https://new.kenyalaw.org/akn/ke/judgment/keet/2026/3

 REPUBLIC OF KENYA IN THE TRIBUNAL OF KENYA AT NAIROBI COUNTY COURT NAME: ENERGY AND PETROLEUM TRIBUNAL CASE NUMBER: EPA/E021/2026 COMPACT INLAND LOGISTICS LTD VS CABINET SECRETARY MINISTRY OF ENERGY AND PETROLEUM AND STATE LAW OFFICE AND 1 OTHERS JUDGMENT 1. Before this Tribunal is a matter lodged by the Appellant, Compact Inland Logistics Limited, challenging the 3rd Respondent’s decision to seal the Appellant’s facilities. The Appellant challenges the 3rd Respondent’s decision to enter the Appellant's premises within the Compact Free Trade Zone/Special Economic Zone and to seal its warehouses on 20th February 2026. The Appellant contends that the impugned enforcement action was undertaken without jurisdiction, was procedurally unfair, and violated the legal framework governing the Special Economic Zones Act. 2. The Appellant consequently seeks the following reliefs. 3. A declaration that the 3rd Respondent has neither the power nor jurisdiction to supervise, police, direct, or in any other manner interfere with the Appellant's business operations within the gazetted Free Trade Zone/Special Economic Zone. 4. A mandatory injunction compelling the 3rd Respondent to forthwith remove its seals and presence from the Appellant's property and premises. 5. A permanent injunction restraining the 3rd Respondent, its servants, agents, or any person acting under its authority or direction from entering, remaining upon, or in any manner interfering with the Appellant's business operations within its premises situated in the Free Trade Zone/Special Economic Zone. 1. An award of lost revenue estimated at KShs. 3,000,000 per day from 20th February 2026 until such time as the Appellant's warehouses are free from the interference of the 3rd Respondent or any person acting under its authority or direction. 2. General damages. 3. Costs of the Appeal. 4. The Appeal principally raises the question whether the 3rd Respondent's statutory regulatory mandate under the Energy Act extends to entities operating within a gazetted Special Economic Zone (“SEZ”) or whether such entities enjoy immunity from the Authority's regulatory oversight by virtue of the Special Economic Zones Act and the East African Community Customs Management Act. Ancillary to that question is whether the enforcement action complained of was lawful, proportionate and undertaken in accordance with the requirements of the Constitution and the applicable statutory framework. 5. The Appellant maintains that its warehouses constitute a customs-protected area situated within a Special Economic Zone and that the 3rd Respondent lacked authority to enter the premises, inspect the goods or seal the warehouses. It further contends that the impugned decision was arbitrary, made without affording it an opportunity to be heard, and occasioned substantial financial loss and damage to its business. 6. The 3rd Respondent opposed the Appeal by filing the Replying Affidavit of Eng. Ignatius Chirchir, the Director of Energy Efficiency at the Energy and Petroleum Regulatory Authority (“EPRA” or “the Authority”), sworn on 8th May 2026. The deponent maintained that the Appeal is based on a misunderstanding of both the law and the facts and urged the Tribunal to dismiss it. 7. The 3rd Respondent averred that EPRA is a statutory body established under the Energy Act and is mandated to regulate the electricity, renewable energy and petroleum sectors throughout Kenya. It stated that its functions include regulating the importation, distribution, storage and sale of regulated electrical appliances and ensuring that only compliant and energy-efficient electrical appliances are imported, distributed and utilised within the country. The Authority further stated that it possesses statutory powers to enter, inspect and investigate premises suspected of contravening the Energy Act or the regulations made thereunder. 1. The deponent deposed that, acting pursuant to the Energy (Appliances' Energy Performance and Labelling) Regulations, EPRA lawfully conducted an inspection at the Appellant's Warehouse No. 11 on 20th February 2026 to verify compliance with the applicable legal standards prescribed by the Kenya Bureau of Standards. During the inspection, the Authority discovered imported regulated electrical appliances that did not comply with the prescribed standards. Consequently, the goods were secured and the warehouse sealed to preserve the non-compliant appliances pending completion of investigations. The Appellant was thereafter notified of the inspection, the reasons for the enforcement action and was required to furnish documentation relating to the importer, import declarations, customs documentation and shipping manifests concerning the affected appliances. 2. The 3rd Respondent further contended that the inspection and enforcement action were lawfully undertaken in exercise of its statutory mandate and that neither the Energy Act, the East African Community Customs Management Act nor the Special Economic Zones Act exempts entities operating within SEZs from compliance with Kenya's energy regulatory framework. It maintained that the Special Economic Zones Act does not create regulatory immunity from domestic legislation relating to public safety and energy regulation. 3. The deponent also averred that prior to the institution of the present Appeal, the Appellant had challenged the same enforcement action before the High Court in Milimani HCCOMM No. E114 of 2026. According to the deponent, the High Court dismissed the suit and expressly held that entities operating within SEZs remain subject to domestic regulatory laws, including the Energy Act, and rejected the contention that such entities are insulated from EPRA's jurisdiction. The 3rd Respondent therefore maintained that the Tribunal, being subordinate to the High Court, could not reach a contrary conclusion on the same issue. 4. The 3rd Respondent further deposed that the Appellant had not denied being in possession of imported regulated electrical appliances that failed to meet the prescribed energy performance standards. It contended that the Appeal merely sought to challenge EPRA's jurisdiction while leaving uncontroverted the findings of non-compliance made during the inspection. 5. Finally, the 3rd Respondent asserted that the enforcement measures undertaken were necessary to safeguard public safety, consumer protection and the integrity of Kenya's energy regulatory framework. It argued that allowing the Appeal would undermine ongoing investigations, weaken regulatory oversight and expose the public to unsafe and substandard electrical appliances. The deponent therefore urged the Tribunal to dismiss the Appeal with costs. # APPELLANT’S SUBMISSIONS 1. The Appellant submits that the Appeal is meritorious and should be allowed on the basis that the 3rd Respondent acted outside its statutory jurisdiction by entering and sealing warehouses situated within a gazetted SEZ. It contends that the warehouses are located within a customs-controlled area established under the Special Economic Zones Act and the East African Community Customs Management Act, and are therefore outside Kenya's customs territory. Consequently, EPRA could only exercise jurisdiction over goods once they had been imported into Kenya's customs territory and not while they remained within the Free Trade Zone. 2. The Appellant further submits that the 3rd Respondent deliberately disobeyed the Tribunal's interim orders directing it to remove the seals from the warehouses. It argues that despite being served with the orders, the 3rd Respondent openly refused to comply and instead sought to challenge the orders before both the Tribunal and the High Court. The Appellant relies on authorities on contempt of court to argue that a contemnor should not be accorded audience until it has purged its contempt and contends that the Respondent's conduct demonstrated deliberate disregard for the rule of law. 3. On the merits, the Appellant submits that the statutory framework governing SEZs places such zones under the exclusive regulatory mandate of the Special Economic Zones Authority (SEZA). It relies on Sections 4(4), 10, 11 and 14 of the Special Economic Zones Act and Section 12 of the East African Community Customs Management Act to argue that SEZs are customs protected areas and that jurisdiction over goods only arises once the goods are released into Kenya's customs territory. The Appellant therefore contends that EPRA's statutory mandate under the Energy Act does not extend to goods that remain within the Free Trade Zone and are intended for export. 4. The Appellant also invokes principles of international law, arguing that SEZs are internationally recognised trade facilitation zones governed by investment treaties and World Trade Organization principles. It submits that extending EPRA's jurisdiction into SEZs would undermine Kenya's obligations under bilateral investment treaties and international trade law. According to the Appellant, the goods found in its warehouse were destined for South Sudan and had not been imported into Kenya, with the result that EPRA lacked jurisdiction over them. 5. The Appellant further argues that the decision to seal the warehouse was reached without affording it an opportunity to be heard, contrary to Articles 47 and 50 of the Constitution and the rules of natural justice. It submits that the enforcement action was arbitrary, procedurally unfair and amounted to an unlawful interference with its property rights under Article 40 of the Constitution. 6. Regarding damages, the Appellant submits that it proved substantial financial loss through affidavits and documentary evidence. It contends that the warehouse remained sealed for fifty-three days, causing special damages amounting to KShs. 182,272,000.55, while the business continued to operate at only 46% of its previous capacity after reopening. It therefore seeks compensation for proven financial losses, future loss of earnings, and damage to its commercial reputation. 7. The Appellant further submits that the conduct of the 3rd Respondent was oppressive, arbitrary and unconstitutional, thereby justifying an award of exemplary and aggravated damages. It relies on authorities including Obongo & Another v Municipal Council of Kisumu, Bank of Baroda v Timwood Products Ltd, and Gitobu Imanyara & Others v Attorney General to argue that punitive damages are appropriate where public authorities act in blatant disregard of constitutional rights and court orders. 8. Finally, the Appellant urges the Tribunal to allow the Appeal and award: 9. Special damages of KShs. 182,272,000.55; 10. KShs. 100,283,991.246 for post-reopening loss of earnings; 11. KShs. 50,000,000 for loss of reputation and goodwill; 12. Kshs. 50,000,000 as exemplary and punitive damages; # RESPONDENT’S SUBMISSIONS 1. The 3rd Respondent submits that the Appeal lacks merit and is founded on the erroneous premise that the Appellant's operations within a Special Economic Zone (SEZ) are exempt from EPRA's regulatory jurisdiction. It contends that the Energy Act confers upon it the statutory mandate to regulate the electricity, renewable energy and petroleum sectors, including the importation, distribution and sale of regulated electrical appliances throughout Kenya. It therefore argues that the inspection and enforcement action undertaken on 20th February 2026 was a lawful exercise of its statutory powers under the Energy Act and the Energy (Appliances' Energy Performance and Labelling) Regulations, 2016. 2. The 3rd Respondent further submits that the Appeal is barred by the doctrine of res judicata. It argues that the legality of its inspection and enforcement action had already been litigated before the High Court in Milimani HCCOMM No. E114 of 2026, involving substantially the same parties and the same subject matter. According to the 3rd Respondent, although the High Court determined the matter on a preliminary objection, it conclusively affirmed that entities operating within SEZs remain subject to domestic regulatory legislation, including the Energy Act. The Tribunal is therefore urged not to reopen issues already conclusively determined by a court of competent jurisdiction. 3. On jurisdiction, the 3rd Respondent submits that neither the Special Economic Zones Act nor the Energy Act excludes EPRA's regulatory powers within SEZs. It argues that the exemptions created under the Special Economic Zones Act are limited principally to taxation, customs and licensing matters and do not extend to public safety regulation or energy efficiency standards. The omission of the Energy Act from the statutory exemptions is said to demonstrate Parliament's intention that EPRA's regulatory mandate continues to apply within SEZs. 4. The 3rd Respondent further contends that its inspection established that the Appellant was in possession of imported electrical appliances that did not comply with the prescribed energy performance standards. Consequently, the decision to secure the goods and seal the warehouse was necessary to prevent distribution of potentially hazardous electrical appliances while investigations were ongoing. It submits that these enforcement measures were directed at protecting consumer safety and ensuring compliance with statutory standards. 5. The 3rd Respondent also argues that its actions were lawful, proportionate and procedurally fair. It submits that after the inspection it afforded the Appellant an opportunity to cooperate by requesting details of the importer, customs documentation, cargo manifests and declarations relating to the affected consignment. Instead of providing the requested information, the Appellant elected to institute legal proceedings. The Authority therefore maintains that the enforcement measures adopted were the least restrictive means necessary to preserve the integrity of the investigations and safeguard the public interest. 6. Further, the 3rd Respondent submits that the Appellant has not challenged the technical finding that the electrical appliances were non-compliant with the applicable energy standards. Rather, the Appellant has confined itself to contesting EPRA's jurisdiction. It argues that, absent evidence demonstrating bias, irrationality or illegality, the Tribunal ought to accord deference to the technical determinations of a specialised statutory regulator possessing expertise in energy regulation. 1. Finally, the 3rd Respondent submits that public interest overwhelmingly favors dismissal of the Appeal. It argues that granting the orders sought would undermine EPRA's statutory enforcement mandate, compromise investigations into non-compliant electrical appliances and expose the public to unsafe products. It therefore urges the Tribunal to dismiss the Appeal with costs, uphold the inspection and enforcement measures undertaken on 20th February 2026, and affirm EPRA's regulatory authority over entities operating within SEZs. # ANALYSIS AND DETERMINATION 1. Two principal issues arise upon consideration of the pleadings, evidence and submissions. These are the jurisdictional questions, including res judicata, EPRA's mandate within an SEZ, and whether the reliefs sought are warranted. Having considered the pleadings and the parties' submissions, the Tribunal is of the considered view that the following issues arise for determination: 2. Whether the 3rd Respondent was justified in inspecting and sealing the Appellant's warehouse on 20th February 2026. 3. Whether the Appellant has established a basis for the declaratory, injunctive and monetary reliefs sought in the Appeal. # Whether the 3rd Respondent was justified in inspecting and sealing the Appellant's warehouse on 20th February 2026. 1. The Appellant's primary contention is that by virtue of operating within a gazetted SEZ, the 3rd Respondent lacked jurisdiction to inspect its premises or enforce the provisions of the Energy Act. The Appellant relies on the Special Economic Zones Act and the East African Community Customs Management Act to argue that an SEZ is outside Kenya's customs territory and is subject exclusively to the regulatory oversight of SEZA. 2. The 3rd Respondent, on the other hand, submits that its mandate is expressly conferred by the Energy Act and cannot be curtailed without an express statutory provision. It argues that Sections 10 and 11 of the Energy Act, together with the Energy (Appliances' Energy Performance and Labelling) Regulations, empower it to regulate the importation, distribution, and sale of regulated electrical appliances, to formulate and enforce safety and quality standards, and to inspect any premises suspected of non-compliance. According to the 3rd Respondent, neither the Energy Act nor the Special Economic Zones Act expressly excludes the exercise of those powers within SEZs. It contends that had Parliament intended to create such an exemption, it would have done so in unequivocal terms. 1. Consequently, the 3rd Respondent maintains that entities operating within SEZs remain subject to Kenya's domestic regulatory framework, including the Energy Act, and that its inspection and enforcement action were lawful, proportionate and undertaken in furtherance of its statutory duty to protect consumers from non-compliant electrical appliances. 2. It further relies on the High Court's decision in Milimani HCCOMM No. E114 of 2026, which held that entities operating within SEZs remain subject to domestic regulatory laws, including the Energy Act, and submits that this Tribunal ought not depart from that finding. 3. The Special Economic Zones Act provides for the regulation of entities operating in the SEZs. In addressing this issue, the tribunal must consider whether there are indeed provisions that oust the regulator’s role in the SEZs. A regulator such as EPRA is established under an Act to regulate the energy sector in the country; as such, any ouster of its role must be clearly and unequivocally provided for under an Act of Parliament. It is important to note that Section 3 of the Energy Act, 2019 also provides as follows: If there is a conflict between this Act and any other Act, this Act shall prevail on the following matters— (a)the importation, exportation, generation, transmission, distribution, supply or use of electrical energy; (b)the exploration, production, transportation, distribution, and supply of any other form of energy; and (c)all works and apparatus for any or all of these purposes. 1. The Tribunal has undertaken a purposive reading of the Special Economic Zones Act. This is especially Sections 4, 10, 11, 14 and 25 of the Special Economic Zones Act. Looking at these provisions, it lacks any support for the Appellant's contention that Parliament intended to oust the jurisdiction of statutory regulators such as EPRA. Rather, those provisions establish the institutional framework for the creation, administration and licensing of SEZs, while leaving sector-specific regulation to the statutes establishing the respective regulators. 2. Section 4 merely empowers the Cabinet Secretary, upon the recommendation of the Authority, to declare an area as a Special Economic Zone by Gazette Notice and to define its geographical limits. The provision is administrative in nature. It creates the legal status of an SEZ but does not provide that, once declared, the zone is exempt from the operation of other written laws or from the jurisdiction of statutory regulators. The declaration only brings the area within the framework of the Special Economic Zones Act. 1. Section 10, which establishes SEZA, does not confer exclusive regulatory jurisdiction. The section creates SEZA as the body responsible for implementing the Act. The establishment of a statutory authority cannot, without express words, be interpreted as repealing or limiting the powers conferred upon another statutory body established under a different Act of Parliament. Had Parliament intended SEZA to become the exclusive regulator of all activities undertaken within an SEZ, it would have expressly withdrawn or limited the statutory mandates of regulators such as EPRA, KEBS, NEMA or KRA. No such language appears in the Act. 2. Section 14, which sets out the Authority’s powers, must likewise be read in the context of the Act. The powers conferred are those necessary for administering and enforcing the SEZs regime, including licensing, monitoring compliance with licence conditions, and supervising the operation of SEZs. They are not expressed in exclusive terms and nowhere provide that no other statutory authority may exercise powers conferred upon it by another Act. Section 25 prohibits any person from operating as a special economic zone developer, operator or enterprise without obtaining the requisite licence from the Authority. The licensing requirement regulates the legal entitlement to operate within an SEZ; it does not confer immunity from compliance with other written laws. 3. Accordingly, when Sections 4, 10, 11, 14 and 25 are read holistically and purposively, they establish a regime for the designation, licensing, administration and promotion of SEZs. They do not expressly or by necessary implication oust the jurisdiction of statutory regulators established under other Acts of Parliament. On the contrary, the Act contemplates coexistence between SEZA and other regulatory agencies, with SEZA administering the investment and licensing framework while sector-specific regulators continue to discharge the specialized mandates conferred upon them by their respective statutes. The Tribunal therefore finds no basis in these provisions for concluding that Parliament intended to exclude the jurisdiction of the 3rd Respondent under the Energy Act. 4. The customs and fiscal incentives accorded to SEZs cannot be equated with immunity from statutory regulation, particularly in matters concerning public safety and energy efficiency. Further, Section 3 of the Energy Act expressly provides that the Act prevails in matters relating to the importation, exportation, distribution and use of electrical energy where any inconsistency arises with another statute. The Tribunal therefore finds that the Appellant's argument is without legal foundation. Accordingly, this Tribunal finds that the 3rd Respondent retained its statutory mandate under the Energy Act to regulate, inspect and enforce compliance against the Appellant, notwithstanding that its operations were situated within a gazetted Special Economic Zone. The Appellant's challenge to the jurisdiction of the 3rd Respondent consequently fails. 1. The Appellant further sought a permanent injunction restraining the 3rd Respondent, its servants, agents or any person acting under its authority from entering, remaining upon or in any manner interfering with the Appellant's business operations within the Special Economic Zone. Having found that the 3rd Respondent acted within the statutory mandate conferred upon it by the Energy Act and that its jurisdiction is not ousted by the provisions of the Special Economic Zones Act, the Tribunal finds no legal basis for granting such an order. A permanent injunction cannot issue to restrain a statutory regulator from lawfully discharging the duties and functions expressly conferred upon it by Parliament. To grant the order sought would effectively prevent the 3rd Respondent from carrying out its regulatory mandate in respect of the Appellant, notwithstanding that such mandate has been found to exist. The appropriate remedy lies not in prohibiting the exercise of the statutory power, but in ensuring that the power is exercised lawfully, fairly, proportionately and in compliance with the Constitution and the orders of competent courts and tribunals. Accordingly, the prayer for a permanent injunction is without merit and is hereby declined. # Whether the Appellant has established a basis for the declaratory, injunctive and monetary reliefs sought in the Appeal. 1. Although the Tribunal has rejected the Appellant's contention that the 3rd Respondent lacked jurisdiction to regulate activities within the Special Economic Zone, that finding does not excuse the conduct of the 3rd Respondent in relation to the orders issued by this Tribunal. The record demonstrates that the Tribunal issued interim orders directing the 3rd Respondent to remove the seals placed on the Appellant's warehouse pending the hearing and determination of this matter. Rather than comply with those orders, the 3rd Respondent deliberately elected not to obey them and instead challenged their validity before this Tribunal and subsequently before the High Court. 2. It is a cardinal principle of the administration of justice that every person, whether a private citizen, corporate entity or public authority, is under a duty to obey orders of the Tribunal. Court and Tribunal orders are not issued to be obeyed only where a party agrees with them. Unless varied, stayed or set aside by a court of competent jurisdiction, they remain valid and binding upon all parties. The rule of law demands obedience to judicial and quasi-judicial orders irrespective of a party's perception of their correctness. A public regulatory authority, in particular, bears a heightened obligation to uphold and respect the authority of judicial institutions. The Tribunal therefore finds that the 3rd Respondent's failure to comply with its interim orders was improper and amounted to a clear disregard of the authority of this Tribunal. 1. In the present case, it is common ground that following the issuance of the interim orders by this Tribunal directing the unsealing, the Appellant remained unable to resume its operations because the 3rd Respondent declined to comply with those orders. Consequently, the Appellant's continued inability to conduct its business cannot be attributed solely to the initial enforcement action but was materially occasioned by the 3rd Respondent's refusal to obey the orders of this Tribunal. Had those orders been complied with, the Appellant would have resumed its business operations pending the determination of this matter. 2. The evidence on record demonstrates that despite the issuance of interim orders by this Tribunal directing the removal of the seals, the 3rd Respondent failed to comply. The inevitable consequence of that disobedience was that the Appellant remained unable to fully utilize Warehouse No. 11 and continue its ordinary business operations. It is therefore reasonable to conclude that the continued closure occasioned disruption to the Appellant's commercial activities and resulted in loss beyond what would ordinarily have arisen from the initial regulatory intervention. 3. The Applicants got orders for unsealing on 7th April 2026. After the Respondent failed to comply with the orders, it proceeded to break the seals on the 13th of April 2026 in order to regain access to the warehouse and resume its operations. Having found that the 3rd Respondent acted within its statutory mandate in undertaking the initial inspection and sealing of Warehouse No. 11, the Tribunal would not have awarded damages merely on account of the regulatory action itself. However, the position changed once this Tribunal issued its interim orders. From that point, the 3rd Respondent was under a legal obligation to comply with those orders unless they were stayed, varied or set aside. 4. Its deliberate failure to do so constituted a violation of the authority of this Tribunal and unlawfully prolonged the disruption of the Appellant's business operations. The losses occasioned by that continued closure are therefore attributable not to the lawful exercise of the 3rd Respondent's statutory mandate, but to its defiance of the Tribunal's orders. In the circumstances, the Tribunal finds that the Appellant is entitled to an award of damages arising from the 3rd Respondent's non-compliance with the orders issued on 7th April 2026. The award is therefore made to vindicate the authority of the Tribunal and to compensate the Appellant for the losses occasioned by the unlawful continuation of the sealing after the Tribunal had been directed otherwise. 5. In terms of damages, the Appellants state that they suffered a loss of about 3,000,000 a day and that their loss was Kshs. 182,272,000.55. Its damages are summarized as follows 1. Special damages of KShs. 182,272,000.55; 2. KShs. 100,283,991.246 for post-reopening loss of earnings; 3. KShs. 50,000,000 for loss of reputation and goodwill; 4. KShs. 50,000,000 as exemplary and punitive damages; 5. The Appellant claimed special damages of Kshs. 182, 272,000.55 and Kshs. 100, 283,991. 24. Special damages are subject to a strict, somewhat mathematical rule. The tribunal must identify the pleaded damages and then assess the evidence. They are not based on estimates. The Court of Appeal in Jogoo Kimakia Bus Services Ltd v Electrocom International Ltd [1992] KLR 177 stated that *“The law on damages stipulates various types of damages. The distinction between general and special damages is mainly a matter of pleading and evidence. General damages are awarded in respect of such damages as the law presumes to result from the infringement of a legal right or duty. Damages must be proved but the claimant may not be able to quantify exactly any particular items in it. Special damages are the precise amount of pecuniary loss which the claimant can prove to have followed from the particular facts set out in the pleadings. They must be specifically pleaded.”* 1. In Joseph Kipkorir Rono vs. Kenya Breweries Limited & Another Kericho HCCA No. 45 of 2003, Kimaru, J held that: *“In current usage, special damage or special damages relate to part pecuniary loss calculable at the date of the trial, whilst general damages relate to all other items of damage whether pecuniary or non-pecuniary. If damages are special damages they must be specifically pleaded and proved as required by law. For a loss to be calculable at the date of trial it must be a sum that has actually been spent or loss that has already been incurred…Special damages and general damages are used in corresponding senses.* 1. The Tribunal has carefully considered the documentary evidence produced by the Appellant in support of its claim for special damages. The primary documents relied upon consist of tables setting out the customs value of the imported goods, the alleged sales value of those goods and computations of projected revenue. While those tables may provide an estimate of the potential value of the goods, they do not constitute proof of actual loss suffered by the Appellant. A computation, however elaborate, is not itself evidence of loss. 2. The customs documents produced by the Appellant are equally of limited evidentiary value for purposes of proving special damages. They merely demonstrate the importation of goods, their declared customs value and the duties payable thereon. They do not establish that the Appellant suffered the financial losses claimed as a consequence of the continued sealing of Warehouse No. 11. Customs valuation is intended for revenue assessment and taxation; it is not proof of loss of business, lost profits or loss of income. 3. The Appellant was required to place before the Tribunal cogent evidence demonstrating the actual losses attributable to the period during which the Respondent unlawfully failed to comply with the Tribunal's orders. Such evidence would ordinarily include audited financial statements showing a decline in revenue, bank statements demonstrating lost receipts, purchase orders that could not be fulfilled, cancelled contracts, invoices, sales records, delivery schedules, or other contemporaneous business records capable of linking the alleged losses to the unlawful closure. None of those documents were produced. 4. The Tribunal is therefore unable to ascertain, with the degree of certainty required by law, the actual financial loss suffered by the Appellant. The tables presented merely compare customs values with projected sales values and assume that all imported goods would have been sold at the projected prices. That assumption does not satisfy the strict standard of proof required for special damages. The law requires proof of actual loss, not anticipated or projected earnings. 5. It is trite that special damages must not only be specifically pleaded but also strictly proved. The Tribunal cannot award substantial commercial losses on the basis of estimates, projections or internally generated tables unsupported by primary financial records. To do so would amount to speculation. Accordingly, the Tribunal finds that the Appellant has failed to strictly prove its claim for special damages, and that head of claim is therefore declined. 6. Having found that the Appellant has not strictly proved its claim for special damages, the Tribunal must nevertheless consider whether it is entitled to general damages arising from the 3rd Respondent's continued defiance of the Tribunal's orders. Unlike special damages, general damages need not be specifically quantified or strictly proved. They are awarded at the discretion of the court or tribunal to compensate a party for loss, inconvenience, injury or disruption that naturally flows from the established wrongful conduct. The assessment is not based on mathematical precision but on what is fair, reasonable and proportionate in the circumstances of each case. 7. Although the Appellant has not proved the precise financial losses suffered during that period to warrant an award of special damages, the Tribunal is satisfied that the continued closure of the warehouse caused inconvenience, disrupted business operations and interfered with the Appellant's commercial activities. These injuries naturally flowed from the Respondent's unlawful disregard of the Tribunal's orders and call for compensation by way of general damages. 1. In assessing the appropriate award, the Tribunal has taken into account that the Respondent is a statutory regulator acting in the public interest and that its initial enforcement action was lawful. Equally, the Tribunal cannot overlook the fact that the Respondent, as a public authority, deliberately failed to comply with binding orders of this Tribunal, thereby unnecessarily prolonging the disruption to the Appellant's business. Such conduct undermines the rule of law and public confidence in judicial and quasi-judicial institutions. 2. Balancing these considerations, and exercising its discretion judiciously, the Tribunal is satisfied that an award of general damages is appropriate to compensate the Appellant for the continued business disruption occasioned by the Respondent's unlawful non-compliance with the Tribunal's orders. The award is made not for the lawful exercise of regulatory powers, but for the consequences of the Respondent's continued defiance of the Tribunal's lawful orders. 3. Having carefully considered the evidence on record, the Tribunal is satisfied that the Appellant suffered disruption to its business operations as a direct consequence of the 3rd Respondent's failure to comply with the interim orders of this Tribunal issued on 7th April 2026. General damages are intended to compensate for such loss where the injury is evident but incapable of exact calculation. 4. In assessing the appropriate award, the Tribunal has taken into account the limited documentary evidence produced, the nature and scale of the Appellant's import and distribution business, the period during which the Tribunal's orders remained uncomplied with, and the need to vindicate the rule of law where a public regulator deliberately disregards the lawful orders of a judicial body. In the circumstances, and exercising its discretion judiciously, the Tribunal awards the Appellant general damages of Kenya Shillings Six Million (KShs. 6,000,000) for the business disruption caused by the 3rd Respondent's continued non-compliance. # DISPOSITION 1. In the result, having carefully considered the Appeal, the pleadings, the evidence on record, the written submissions by the parties and the applicable law, the Tribunal makes the following orders: 1. The Appellant's prayer for a declaration that the 3rd Respondent lacks the power or jurisdiction to regulate, inspect or enforce the provisions of the Energy Act within a Special Economic Zone is hereby dismissed. 2. The Appellant's prayer for a mandatory injunction compelling the 3rd Respondent to remove its seals from the Appellant's premises is declined, the same having been overtaken by events. 3. The Appellant's prayer for a permanent injunction restraining the 3rd Respondent from entering, inspecting or regulating the Appellant's premises within the Special Economic Zone is dismissed. 4. The Tribunal finds that the 3rd Respondent unlawfully failed to comply with the interim orders of this Tribunal issued on 7th April 2026, thereby unlawfully prolonging the closure of Warehouse No. 11 and disrupting the Appellant's business operations. 5. The Appellant's claim for special damages, including loss of revenue, loss of earnings and loss of goodwill, is dismissed for want of strict proof. 6. The Appellant's claim for exemplary and punitive damages is declined. 7. The Tribunal awards the Appellant general damages in the sum of Kenya Shillings Six Million (KShs. 6,000,000) for the business disruption occasioned by the 3rd Respondent's continued non-compliance with the Tribunal's orders. 8. The said sum shall attract interest at court rates from the date of this Judgment until payment in full. 9. The Appellant is awarded costs. 10. It is so ordered. Dated and delivered at Nairobi this 9th of July 2026. ……………………..…… Ms. Doris Mwirigi Vice Chairperson ……………………..…… Eng. Buge Hatibu Wasioya Member ……………………..…… Mr. Feisal Shariff Ibrahim Member SIGNED BY/FOR: **★ TH E JUDICIAR Y O F KENY A ★** **HON. DORIS KINYA MWIRIGI BUGE HATIBU WASIOYA FEISAL SHARIFF IBRAHIM** ENERGY AND PETROLEUM TRIBUNAL ENERGY AND PETROLEUM TRIBUNAL Date: 2026-07-10 08:39:23