https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/10151

**REPUBLIC OF KENYA** **IN THE HIGH COURT OF KENYA AT MILIMANI** **CIVIL APPEAL NO. E010 OF 2025** **ARAMEX KENYA LIMITED …………………….……............APPELLANT** **VERSUS** **KAPA OIL REFINERIES LIMITED …………………………RESPONDENT** ***(Being an Appeal from the Judgment of Hon. Muthoni Mwangi (SRM) delivered on 10th December 2024 in Milimani Commercial Civil Suit No. E2965 of 2023)*** **JUDGMENT** **Introduction** 1. This appeal arises from the judgment of the Milimani Commercial Court (***Muthoni Mwangi, SRM***) delivered on 10th December 2024 in Milimani CMCC No. E2965 of 2023. 2. On 7th July 2021, the respondent contracted the appellant to ship, clear, and transport 30 gaskets (‘the consignment’) from API Heat Transfer Limited in Germany to Nairobi. The consignment comprised 29 PCS XY-50039 Gasket Sigma and 1 PC XZ-50039 End Plate Gasket Sigma, valued at €1,066.50 (approximately Kshs. 164,348), as evidenced by invoice no. 102102796. The respondent also obtained insurance cover from Kenindia Assurance Company Limited. 3. The appellant collected the consignment on 2nd August 2021 and issued the respondent with an airway bill no. 1553039176 and a delivery note LS-21-02996. However, on 14th September 2021, the appellant confirmed that they had lost the consignment. 4. Following compensation, Kenindia Assurance Company Limited instituted the suit in the respondent’s name under the principle of subrogation. Relying on the doctrine of *res ipsa loquitur*, the respondent attributed the loss to the appellant’s negligence and breach of contract. In particular, it alleged failure to ensure the safety, proper storage and handling of the consignment, resulting in its loss. Consequently, the respondent claimed special damages of KShs.205,748/=, together with costs and interest thereof. 5. The appellant filed a defence dated 11th August 2023 admitting the contractual relationship but disputing the value of the consignment. It denied liability, the particulars of negligence and the alleged loss (but admitted to the same in its witness statement and submissions). It blamed the respondent for improper valuation and marking of the goods. The appellant further denied knowledge of any insurance cover and challenged the respondent’s locus standi and the court’s jurisdiction. 6. In the alternative, the appellant pleaded that the consignment was valued at €20 and not €1,066.50/=. Further, it was averred that its liability, if any, was in any event capped at US$100/= 7. PW1, **Milka Wanjiru Nyasiye,** a senior associate in the respondent’s imports department, adopted her witness statement dated 6th June 2023 as her evidence-in-chief and produced the list of documents as follows: documents listed 2, 18 and 19 as per the list of documents dated 19th June 2023 as exhibits 1,2,3 and 4 respectively. On cross-examination, she testified that they contracted the appellant to ship, clear and forward the consignment for which an airway bill was issued valuing it at €20/=. However, they were claiming €1,060/= and denied knowledge of a liability clause limiting the appellant’s liability to US$ 20/= or being aware that they were required to lodge a claim within 60 days of being notified of a loss. 8. PW, **Paul Waigangi Njuge**, a cross-adjuster with Maritime Loss Adjusters, produced the Maritime Loss Adjusters Invoice and ETR receipt of Kshs. 20,000/= and loss adjusters report as exhibits 6 and 7. On cross-examination, he maintained that the value of the consignment was determined through a commercial invoice as opposed to an airway bill number which shows that the goods have been dispatched. He also confirmed that he was not aware of the contractual obligations attendant to both parties. 9. PW3, **Faith Mutinda**, a legal claims officer at Kenindia Assurance Company Limited, adopted her witness statement dated 9th July 2024. She produced the list of documents dated 19th June 2023 as follows: those listed as numbers 1-10 as exhibits 8-17, documents 12, 16, 17, 19 and 20 as exhibits 18, 19, 20 and 21, respectively. During cross-examination, she averred that she was not aware of the airway bill, whose conditions, in any event were unclear and the same was not availed to the respondent. Besides, she observed that the appellant’s airway bill number was different from what was provided to the respondent. In any case, it was her case that the plaintiff was not wholly bound by the conditions thereto. On re-examination, she testified that Kenindia Assurance Company Limited relied on the commercial invoice to compensate the respondent. 10. DW2, **Felix Mboya**, the appellant’s account manager, adopted his witness statement dated 9th November 2023 as his evidence-in-chief and produced the documents as per the list of documents dated 9th November 2023, as the appellant’s exhibits. During cross-examination, he testified that the airway bill no. 1553042713 contained the terms and conditions including that it capped their liability at US$20, which was shared with the client. It was his evidence that before raising the airway bill number, the appellant was not privy to the respondent’s consignment value declaration of KShs. 164,348/=, to the insurer. According to him, the respondent shared a receipt indicating that the value of the consignment was €20/=. He also admitted that they declared that they officially declared the consignment lost in September of the same year. 11. By a judgment delivered on 10th December 2024, the trial court delineated 3 issues for determination: *whether there was a binding contract between the respondent and Kenindia Assurance; whether the appellant was liable for the loss and to what extent; and costs*. 12. On the first issue, the trial court determined that there was a valid contract between the respondent and the insurer, Kenindia Assurance Company Limited. The trial Magistrate further observed that the said insurer compensated the respondent for the loss of the consignment and was therefore rightly before the court under the principle of subrogation. 13. As to whether the appellant was liable for the loss and the extent of such liability, it was the trial court’s determination that the liability exclusion clause was oppressive as it sought to limit liability to Kshs. 12,952/= for goods valued at Kshs. 164,348/=. It further found that, as a bailee, the appellant had a contractual duty to ensure safe delivery and could therefore not rely on the limitation clause to evade liability. Accordingly, the appellant was found liable for the loss of the consignment. 14. With respect to the extent of liability, the trial court held that the appellant was wholly liable and allowed the plaint as sought. **The Appeal** 1. Dissatisfied with the trial court’s decision, the appellant filed a Memorandum of Appeal dated 6th January 2025 raising various grounds of appeal which were later condensed to 3 issues: 2. *Whether the trial court erred in law and fact in awarding the respondent a sum exceeding the expressly declared value of €20, contrary to the evidence on record.* 3. *Whether the trial court was justified in rewriting the contract and holding that the exclusion clause was unfair or oppressive.* 4. *Costs of the appeal.* 5. Consequently, the appellant urges this Court to allow the appeal, set aside the award of the trial court and for costs of the appeal. **The Appellants’ Submissions** 1. In support of their appeal, the appellant filed their submissions dated 17th February 2026. The appellant submitted that they issued the respondent with an airway bill no. 1553039176 describing the consignment, value of the same at €20 and weighing 10 kg. Further, the airway bill had terms and conditions, including a liability limitation of US$ 100 and that all claims were to be submitted within 60 days. 2. On the first issue, the appellant submitted that the learned Magistrate erred in imposing liability beyond the declared value of €20. In this regard, they relied on Halsbury’s Laws of England Vol. 4, page 144, para. 387, which stipulates that a carrier is liable for the full value of the parcel if lost if the carrier is informed of its full value. 3. As to whether the trial court rewrote their contract, the appellant argued that whilst the agreement limited liability to US$ 100, the trial court ignored this clause and proceeded to award a figure far beyond the same. In this regard, the appellant faulted the trial Magistrate for relying on ***Explorer Parcel Handlers vs Mukabane (Civil Appeal E068 of 2023) [2024] KEHC 47774 (KLR)*** where the appellant failed to disclose the exclusion clause, quite unlike the appellant’s case. The appellants further urged that the trial court failed to uphold the exclusion clause despite their being a long-recognized and legitimate commercial clause and upheld by the courts. **The Respondent’s Submissions** 1. The respondent filed its submissions dated 27th April 2026 in opposition to the appeal, identifying three issues for determination: *whether the appellant is a common carrier subject to the doctrine of strict liability; whether the trial court was correct in disregarding the unproven limitation of liability clause; and whether the special damages were proved*. 2. On the first issue, the respondent urged that a common carrier of goods, such as the appellant, is an insurer of the goods. In this connection, they cited ***Toyota (Kenya) Limited vs Express (Kenya) Limited [2013] KECA 468 (KLR)*** where the Court of Appeal held that a carrier of goods is liable for any loss or damage that comes to those goods on account of the said carrier’s negligence. They also relied on ***Securicor (K) Limited vs Drapers and Another C.A. No. 67 of 1985*** for the proposition that the carrier is also responsible for the negligent acts of its agents where the loss of the goods can be attributed to the said agent. It was therefore the respondent’s argument that the appellant’s liability commenced the minute they accepted the goods for transport and ended upon safe delivery of the same. 3. In the respondent’s view, the appellant had not brought themselves under the exceptions set out in ***East Africa Industries Ltd. vs B.R. Nyarangi [2009] KECA 446 (KLR)*** to wit: that the loss was solely from an act of God; hostilities involving the State; solely from the consignor’s fault; and the loss arose solely or inherently from or inherent in the goods themselves. 4. With respect to the limitation of liability, the respondent contended that the trial court rightly declined to uphold since there was no consensus ad idem on the same. In their view, the learned Magistrate rightly relied on the ***Explorer Parcel Handlers vs Mukabane Case (Supra)*** adding that this position was also upheld in ***Consolidated Bank of Kenya vs Securicor Security Services Kenya Ltd (2013) KEHC 7014 (KLR)***. 5. With respect to the last issue on special damages, it was the respondent’s case that the same were proven to the required legal standard. Consequently, it was their case that the trial court rightly evaluated the evidence before it and arrived at the right finding. In this regard, they urged this Court to dismiss the appeal with costs. **ANALYSIS AND DETERMINATION** 1. This court has considered the record of appeal, the parties’ respective submissions as well as the cited decisions referred. 2. This being a first appeal, the High Court is under a duty to reconsider and re-evaluate the evidence and draw its own conclusions. The court must take great exception with respect to the fact that it has neither seen nor heard the witnesses. 3. The duty of a first appellate court was reiterated in the case of ***Gitobu Imanyara v Attorney General (2016) eKLR*,** as follows:- ‘*An appeal to this court by way of retrial and the principles upon which this court acts in such an appeal are well settled. The court must reconsider the evidence, evaluate itself and draw its own conclusion, though it should always bear in mind that it has never seen nor heard the witnesses and should make due allowance in this respect’.* 1. In light of the foregoing, this court is not bound by the trial court’s findings of fact if it appears that the trial court has clearly failed on some account of particular circumstances or probabilities materially to estimate the evidence. 2. In light of the pleadings and the submissions made, this court has come up with the following issues for determination. 3. *Whether the trial court erred in law and fact in awarding the respondent a sum exceeding the expressly declared value of €20, contrary to the evidence on record?* 4. *Whether the trial court was justified in rewriting the contract and holding that the exclusion clause was unfair or oppressive.* 5. *Who bears the cost of the appeal?* 6. On the first issue, the appellant submitted that the learned Magistrate erred in imposing liability beyond the declared value of €20. The appellant reiterated that a carrier is liable for the full value of the parcel if lost if the carrier is informed of its full value. 7. The respondent submitted that the appellant as a common carrier of goods, is subject to the doctrine of strict liability and is responsible for any loss suffered. 8. It was the appellant’s submission that their liability was limited and the court misdirected itself by awarding more than what came out of the evidence presented in court. 9. At this juncture, the court is called upon to determine the extent of liability and the damages payable by the appellant under the doctrine of subrogation. From pages 53-74 of the record of appeal, the receipts of the special damages amounting to Kshs 205,748/= paid by Kenindia Assurance Company Limited to the respondent have been presented. 1. The doctrine of subrogation applies where there is a contract of insurance and the insurer has settled the insured’s claim after the insured risk has taken effect. As such, the insurer is entitled to diminish the loss suffered by its insured by seeking compensation from the party that caused the loss. The doctrine of subrogation provides that the extent of compensation should not be more than what has been paid to the insured. 2. In the matter of ***Mercantile Life & General Assurance Company Limited vs Dilip M Shah (2015) eKLR,*** the court stated that having compensated the insured, the insurer is entitled to take advantage of and enforce any legal and equitable remedies that the insurer has or might have enforced against a party in either contract or tort. 3. As such, based on the evidence on record, there was a contract between the parties herein and the respondent suffered loss as a result of the appellant’s breach. The plaintiff/ respondent was compensated and is therefore entitled to recover the amount compensated. In light of the foregoing, I find that the trial magistrate was right in awarding the amount of compensation, as is the practice in insurance contracts under the principle of subrogation. 4. Furthermore, the damages sought by the respondent at trial were claimed under special damages. It is trite law that special damages must be pleaded and proved with as much particularity as the circumstances permit. 5. In the matter of ***Macharia & Waiguru vs Muranga Municipal Council (2014) eKLR,*** the court held that special damages must be pleaded and proven before they can be awarded. 6. The plaintiff/ respondent presented evidence to prove the special damages sought as outlined in the record of appeal. In light of this, the trial magistrate was right in awarding the damages as sought in the plaint save for the disputed €1066.5, damages that the court will analyse hereunder. 7. The second issue is whether the court was right in rewriting the contract. Courts do not rewrite contracts unless vitiating factors such as fraud, coercion, undue influence and unconscionability are pleaded and proven. 8. In the case of ***National Bank of Kenya Ltd vs Pipellastic Samkolit (K) Ltd (2002) eKLR***, the Court of Appeal held as follows: ‘*A court of law cannot rewrite a contract between parties. The parties are bound by the terms of their contract unless coercion, fraud or undue influence are pleaded and proven. While courts will allow parties to be bound by the terms they create for themselves, courts have a duty to help parties resolve disputes when called upon’*. 1. The appellant argued that whilst the agreement limited liability to US$ 100, the trial court ignored this clause and proceeded to award a figure far beyond the same. 2. With respect to the limitation of liability clause, the respondent contended that the trial court rightly declined to uphold it since there was no consensus *ad idem* on the same. The respondent averred that the value of the property as insured was 1066.50 Euros. On the other hand, the appellant submitted that the value of the property was 20 Euros as declared by the respondent and that this is the only recoverable amount. 3. In the ***George Mitchell vs Finney Lock Seeds Limited (1983) All E.R***, the court held that fundamental breach of contract to obviate injustice which may be caused by a limitation clause, the party relying on the exemption clause may not be permitted to rely on the clause absolving him from liability entirely. 4. As such, it is the duty of the court to apply the test of what is fair or reasonable on the applicability of the limitation clause. 5. In the matter of ***Alisa Craig***, the court held that exemption clauses limiting liability as those opposed to totally excluding liability should be enforced if they are clear and unambiguous. 6. Clause 4 of the Airway bill provides that “GDA’S liability is limited to one hundred dollars or its equivalent per shipment **unless a higher value is declared at the time of the tender or a higher value is paid for as assessed and determined by GDA.”** [Emphasis added]. 7. I find clause 4, the limitation clause very clear and unambiguous. In this case, the respondent was fully aware of the limitation clause and this must be what informed their decision to take additional insurance. In the circumstances, the respondent was therefore not a vulnerable consumer lacking bargaining power. It would be oppressive and unconscionable to award a higher value of the lost property on the basis subrogation with undue regard to a clear, unambiguous limitation clause of the contract between the parties. In the upshot, I find that the trial court erred in law and in fact by not enforcing the limitation clause. 8. This court will further interrogate the limitation clause *vis a vis* the declared value of the consignment in question. The appellant contends that the value of the respondent’s property as outlined in Airway Bill Number 1553039176 was €20. The respondent denied the appellant’s contention and stated that the consignment weighed was valued at €1066.5. 9. The appellant submitted that the respondent undervalued the consignment in the airway bill to avoid shipping costs. It further submitted that the airway bill does not bind the parties but is just a document to show that the consignment was received for transportation. 10. In light of the conflicting value of the subject consignment, the court is called upon to determine whether airway bills are binding upon parties where the insured value is higher than the value in the airway bill. Generally, in value disputes, it is the role of the respondent herein to prove the actual worth of the consignment. 11. It is trite law that the figures outlined in an airway bill are prima facie evidence of the actual value of goods unless the contrary is proven. The respondent averred that the appellant was aware of the €1066.5 and that they had undervalued the consignment to avoid shipping expenses. 12. The respondent does not tender any evidence to prove the allegation and as such, the appellant’s evidence remains uncontroverted. Moreover, the insured amount does not bind the carrier. 13. **Article 11 of the Warsaw Convention** cited by the High Court in ***Panalpina Airflo DV vs Dave Flora Limited (2021) KEHC 12815 KLR***, provides that the Air Waybill or the receipt of cargo is prima facie case of the evidence of the conclusion of the contract, of the acceptance of the cargo and of the conditions of the carriage mentioned therein. 14. Having the above in mind, I find that the appellant’s claim on the value of consignment as declared by the respondent has been substantiated. It would be oppressive and unconscionable to award a higher value of the lost property based on the insured amount as opposed to the declared value and the limitation clause. In the upshot, I find that the trial court erred by not enforcing the limitation clause. 15. Costs generally follow event unless otherwise judiciously decided at the court’s discretion. 16. In conclusion, I find that the appeal has merit and hereby allow it in the following terms: 17. ***The appeal is allowed.*** 18. ***It is hereby ordered that the limitation clause is enforceable.*** 19. ***The Judgment of Hon. Muthoni Mwangi (SRM) delivered on 10th December 2024 in Milimani Commercial Civil Suit No. E2965 of 2023 is hereby set aside and substituted with an award of USD 100 as per the contract.*** 20. ***The appellant shall have the costs of the appeal.*** 21. It is so ordered. **Dated, Delivered and Signed** at **Nairobi this 9th day of July 2026.** **DAVID MBURU** **JUDGE** **In the presence of:** **Mr. for the Appellant** **Mr. for the Respondent** **Court Assistant**