https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/12542

**REPUBLIC OF KENYA** **IN THE HIGH COURT OF KENYA AT KISUMU** **CIVIL APPEAL NO. E091 OF 2025** **CHESIMARK LIMITED……………………………………………… APPELLANT** **VERSUS** **THE COUNTY GOVERNMENT OF KISUMU….…………….... RESPONDENT** *(Being an appeal from the Judgment and Decree of Hon. G. C. Serem, Resident Magistrate/Adjudicator, delivered on 19TH March 2025 in Kisumu Small Claims Court Claim No. E844 of 2024)* **JUDGMENT** 1. The appellant, CHESIMARK LIMITED, was the claimant in Kisumu Small Claims case no. E844 of 2021. The company was claiming Kshs. 817,208/=described as outstanding balance owing on the strength of the local service order. 2. The claim was dismissed with costs by the adjudicator holding that there was no valid contract between the appellant and the respondent. 3. The appellant being aggrieved filed this appeal listing the following grounds of appeal:- 4. The learned adjudicator erred in law and in fact in finding that there existed no valid contract between the appellant and the respondent capable of being enforced, contrary to the evidence on record. 5. The Learned adjudicator failed to appreciate to give due weight to the fact that a valid Local Service Order (L.S.O) was issued by the respondent to the appellant and that the same formed a binding contract for the execution of works. 6. The learned adjudicator erred by disregarding the Certificate of Practical Completion issued upon execution of the works as per the said LSO, and thereby failed to acknowledge performance of the contract by the appellant. 7. The learned adjudicator misdirected herself in law by placing the onus on the appellant to follow up and ‘regularize’ the change of site, whereas such obligations. If at all it existed, lay squarely on the respondent, who admitted to having directed and placing the appellant on the alternative site on which to carry out work without rectifying the contractual documents. 8. The Learned adjudicator erred by failing to consider the appellant’s submissions in totality, particularly on the issue of the respondent’s implied acceptance of performance and part-payment which affirmed the validity of the contract. 9. The learned adjudicator erred in law and in fact in failing to find that the respondent was enstopped from denying the existence or enforceability of the contract, having benefitted from the work performed and also making part payment under its own directive. 10. The decision of the Learned adjudicator is against the weight of the evidence adduced and has occasioned a miscarriage of justice. 11. The appellant urged this court to allow the appeal, set aside the judgment by the adjudicator and enter judgment its favour with costs. 12. The appeal was canvassed by written submissions. both side have complied. **SUBMISSIONS** 1. The appellant submitted that the issuance of the Local Service Order and Certificate of Practical Completion satisfied the ingredients of a formal contract contrary to the findings of the adjudicator. The case of Pinnacle Projects Limited versus Presbyterian Church of East Africa (2019) eKLR was cited in aid of this proposition. 2. It was for further submitted that the parties were bound by their contract and the adjudicator could not be allowed to re-write it. The now famous case of ***National Bank of Kenya Limited versus Pipeplastic Samkolit K Ltd and Another (2001) eKLR*** was cited. In that case the court held; ‘***a court of law cannot re-write 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. It is not the business of the court to re-write contracts for the parties***.’ 1. The appellants submitted that once the procuring entity took possession of the works and used them practical completion is deemed to have occurred. The case of China Wu YI Co. Limited versus Nairobi City County Government (2020) Eklr was cited. In that case the court said; ‘***Having issued a Certificate of Completion acknowledging that contractor had duly performed the works, the procuring entity was enstopped from denying liability to pay the contract sum. A completion certificate is conclusive evidence of performance and binds the procuring entity to settle the outstanding amounts.’*** 1. The appellant stated that the fact that the certificate of practical completion was unsigned was a technical defect that should be disregarded. 2. On the preliminary objection raised by the respondent under Section 38 of the Small Claims Act the appellant submitted that the only question for determination is whether there is a valid contract. That this was a point of law. That analysis of the facts and the contract was necessary. 3. The respondent’s main submission was that there was no valid contract. That it was found as a fact that the certificate of practical completion was not signed. That the contract or agreement offended the provisions of Public Procurement and Assets Disposal Act. That the duty to comply was on both the procuring entity and the contractor. The respondent relied on the case of ***Royal Media Services versus Independent Electoral & Boundaries Commission & 3 others (2019) KEHC AND 239 (KLR).*** 4. According to the respondents once the site changed then the contract needed to be amended to reflect he new scope of work. That the contract based on violation of the law cannot stand. 5. That the part payment could not regularize an otherwise illegal act. Finally, the respondent submitted in support of their preliminary objection that Section 38 of the Small Claims Act prohibits the High Court from dealing with veracity of the factual findings by the Small Claims Act. The position taken by the respondent is that the appellant is inviting the court to re-evaluate the facts already dealt with by the trial court. 6. Having considered the grounds and the rival submissions I find one overriding issue for determination being whether there was a valid contract between the parties. If so ,whether the same was breached and what remedies are available. 7. Before getting into the merits of the appeal I wish to dispone the preliminary objection raised by the respondents. 8. Through a notice dated 29/10/2025 the respondent stated: - 9. That this Honourable court lacks jurisdiction to hear and determine this appeal since the grounds raised on the memorandum of appeal are not pure points of law contrary to Section 38 of the Small Claims Court Act.’ 10. That the appeal is fatally defective, incompetent, without merit and should be struck out with costs to the respondent. 11. Looking at the objection as a whole I find the second limb with respect misconceived. It is attacking the merits of the appeal. Just to remind ourselves the principles and definition of preliminary objections are now settled. In the time honored case of Mukisa Biscuit Manufacturing Company Limited versus West End Distributors (1969) it was stated that ‘***A preliminary objection consists of a point of law which has been pleaded and which arises by clear implication out of pleadings and which if argued as a preliminary point may dispose of the suit. Examples are an objection to the jurisdiction of the court as a plea of limitation and a submission that the points are bond by contents giving rise to the suit to refer the dispute to arbitration a preliminary objection is in the nature of what used to be a demurrer. It raises a pure point of law which is argued on the assumption that all the facts pleaded by the other side are correct. It cannot be raised if any fact has to be ascertained or if what is sought is the exercise of judicial discretion.’*** 1. The first ground raises the issue of jurisdiction. It is stated that as framed and filed the appeal offends Section 38 of the Small Claims Court. The objection fits the definition in Mukisa case above. It is well taken. 2. As to whether this court has jurisdiction I only wish to refer to the issue for determination. The question is whether there was a valid contract. That was the singular finding of the adjudicator. 3. The question is whether the appeal raises valid question of law as provided under Section 38 (1) of the Small Claims Court Act. The Section provides: - ***’38 Appeals*** 1. ***A person aggrieved by the decision or an order of the court may appeal against that decision and order to the High Court on matters of law.’*** 2. In the case of **JN and 5 others versus Board of Management, St. G. School** **Nairobi and another (2017) eKLR** the court discussed points of law as follows: - ‘… a question of law also known as a point of law is a question that must be answered by applying relevant principles to interpretation of law. Such a question is distinct from a question of fact which must be answered by reference to fact and evidence as well as inferences arising from those facts. Such a question which is distinct from a question of law, which must be answered by applying relevant legal principles. The answer to a question of facts (a finding of fact usually depends on the practical circumstances or fact situation.)’ 1. From what has been distilled from all the grounds listed in question is whether there was a valid contract. That question as to whether the ingredients of the contract where established is for me a question of law. All the other issues raised by the appellant on the findings of act by the adjudicators are not for this court to determine. 2. The provisions of Section 38 cited above are deliberate. The objective was to ensure expedition and finality when it comes to claims falling under the Small Claims Court. It ensures that those small commercial disputes are resolved fast and resources are not tied up in the appellate process. 3. Flowing from my finding above on the key issue for determination in this appeal I find that the court has jurisdiction. The issues before me fall within the strictures of Section 38 (1) of the Act. 4. As noted above grounds numbers 3,4,5,6, and 7 try to impeach findings of facts. They fail the restriction set out under Section 38. 5. The learned adjudicator formed as a fact that the notification of award under Local Service Order was issued to equip Siany Kokuto Water Project. That the appellant went on to equip Obinno. That there was no change of the award. That the certificate of practical completion was not signed. It is on the basis of these findings of facts that the court concluded that there was no contract between the parties. That the agreement if any was illegal. That it could not found a claim based on contract. 6. I have seen the authority of **Royal Media Services versus Independent Electoral and Boundaries Commission and 3 others (2019) eKLR** where the court held: - ***‘45………it is the duty of the contractor as it is of procuring entity to observe the provisions of statute and the regulations thereunder Section 27 imposes an unequivocal responsibility on any contractor, supplier and consultant intending to supply goods or services to a public entity to comply with all the provisions of the Act and the regulations. This duty, in my view, extends to the contractor making due enquiries as to whether the procuring entity has complied with its side of the law and deciding to enter into a contract which is procured in apparent disregard of the law.’*** 1. I am persuaded and I fully agree with this decision by Justice E. Tuiyott. The appellant cannot be heard to say that he was awarded a contract to do one thing by the procuring entity and went on to do perform other tasks and then demand payment as a matter of right. To uphold such agreement is, contrary to submissions by the appellant, what will go against public policy. The failure to comply with Public Procurement and Asset Disposal Act 2015 cannot be wished away as technicalities. I find no reason to fault the findings of the adjudicator and the facts which informed the findings on the points of law. 2. In sum the final orders are that the appeal is one without merits. It is dismissed. 3. The judgment of the Small Claims Court in E844 of 2024 is hereby upheld. 4. Costs will follow the event. In this case they are awarded to the respondent. 5. It is so ordered. **Hon. Alex K. Ithuku** **JUDGE** **24/07/2026** Dated, delivered and signed this 24th day of July 2026 Court Assistant – Anastacia Ms. Kamwaro for the respondent Ms. Odhong for the appellant **Court** Judgment delivered in Virtual Court. **Hon. Alex K. Ithuku** **JUDGE** **24/07/2026**