innocent party, as nearly as possible, in the same position it would have occupied had the contract been performed. Reliance is placed on the text Chitty on Contracts, 28th Edition, paragraph 27-052, where it is stated that damages are generally assessed at the date of breach, although the court may adopt another date where justice so requires. The Plaintiff argues that although the repudiatory breach occurred on 18th October, 2021, the Plaintiff continued treating the contract as subsisting until actual eviction on 21st October, 2021 when performance became impossible. 88.The Plaintiff submits that because the contract would otherwise have continued until 4th January, 2022, the Plaintiff is entitled to damages representing wasted expenditure and anticipated revenue for the remaining period of the contract amounting to Ksh.11,309,050/-. It is argued that the Plaintiff had incurred substantial expenses in reliance on the Defendant’s performance of the contract, including salaries for employees, insurance costs, servicing of loans and liabilities to suppliers, all of which were rendered futile by the Defendant’s breach. 89.In support of the legal principles governing wasted expenditure, the Plaintiff relies on the decision in Anglia Television Ltd v Reed [1972] 1 QB 60 (Court of Appeal, Civil Division) where Lord Denning held that a claimant may elect to recover either loss of profits or wasted expenditure caused by the Defendant’s breach of contract, including expenditure incurred before the contract if such expenditure was within the contemplation of the parties. The Plaintiff submits that the Defendant must reasonably have contemplated that premature termination of the catering contract would result in wasted expenditure by the Plaintiff. 90.The Plaintiff also relies on CCC Films (London) Ltd v Impact Quadrant Films Ltd [1985] 1 QB 16, where the court held that a Plaintiff has an unfettered choice between claiming loss of profits and wasted expenditure and that the burden lies on the Defendant to prove that such expenditure would not have been recouped had the contract been performed. The Plaintiff argues that the Defendant failed to adduce any evidence showing that the Plaintiff would not have recovered its expenditure had the agreement run to completion. 91.Further reliance is placed on Yam Seng Pte Ltd v International Trade Corporation Ltd [2013] EWHC 111 (QB), where Leggatt J held that where a Defendant’s breach makes it impossible to determine what profits the claimant would have earned, the court is entitled to presume that the claimant would at least have recouped its expenditure unless the Defendant proves otherwise. The Plaintiff submits that the Defendant tendered no evidence to demonstrate that the Plaintiff’s catering venture would have been unprofitable. 92.The Plaintiff additionally cites the decision in Rose Mbula Ojwang t/a Faida 2002 Caterers v Baraka Apparel EPZ (K) Ltd [2007] eKLR, where the High Court held that in cases of unilateral termination of a catering contract, the innocent party is entitled to compensation for the unexpired period of the contract so as to place it in the position it would have occupied had the contract been fully performed. The Plaintiff argues that similarly, it was entitled to compensation for the remaining period of the agreement. 93.The Plaintiff submits that PW1’s evidence established the basis for calculating the claim for Ksh.11,309,050/- by demonstrating that the Plaintiff served approximately 834 students at Ksh.250/- per student per day and approximately 150 staff members at Ksh.150/- per staff member per day, yielding approximately Ksh.231,000/- per day. It is submitted that there remained approximately forty-nine days before expiry of the contract and therefore the Plaintiff would have earned Ksh.11,309,050/- had the contract run to completion. 94.The Plaintiff also addresses the issue of remoteness of damages and relies on the principles in Hadley v Baxendale (1854) 9 Exch 341; 156 ER 145, where the court held that damages recoverable for breach of contract are those arising naturally from the breach or those reasonably contemplated by the parties at the time of contracting. The Plaintiff submits that unpaid invoices and wasted expenditure were foreseeable and directly flowed from the Defendant’s breach, particularly because the Defendant knew that the Plaintiff had obligations to suppliers, employees and lenders. 95.In relation to the Defendant’s counterclaim, the Plaintiff submits that the same is unsustainable because the evidence overwhelmingly demonstrated that it was the Defendant, and not the Plaintiff, who breached the contract. The Plaintiff argues that a party cannot benefit from its own wrongdoing and relies on the decision in Alghussein Establishment v Eton College [1988] 1 WLR 587 (HL), where the court affirmed the principle that a party cannot take advantage of its own wrong. 96.The Plaintiff further submits that the Defendant’s prayer for general damages for breach of contract is legally untenable and relies on the Court of Appeal decision in Kenya Tourist Development Corporation v Sundowner Lodge Ltd [2018] eKLR, where the court held that as a general rule, general damages are not recoverable for breach of contract. The Plaintiff therefore urges the court to dismiss the counterclaim with costs. 97.In conclusion, the Plaintiff urges the court to find that the Defendant breached the agreement by failing to pay invoices and unlawfully terminating the contract without notice; that the outstanding invoices amount to Ksh.12,613,050/-; that the Plaintiff is entitled to Ksh.11,309,050/- as damages for wasted expenditure; and that the Plaintiff should be awarded interest and costs together with release of the Ksh.4,000,000/- deposited in court pursuant to the stay orders issued during the objection proceedings. E. The Defendant’s Submissions. 98.The Defendant, despite being accorded ample and sufficient opportunity by this Court to file and exchange its written submissions, did not place any submissions on record by the time the matter fell for determination. The record demonstrates that directions on filing submissions were duly issued, and the parties were afforded adequate time within which to comply. Notwithstanding those directions, the Defendant elected not to tender any written arguments in support of its defence and counterclaim. 99.In the circumstances, this Court can only infer that the Defendant opted to wholly rely on the pleadings filed, the evidence adduced through its witness and the documents produced during trial. 100.Be that as it may, the failure by the Defendant to file submissions does not automatically determine the suit in favour of the Plaintiff. This Court nevertheless remains under a duty to carefully evaluate the pleadings, the oral and documentary evidence tendered by both parties and the applicable law before arriving at its determination. F. Issues For Determination. 101.Having carefully considered the pleadings filed by the parties, the evidence tendered before this Court, the documentary exhibits produced and the submissions on record, it is my considered view that the following issues arise for determination:-a.Whether this Court has jurisdiction to entertain and determine the present dispute in light of the arbitration clause contained in Clause 20 of the catering services agreement executed between the parties.b.Whether the Defendant was in breach of the catering services agreement dated 4th January, 2021 by failing to settle the Plaintiff’s invoices within the contractual timelines and by terminating the agreement without compliance with the notice provisions stipulated therein.c.Whether the Plaintiff proved, on a balance of probabilities, its entitlement to the sums claimed in the plaint, including the outstanding invoices and the damages sought in respect of the unexpired term of the contract.d.Whether the Defendant established its allegations that the Plaintiff breached the agreement and consequently whether the Defendant has proved its counterclaim against the Plaintiff to the required legal standard.e.What reliefs and orders ought to issue in the circumstances of this case, including the question of costs of the suit and the counterclaim. 102.The first issue for determination is whether this Court has jurisdiction to entertain and determine the present dispute notwithstanding the arbitration clause contained in Clause 20 of the agreement executed between the parties. 103.The Defendant pleaded in its amended defence and counterclaim that the dispute ought to have been referred to arbitration pursuant to Clause 20 of the catering services agreement. The Defendant therefore challenged the jurisdiction of this Court to entertain the dispute. 104.It is not in dispute that the agreement between the parties contained an arbitration clause. However, the existence of such clause does not automatically oust the jurisdiction of the Court. A party seeking to rely on an arbitration agreement must strictly comply with the provisions of Section 6 of the Arbitration Act, No. 4 of 1995. 105.Section 6(1) of the Arbitration Act provides as follows:-“6(1). A court before which proceedings are brought in a matter which is the subject of an arbitration agreement shall, if a party so applies not later than the time when that party enters appearance or otherwise acknowledges the claim against which the stay of proceedings is sought, stay the proceedings and refer the parties to arbitration unless it finds—a.that the arbitration agreement is null and void, inoperative or incapable of being performed; orb.that there is not in fact any dispute between the parties with regard to the matters agreed to be referred to arbitration.” 106.The language employed under Section 6(1) of the Arbitration Act is mandatory. The provision obligates a party wishing to enforce an arbitration clause to file a formal application seeking stay of proceedings and referral of the dispute to arbitration at the earliest opportunity and before taking any substantive step in the proceedings. 107.In the present matter, although the Defendant pleaded the existence of the arbitration clause in its amended defence and counterclaim, the Defendant never filed any application seeking stay of proceedings and referral of the dispute to arbitration as required under Section 6(1) of the Arbitration Act. 108.Instead, the Defendant actively participated in these proceedings by filing a substantive defence and counterclaim, participating in interlocutory applications, complying with pre-trial directions, calling a witness and fully contesting the matter on the merits until close of the hearing. 109.In my considered view, by filing both a defence and counterclaim and by fully participating in the proceedings without seeking stay and referral to arbitration within the statutory timelines, the Defendant unequivocally submitted itself to the jurisdiction of this Court and waived any right it may have had to rely on the arbitration clause. 110.The law on this issue is now settled. In the case of Corporate Insurance Company Limited v Wachira [1995-1998] 1 EA 20, the Court of Appeal held as follows:“If the Appellant wished to take advantage of the arbitration clause, it ought to have applied for stay of proceedings after entering appearance and before delivering any pleadings. By filing a defence the Appellant lost the right to rely on the arbitration clause.” 111.The foregoing decision is directly applicable to the present dispute. The Defendant herein not only filed a defence but also lodged a counterclaim seeking substantive reliefs from this Court. Such conduct constituted a clear acknowledgment of the Court’s jurisdiction. 112.Similarly, in the case of Charles Njogu Lofty v Bedouin Enterprises Limited [2005] eKLR, the Court held that the right to seek referral of a dispute to arbitration is lost once a party takes steps in the proceedings inconsistent with the intention to arbitrate. The Court stated:“Section 6(1) of the Arbitration Act requires a party applying for stay of proceedings to do so at the time of entering appearance or before acknowledging the claim. Once a party files a defence or takes any other step in the proceedings, the right to seek stay is lost.” 113.Further, in Niazsons (K) Limited v China Road & Bridge Corporation Kenya [2001] eKLR, the Court emphasized that a party who participates in court proceedings without promptly invoking the arbitration clause is deemed to have waived the arbitral process. The Court observed that:“A party who wishes to invoke an arbitration clause must do so timeously and before taking any further step in the proceedings. Participation in the suit without applying for stay amounts to submission to the jurisdiction of the court.” 114.The same principle was reiterated by the Court of Appeal in Mt. Kenya University v Step Up Holding (K) Limited [2018] eKLR, where the Court held that filing pleadings and participating in proceedings without seeking stay under Section 6 of the Arbitration Act amounts to waiver of the right to arbitration. 115.In Ventra Locomotives v Kenya Railways Corporation (Civil Suit E009 of 2022) [2025] KEHC 10836 (KLR) (3 July 2025) (Ruling), while addressing Section 6 of the Arbitration Act, I held as follows:“My understanding of the provision above is that where a suit has been filed and a party wishes to invoke an arbitration clause, the application for stay of proceedings must be filed not later than the time of filing the memorandum of appearance.” 116.I also note that the Defendant herein went beyond merely defending the suit and proceeded to file a counterclaim seeking affirmative reliefs including damages, interest and costs. A counterclaim is in itself an invocation of the Court’s adjudicatory jurisdiction and is wholly inconsistent with an intention to insist on arbitration. 117.A party cannot simultaneously seek substantive reliefs from the Court while at the same time contending that the Court lacks jurisdiction by reason of an arbitration clause. Such conduct amounts to approbation and reprobation, which the law does not permit. 118.In the circumstances of this case, I find and hold that the Defendant waived its right, if any, to insist on arbitration by failing to file a timely application for stay of proceedings and referral to arbitration as required under Section 6 of the Arbitration Act and by taking substantive steps in these proceedings, including filing a defence and counterclaim. 119.Accordingly, I find that this Court is properly seized of the dispute and possesses the requisite jurisdiction to hear and determine the suit on its merits. 120.The second issue for determination is whether the Defendant breached the catering services agreement dated 4th January, 2021 by failing to settle the Plaintiff’s invoices within the contractual timelines and by unlawfully terminating the agreement without compliance with the notice provisions stipulated therein. 121.It is common ground that the parties entered into a written catering services agreement dated 4th January, 2021 pursuant to which the Plaintiff was engaged to provide catering services to the Defendant’s institution known as Regis School, Runda. The rights and obligations of the parties were expressly governed by the terms of that agreement. 122.Clause 6 of the agreement imposed a mandatory obligation upon the Defendant to settle invoices raised by the Plaintiff within the stipulated timelines. The clause provided as follows:“6.Payments shall be made by direct bank transfer into the Caterer’s designated account within fifteen (15) days from the date of invoice.” 123.Further, Clause 15 of the agreement regulated termination and provided as follows:“15.Either party may terminate this Agreement by giving sixty (60) days written notice or at the end of the academic term, whichever is earlier.” 124.The agreement further required that where a party was alleged to be in breach, such party was to be afforded a thirty (30) days’ notice within which to remedy the breach before termination could lawfully take effect. 125.The Plaintiff, through the evidence of PW1, demonstrated that it rendered catering services in accordance with the agreement and issued invoices to the Defendant from time to time. PW1 produced invoices and email correspondence evidencing repeated demands for payment of outstanding arrears. The emails dated 6th July, 2021, 10th September, 2021 and 18th October, 2021 clearly show that the Plaintiff persistently notified the Defendant of mounting arrears and the adverse effect the non-payment was having on its operations, suppliers, staff salaries and statutory obligations. 126.The Defendant did not deny receipt of those invoices or demand emails. Indeed, DW1 expressly admitted during cross-examination that Clause 6 obligated the Defendant to settle invoices within fifteen (15) days and further admitted that the Defendant failed to comply with that obligation. He also conceded that numerous emails demanding payment were received from the Plaintiff but that the Defendant failed to respond to many of them. 127.The Defendant sought to justify its failure to pay on the basis of financial difficulties allegedly occasioned by the COVID-19 pandemic. However, no documentary evidence was tendered before this Court to support that allegation. DW1 candidly admitted that the Defendant had no documentary proof demonstrating the alleged financial incapacity caused by COVID-19. Mere allegations unsupported by evidence cannot suffice. 128.In any event, Clause 16(a) of the agreement expressly excluded payment obligations from the ambit of force majeure. The clause provided as follows:“16(a).A party shall not be liable for delay or failure to perform any obligation under this Agreement, other than obligations to make payments, if such delay or failure is caused by force majeure…” 129.The import of the foregoing clause is clear. Even where a force majeure event existed, the Defendant remained contractually bound to honour its payment obligations. Consequently, the Defendant could not lawfully invoke COVID-19 or any alleged financial hardship as a defence to non-payment of invoices. 130.Furthermore, the Defendant failed to comply with the mandatory procedural requirements for invocation of force majeure under the agreement. The agreement required written notice within fourteen (14) days, provision of material evidence of the force majeure event and demonstration of mitigation measures. DW1 admitted during cross-examination that no such notice or supporting documentation was ever issued to the Plaintiff. 131.This Court therefore finds that the Defendant fundamentally breached Clause 6 of the agreement by persistently failing to settle invoices within the contractual timelines despite repeated demands and notices issued by the Plaintiff. 132.The Court further finds that the Defendant terminated the agreement in contravention of Clause 15 thereof. The evidence on record demonstrates that between 18th October, 2021 and 21st October, 2021, the Defendant locked the Plaintiff out of the school premises and prevented it from continuing to provide catering services. PW1 testified that the Plaintiff’s employees had already commenced meal preparations before they were evicted from the premises. That evidence remained largely uncontroverted. 133.Most significantly, DW1 expressly admitted during cross-examination that the Defendant never issued any formal termination notice in compliance with Clause 15 of the agreement. He further conceded that the mandatory sixty (60) days written notice contemplated under the contract was never issued. His explanation was that the parties exchanged emails and communications. However, informal communications cannot substitute a formal termination notice where the contract expressly stipulates the manner in which termination is to occur. 134.The Defendant further alleged that the Plaintiff had abandoned its duties and failed to provide meals to students and staff. However, no documentary evidence whatsoever was produced to substantiate those allegations. DW1 admitted during cross-examination that there existed no written complaints, warning letters, reports, notices or contemporaneous records evidencing that the Plaintiff had absconded duty or failed to perform its obligations. 135.This Court also notes that despite alleging poor performance and operational disruption, the Defendant continued making partial payments towards the admitted debt and expressly acknowledged owing the Plaintiff substantial sums. Indeed, judgement on admission in the sum of Ksh.8,934,980/- was entered against the Defendant on 19th May, 2023. Such admission substantially corroborates the Plaintiff’s position that services had indeed been rendered and remained unpaid. 136.The law is settled that parties are bound by the terms of their contracts and that courts ought not to rewrite contracts freely entered into by parties. In National Bank of Kenya Ltd v Pipeplastic Samkolit (K) Ltd & Another [2001] eKLR, the Court of Appeal held as follows:“A court of law cannot rewrite a contract between the parties. The parties are bound by the terms of their contract unless coercion, fraud or undue influence are pleaded and proved.” 137.Similarly, in Pius Kimaiyo Langat v Co-operative Bank of Kenya Limited [2017] eKLR, the Court of Appeal reiterated the same principle in the following terms:“We are alive to the hallowed legal maxim that it is not the business of courts to rewrite contracts between parties. They are bound by the terms of their contracts unless coercion, fraud or undue influence are pleaded and proved.” 138.The same principle was emphasized by the Court of Appeal in Housing Finance Company of Kenya Ltd v Njuguna [2002] 1 EA 43, where the Court observed that:“Where the parties have expressly agreed the terms of their contract, the court cannot purport to rewrite the agreement for them.” 139.In the present case, the parties expressly agreed on the timelines for payment and the procedure for lawful termination. The Defendant admittedly failed to comply with both obligations. Having voluntarily entered into the agreement, the Defendant was bound by its terms and cannot evade liability arising from its own breach. 140.This Court further finds that the Defendant’s actions in locking out the Plaintiff from the premises without issuance of the requisite notice amounted to repudiatory breach of contract. The Defendant’s conduct clearly demonstrated an intention no longer to be bound by the agreement notwithstanding the unexpired contractual term. 141.The Court is fortified in this conclusion by the decision in Kenya Airways Limited v Satwant Singh Flora [2013] eKLR, where the Court of Appeal held that repudiatory conduct occurs where one party evinces an intention no longer to be bound by the contract, thereby entitling the innocent party to treat the contract as terminated and seek damages. 142.In the premises, this Court finds and holds that the Defendant fundamentally breached the catering services agreement dated 4th January, 2021 by failing to settle the Plaintiff’s invoices within the timelines stipulated under Clause 6 of the agreement; failing to issue the mandatory sixty (60) days written notice required under Clause 15 prior to termination; failing to afford the Plaintiff the contractual thirty (30) days opportunity to remedy any alleged breach; and wrongfully locking the Plaintiff out of the premises and prematurely terminating the agreement without lawful justification. 143.Accordingly, the second issue for determination is answered in the affirmative and in favour of the Plaintiff. 144.The third issue for determination is whether the Plaintiff proved, on a balance of probabilities, its entitlement to the sums claimed in the plaint, including the outstanding invoices and the damages sought in respect of the unexpired term of the contract. 145.It is trite law that he who alleges must prove. Sections 107 and 109 of the Evidence Act, Cap 80 Laws of Kenya place the burden of proof upon the party asserting a fact. Section 107(1) of the Evidence Act provides:“107(1).Whoever desires any court to give judgement as to any legal right or liability dependent on the existence of facts which he asserts must prove that those facts exist.” 146.In civil cases, the standard of proof is on a balance of probabilities. In the case of Palace Investment Ltd v Geoffrey Kariuki Mwenda & Another [2015] eKLR, the Court of Appeal stated:“Denning J, in Miller v Minister of Pensions [1947] 2 All ER 372 discussing the standard of proof had this to say:-‘That degree is well settled. It must carry a reasonable degree of probability... if the evidence is such that the tribunal can say: “we think it more probable than not”, the burden is discharged.’” 147.The Plaintiff’s primary claim relates to unpaid invoices arising from catering services rendered under the agreement dated 4th January, 2021. PW1 produced invoices, demand letters and email correspondence evidencing the outstanding sums due from the Defendant. The invoices produced before Court demonstrated that as at 21st October, 2021, the outstanding amount stood at Ksh.12,613,050/-. 148.The Court notes that the Defendant substantially admitted indebtedness to the Plaintiff. Indeed, judgement on admission was entered by this Court on 19th May, 2023 in the sum of Ksh.8,934,980/-. DW1 expressly acknowledged during his testimony that the Defendant owed the Plaintiff substantial sums and admitted that payments were made in instalments because of cash flow challenges. The Defendant further admitted to making partial payments amounting to Ksh.1,300,000/-. 149.Significantly, the Defendant did not produce any reconciled accounts, payment vouchers, audited statements or documentary evidence disproving the invoices produced by the Plaintiff. Other than generally disputing portions of the claim, the Defendant did not controvert the invoices through cogent evidence. 150.The Court is therefore satisfied that the Plaintiff proved the outstanding invoices on a balance of probabilities. The documentary evidence tendered by the Plaintiff remained substantially unchallenged and was in fact corroborated by the Defendant’s own admissions both in the pleadings and oral testimony. 151.The next question is whether the Plaintiff proved entitlement to damages in respect of the unexpired term of the contract following the Defendant’s termination thereof. The Plaintiff sought compensation for the remaining period of the contract, contending that had the agreement run its full term, it would have earned additional revenue amounting to Ksh.11,309,050/-. 152.The law regarding damages for breach of contract is settled. The general principle is that damages are intended to place the innocent party, so far as money can do so, in the position that party would have occupied had the contract been performed. This principle was affirmed in Kenya Industrial Estates Ltd v Lee Enterprises Ltd [2009] KLR 384, where the Court of Appeal reiterated that the general rule governing assessment of contractual damages is that the aggrieved party should, as nearly as possible, be placed in the same position as if the contract had been performed. 153.Similarly, in Dharamshi v Karsan [1974] EA 41, the East African Court of Appeal held that the measure of damages for breach of contract is to compensate the innocent party for the loss incurred, so as to restore them, as nearly as money can do so, to the position they would have occupied had the contract been properly performed. 154.In the present case, the evidence on record demonstrates that the contract was intended to run for twelve (12) months commencing on 4th January, 2021 and expiring on or about 4th January, 2022. DW1 himself admitted during cross-examination that the contract had not expired at the time the Plaintiff was locked out of the premises and that approximately two months remained. He further admitted that no lawful termination notice was issued under Clause 15 of the agreement. 155.PW1 testified that at the time of termination, the Plaintiff was serving approximately 834 students at Ksh.250/- per student per day and approximately 150 staff members at Ksh.150/- per staff member per day, generating approximately Ksh.231,000/- daily. She further testified that approximately forty-nine (49) days remained under the contract. The Plaintiff therefore computed the anticipated earnings for the unexpired period at Ksh.11,309,050/-. 156.This Court is satisfied that the Plaintiff laid a sufficient evidentiary basis for the claim relating to the unexpired contractual term. The figures relied upon by PW1 were derived directly from the agreed contractual rates and the average number of students and staff served daily. The Defendant did not tender any contrary computation or expert evidence disproving the Plaintiff’s calculations. 157.The Court notes that the Plaintiff herein specifically pleaded the sums claimed and tendered documentary and oral evidence in support thereof. The Court is satisfied that the claim for unpaid invoices was strictly proved through invoices and correspondence produced before Court. 158.With regard to the claim for damages arising from the unexpired term of the contract, this Court notes that damages for loss of bargain or anticipated earnings are recoverable where a party unlawfully terminates a fixed-term contract. In Joseph Ungadi Kedera v Ebby Kangisha Kavai [2015] eKLR, the Court held that the measure of damages for wrongful termination of a fixed term contract is generally the salary or benefits for the remainder of the contract term. 159.The Court addressed the distinction between loss of bargain and loss of anticipated earnings in the context of contractual damages and held, in substance, that loss of bargain refers to the benefit or profit the innocent party expected to obtain from the contract itself had it been properly performed, which is compensatory of the difference between the contractual position and the actual position resulting from breach. While loss of anticipated earnings, on the other hand, is only recoverable if it is pleaded and strictly proved, and it must not be speculative. The Court emphasized that courts will not award damages based on conjecture or uncertain future projections. 160.More specifically, the Court reiterated the orthodox principle that damages for breach of contract are meant to compensate for actual proved loss, and claims for anticipated profits or earnings must be supported by credible evidence demonstrating that the loss was not remote or speculative. 161.Although the foregoing authority arose in an employment context, the underlying principle is equally applicable in commercial contracts for a fixed duration. Where one party unlawfully terminates a fixed-term agreement without lawful justification, the innocent party is entitled to damages representing the benefit expected under the contract subject to proof. 162.The Plaintiff also relied on the decision in Rose Mbula Ojwang t/a Faida 2002 Caterers v Baraka Apparel EPZ (K) Ltd [2015] eKLR, where the High Court awarded damages arising from premature termination of a catering contract. The Court in that case observed that an innocent party is entitled to compensation placing it in the position it would have occupied had the contract not been unlawfully terminated. 163.This Court further notes that the Defendant failed to adduce evidence demonstrating that the Plaintiff would not have earned the projected sums had the agreement run to completion. To the contrary, the evidence shows that the Plaintiff had consistently provided catering services throughout the subsistence of the contract until the unlawful lockout by the Defendant. 164.The Defendant’s argument that schools ordinarily close in November and December does not avail it. First, the parties freely entered into a twelve-month agreement fully aware of the school calendar. Secondly, no contractual provision was cited limiting the Plaintiff’s entitlement on account of school closure periods. Thirdly, the Defendant cannot rely on circumstances of its own making after unlawfully terminating the agreement in breach of Clause 15 thereof. 165.The Court is therefore persuaded that the Plaintiff proved, on a balance of probabilities, its entitlement to compensation arising from the unlawful premature termination of the contract. 166.This Court accordingly finds and holds that the Plaintiff proved entitlement to the outstanding invoices in the sum pleaded and proved, subject to any sums already paid or recovered pursuant to the judgement on admission and damages arising from the unlawful premature termination of the agreement in respect of the unexpired contractual period. 167.The fourth issue for determination is whether the Defendant has established, on a balance of probabilities, that the Plaintiff was in breach of the catering services agreement dated 4th January, 2021, and consequently whether the Defendant has proved its counterclaim against the Plaintiff to the required legal standard. This issue turns on the evidentiary burden placed upon a party who alleges breach of contract and seeks affirmative relief by way of damages. 168.It is a settled principle of law, as I have above stated, that the burden of proof lies upon the party who asserts the existence of a fact. Sections 107, 109 and 112 of the Evidence Act codify this principle. Accordingly, the Defendant, having alleged that the Plaintiff failed to perform its contractual obligations and that such alleged breach occasioned loss and justified a counterclaim, bore the legal burden of proving those assertions on a balance of probabilities. 169.In the present case, the Defendant alleged that the Plaintiff breached the agreement by failing to provide meals, supplying substandard food and abandoning its contractual obligations around 18th to 21st October, 2021, thereby forcing the Defendant to take over catering operations. 170.The Defendant did not produce contemporaneous documentary evidence such as incident reports, complaint registers, health or safety reports, correspondence raising formal complaints prior to termination or records demonstrating systemic failure in service delivery. The allegations of poor performance and abandonment therefore rest primarily on oral testimony, which was not sufficiently corroborated by independent evidence. 171.The Court of Appeal in Kinyanjui Kamau v George Kamau [2015] eKLR held that allegations of serious wrongdoing must be strictly proved and cannot be established by mere assertion or inference. While that case concerned fraud, the principle is equally instructive in contractual disputes where serious allegations are made to justify termination and counterclaims, as such allegations must be supported by clear and credible evidence. 172.On the contrary, the evidence on record shows that the Plaintiff was actively performing its obligations prior to the disputed termination period and was issuing invoices in accordance with the contract. The Defendant, through DW1, made material admissions during cross-examination, including that Clause 6 of the agreement requiring payment within fifteen (15) days was not complied with, and that no formal termination notice under Clause 15 was issued. These admissions significantly weaken the factual foundation of the Defendant’s counterclaim. 173.It is also noteworthy that DW1 conceded that there was no documentary evidence supporting the alleged COVID-19-related financial hardship, nor was there documentary proof of alleged abandonment of duty by the Plaintiff. These gaps in evidence are material, particularly given that the Defendant’s counterclaim is premised on alleged breach and resultant loss. 174.The law is clear that a counterclaim is treated as an independent suit and must be proved with the same standard as a substantive claim. In Independent Electoral and Boundaries Commission & Another v Stephen Mutinda Mule & 3 Others [2014] eKLR, the Court of Appeal emphasized that parties are bound by their pleadings and must prove the same by evidence, and the court can only decide on matters properly proved on the record. Similarly, in Interchemie EA Limited v Nakuru Veterinary Centre Limited [2001] eKLR, the Court of Appeal held that pleadings are not evidence and must be supported by proof. 175.In the present matter, the Defendant’s counterclaim for general damages is not supported by any quantification of loss, documentary proof of expenditure incurred as a result of the alleged breach or evidence establishing a causal link between the Plaintiff’s conduct and any specific financial or operational loss. The claim therefore remains speculative and unproved. 176.The Court further notes that the Defendant’s own evidence reveals admitted non-compliance with contractual obligations, particularly in respect of payment timelines under Clause 6 of the agreement. This admission undermines the Defendant’s attempt to shift blame to the Plaintiff. 177.In light of the foregoing, the Court finds that the Defendant has failed to discharge its burden of proving that the Plaintiff was in breach of the catering services agreement. Consequently, the Defendant has equally failed to prove its counterclaim to the required legal standard. 178.The fifth and final issue for determination is what reliefs and orders ought to issue in the circumstances of this case, including the question of costs of the suit and the counterclaim. This calls for the Court to consider the totality of its findings on liability, the contractual documents, the evidence on record and the applicable legal principles governing remedies for breach of contract. 179.Having found that this Court has jurisdiction to entertain the dispute, that the Defendant was in breach of the catering services agreement by failing to settle invoices within the contractual timelines and by unlawfully terminating the agreement without compliance with Clause 15, that the Plaintiff has proved its entitlement to the sums claimed and that the Defendant’s counterclaim is unproved and fails, it follows that the Plaintiff is the successful party in this suit. 180.On costs, the general rule is that costs follow the event unless the Court for good reason orders otherwise. This principle is codified under Section 27 of the Civil Procedure Act. Costs are in the discretion of the Court but such discretion must be exercised judicially and not arbitrarily, and that the successful party is ordinarily entitled to costs. In the present case, the Plaintiff has substantially succeeded in its claim, while the Defendant’s counterclaim has failed. There are no special circumstances that would justify a departure from the general rule. Accordingly, the Plaintiff is entitled to costs of the suit and of the counterclaim. I. Disposition. 181.The result of all the foregoing is that judgement is entered for the Plaintiff against the Defendant as follows:a.Ksh.12,613,050/- being the outstanding unpaid invoices.b.Ksh.11,309,050/- being damages for the unexpired term of the contract.c.Any amount that may have been paid by the Defendant to the Plaintiff in respect of the agreement during the pendency of this matter shall be deducted.d.Interest on (a) and (b) above at court rates from the date of filing suit until payment in full.e.Costs of the suit and the counterclaim to the are awarded to the Plaintiff. 182.I issue a further order that the Ksh.4,000,000/- deposited in court pursuant to the stay orders issued during the objection proceedings be released to the Plaintiff and applied in partial satisfaction of the decretal sum. 183.This file is hereby closed. DELIVERED (VIRTUALLY) DATED & SIGNED THIS 4TH DAY OF JUNE, 2026.JOE M. OMIDOJUDGEFor The Plaintiff: Ms. Muthoni for Mr. Odera.For The Defendant: Mr. Makokha.Court Assistant: Mr. Ngoge & Mr. Juma.22| Page