https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/12781

**REPUBLIC OF KENYA** **IN THE HIGH COURT OF KENYA AT NAIROBI** **MILIMANI LAW COURTS** **COMMERCIAL & TAX DIVISION** **CIVIL APPEAL NO. E257 OF 2023 & E043 OF 2025 (CONSOLIDATED)** **DIAMOND TRUST BANK KENYA LIMITED …..… 1ST APPELLANT** **AIRTEL NETWORK (KENYA) LIMITED …………. 2nd APPELLANT** **VERSUS** **SAVRAJ SINGH CHANA ………………………….……. 1ST RESPODENT** **(*Being an appeal from the judgment and decree of the Chief Magistrate Court, Honourable C.K Cheptoo delivered on 8th September 2023 in Nairobi MCCC No. E5906 of 2020*)** **JUDGMENT** ***Background*** 1. This judgment concerns two appeals arising from the judgment of the Chief Magistrate's Court in **Nairobi MCCC No. E5906 of 2020, *Savraj Singh Chana v Diamond Trust Bank (Kenya) Limited & Airtel Networks (Kenya) Limited****. The first appeal is* ***Commercial Appeal No. E257 of 2023***, filed by Diamond Trust Bank (Kenya) Limited (hereinafter referred to as the 1st Appellant/the Bank), while the second is **Civil Appeal No. E043 of 2025 (formerly Nairobi HCCA No. E1051 of 2023)**, filed by Airtel Networks (Kenya) Limited (hereinafter referred to as the 2nd Appellant/Airtel). By an order issued on 2nd April, 2025, the two appeals were consolidated, with Commercial Appeal No. E257 of 2023 designated as the lead file. 2. In the trial court, the Plaintiff, Savraj Singh Chana, sued the Bank and Airtel alleging breach of contract and breach of duty arising from unauthorized withdrawals from his bank account. He sought judgment jointly and severally against the Defendants for Kshs. 592,864/=, being the total amount withdrawn, together with interest thereon, damages for breach of contract, general damages for mental anguish and distress, costs of the suit, and any other relief the court deemed fit. 3. Both Defendants filed separate statements of defence denying liability and disputing the allegations contained in the plaint. Upon hearing the matter, the trial court delivered judgment on 8th September, 2023, and entered judgment in favour of the Plaintiff on the following terms: **a) Liability was apportioned at 80:20 against the Defendants and the Plaintiff respectively;** **b) Kshs. 592,864/=, being the amount withdrawn from the Plaintiff's account;** **c) General damages of Kshs. 400,000/= for mental torture and stress caused;** **Total 992, 864/=** **Less 20% 198, 572. 80/=** **TOTAL 794, 291. 20/=** **d) Each Defendant was ordered to pay Kshs. 397,145.60/= together with interest from the date of demand until payment in full; and** **e) Costs of the suit together with interest.** 1. Aggrieved by the decision, both the Bank and Airtel lodged separate appeals. ***1st Appellant /The Bank's Appeal*** 1. The 1st Appellant challenges the judgment on several grounds. In summary, it contends that the trial magistrate erred in law and fact by; finding it negligent when negligence had neither been pleaded nor particularized in the plaint; rewriting the contractual terms between the parties; determining issues that had not been pleaded,; elevating the standard of care owed by the Bank beyond the contractual obligations agreed between the parties; going beyond the pleaded particulars of breach of fiduciary and contractual duties; failing to consider the Respondent’s evidence; ignoring the Plaintiff's admissions that he remained in possession of his mobile handset and had only changed his PIN once; improperly shifting the burden of proof to the Bank; finding that no evidence had been tendered to show that the Plaintiff's PIN was used to authorize the transactions despite evidence to the contrary; and awarding general damages for mental torture and stress notwithstanding that such loss had neither been specifically pleaded nor proved and was not recoverable in a claim founded on breach of contract or breach of fiduciary duty. 2. The 2nd Appellant/Airtel likewise contests the judgment and contends, in summary, that the trial magistrate erred by; assuming jurisdiction over a dispute that ought to have been determined by the Kenya Communications Commission; holding Airtel liable in negligence without identifying the duty of care owed by dormant intermediaries in online transactions; failing to appreciate that the chain of causation was broken after the alleged SIM-swap fraud when the Plaintiff's banking credentials were subsequently compromised; holding the 2nd Appellant liable notwithstanding evidence that it played no role in generating, processing, securing, or managing the PIN used to access the Bank's mobile banking platform; finding the Plaintiff only 20% contributorily negligent despite evidence showing that he was wholly responsible for the loss; and awarding Kshs. 400,000/- in general damages despite absence of proof, legal justification, or reasons supporting the award. 3. Both Appellants urge this Court to allow their respective appeals, set aside the judgment of the trial court in its entirety, and award them the costs of the appeals and the proceedings in the subordinate court. The consolidated appeals were canvassed by way of written submissions. ***The 1st Appellant's Submissions*** 1. The Bank submits that the trial court erred by determining issues that had neither been pleaded nor canvassed by the parties. It argues that the Plaintiff's claim was confined to alleged failures in the management of his account and mobile banking service, yet the trial court-imposed liability on the basis that the Bank ought to have imposed transaction limits on mobile banking withdrawals, thereby re-writing the contractual relationship between the parties. In support of this proposition, reliance was placed on ***Independent Electoral and Boundaries Commission & Another v Stephen Mutinda Mule & 3 Others [2014] eKLR****,* ***Mini Bakeries (Nairobi) Limited v Ramadhan (Appeal E074 of 2024) [2025] KEELRC 578 (KLR)***and***Maithene Malindi Enterprises Ltd v Kaniki Kansa & 2 Others****.* Counsel therefore urged the court to find that the trial court exceeded its jurisdiction by venturing beyond the parties’ pleadings. 2. The Bank further submits that it discharged the duty of care owed to the Respondent as a customer by implementing a PIN-authenticated mobile banking system, maintaining secure procedures for PIN generation and reset, monitoring transactions, and promptly investigating and reporting suspicious activity. It contends that a bank's duty is to exercise reasonable care and skill and not to guarantee absolute protection against fraud. 3. It is the Bank's position that all the impugned transactions were authenticated using the Respondent's correct PIN and registered mobile number, and that there was no evidence of any compromise of its banking systems. The Bank therefore argues that the Respondent failed to prove, on a balance of probabilities, that the loss resulted from any negligence or omission on its part. It further contends that the trial court improperly shifted the burden of proof to the Bank contrary to Sections 107 and 109 of the Evidence Act. 4. The Bank also maintains that the proximate cause of the loss was the admitted irregular SIM swap undertaken through the 2nd Appellant’s network. Consequently, if liability was to arise at all, it should fall upon the 2nd Appellant or alternatively upon the Respondent himself for failing to safeguard his confidential credentials and promptly report the compromise of his mobile line. 5. Finally, the Bank challenges the award of Kshs. 400,000/= as general damages for mental anguish and stress, arguing that the claim was founded on breach of contract and fiduciary duty, in respect of which such damages are not ordinarily recoverable. Counsel relied on ***Gichaba v Lexis Investment Limited (Civil Appeal 131 of 2019) [2024] KEHC 479 (KLR)*** and also cited Halsbury's Laws of England, Fourth Edition Reissue, Volume 12(1), paragraph 941, for the proposition that damages for breach of contract are compensatory and are intended to place the innocent party in the position he would have occupied had the contract been performed. It therefore urges the court to allow the appeal, set aside the judgment of the trial court and dismiss the suit with costs. ***The 2nd Appellant's Submissions*** 1. The 2nd Appellant, Airtel submits that the trial court erred in failing to determine its jurisdictional objection before proceeding with the merits of the dispute. It argues that the question of jurisdiction ought to have been addressed as a preliminary issue and that the failure to do so rendered the proceedings defective. 2. On liability, Airtel contends that it was merely a telecommunications service provider and a dormant intermediary in the online banking transaction. It argues that any duty it owed was limited to its contractual relationship with the subscriber and could not extend to losses arising from the separate banking relationship between the Respondent and the Bank. 3. Airtel further submits that the trial court failed to consider that access to the mobile banking platform depended not only on the SIM card but also on separate banking credentials controlled by the Bank. It contends that even if an irregular SIM swap occurred, the subsequent use of banking credentials constituted an intervening act which broke the chain of causation and absolved it from liability. 4. Airtel additionally argues that the Respondent was wholly responsible for the loss because he either disclosed his security credentials to third parties or failed to safeguard them adequately. Consequently, it contends that the trial court erred in finding him only 20% contributorily negligent. 5. Airtel also challenges the award of Kshs. 400,000/= as general damages for mental torture and stress, arguing that no evidence was tendered to establish psychological injury and that such damages are generally unavailable in claims founded on breach of contract. 6. The 2nd Appellant, therefore urges the court to allow its appeal, set aside the judgment against it, dismiss the suit with costs, and award it the costs of both the appeal and the proceedings before the subordinate court. ***Respondent Submissions*** 1. In support of the trial court’s decision the Respondent submits that the loss of Kshs. 592,864/= was as a result of an admitted irregular SIM swap which enabled unauthorized access to his bank accounts through the Bank's mobile banking platform. 2. He contends that negligence and breach of duty were specifically pleaded in the plaint and the trial court properly considered the issues arising from the pleadings and evidence. That the Appellants suffered no prejudice from the manner in which the pleadings were framed. 3. The Respondent further submits that the banker-customer relationship imposed both contractual and fiduciary duties upon the Bank to protect customer funds and to exercise reasonable care in the processing of transactions. He argues that the trial court did not rewrite the parties' contract but merely enforced those duties. In his view, the transactions displayed sufficient irregularities to warrant intervention by the Appellants and both failed to take adequate measures to prevent the loss. 4. The Respondent also submits that the 2nd Appellant acted as an intermediary through which the mobile banking service was accessed and both Appellants failed to implement adequate safeguards against fraudulent activity. He maintains that the subordinate court properly exercised jurisdiction since the dispute was founded on negligence and breach of duty rather than on matters falling exclusively within the jurisdiction of sector regulators. 5. Regarding the plea of res judicata, the Respondent argues that Petition No. 201 of 2019 concerned access to information and did not determine the issues of negligence or liability arising in the present proceedings. He therefore contends that the suit was not barred by Section 7 of the Civil Procedure Act. 6. The Respondent further submits that there was no evidence that he disclosed his PIN or banking credentials to a third party. Instead, he contends that the evidence demonstrated failures on the part of both Appellants, including the irregular SIM swap, inadequate verification procedures, failure to detect suspicious transactions on time, and insufficient investigations into the fraud. He consequently maintains that the finding on liability was justified. 7. On damages, the Respondent argues that he suffered financial loss and emotional distress occasioned by the depletion of funds that had been saved for his wedding forcing him to borrow money after the loss. He therefore urges the court to uphold both the award of damages and the finding on liability and to dismiss the appeals with costs. ***Analysis and Determination*** 1. This being a first appeal, this Court is guided by the court of appeal decision in ***Selle v Associated Motor Boat Co Ltd & Others [1968] EA 123.*** I have carefully considered the evidence adduced before the trial court in its entirety; the grounds of appeal; the judgment of the learned trial magistrate and the written submissions filed by the parties herein together with all the authorities cited. Having done so, the issues for determination that arise are; 2. **Whether the trial court had jurisdiction to entertain the suit and whether the suit was barred by the doctrine of res judicata.** 3. **Whether the learned trial magistrate erred in finding the Appellants jointly liable for breach of their contractual and fiduciary duties and in negligence.** 4. **Whether the learned trial magistrate properly evaluated the evidence relating to causation, the burden of proof and the Respondent's contributory negligence.** 5. **Whether the award of damages and the consequential reliefs granted by the trial court warrant interference by this Court.** **Whether the trial court had jurisdiction to entertain the suit and whether the suit was barred by the doctrine of res judicata.** 1. The contestation of the trial court’s jurisdiction to entertain the suit is two fold. First, that the suit was barred by the doctrine of res judicata and second that the dispute fell within the statutory dispute resolution framework established under the Kenya Information and Communications Act and ought to have been presented before the Communications and Multimedia Appeals Tribunal. 2. The 2nd Appellant contends that the suit before the subordinate court was barred by the doctrine of res judicata by reason of Nairobi Constitutional Petition No. 201 of 2019. According to the Appellant, the Respondent had previously sought reliefs arising from the same factual circumstances and was therefore precluded from instituting the present proceedings. 3. The Respondent takes a contrary view, that Petition No. 201 of 2019 was limited to obtaining information relating to the impugned transactions and did not seek nor determine the parties' substantive rights and liabilities. It was therefore argued that the essential ingredients of the doctrine of res judicata had not been established. 4. The record shows that Airtel specifically pleaded the doctrine of res judicata in its Statement of Defence dated 22nd January, 2022, maintaining that the Plaintiff's claim was barred owing to the earlier constitutional petition. 5. The learned trial magistrate considered the objection and concluded that the suit was not barred. The court observed that while the constitutional petition principally sought access to information relating to the impugned transactions, the present suit sought compensation arising from the alleged breach of contractual, fiduciary duties arising from the loss of funds. The trial court therefore found that the causes of action, issues for determination and reliefs sought in the two proceedings were materially different. 6. Having independently reconsidered the pleadings, evidence and applicable law, I agree with the learned trial magistrate's conclusion. Section 7 of the Civil Procedure Act bars a subsequent suit only where the matter directly and substantially in issue was directly and substantially in issue in a former suit between the same parties, litigating under the same title, before a court of competent jurisdiction, and where the matter was heard and finally determined. As stated by the Court of Appeal in ***Independent Electoral and Boundaries Commission v Maina Kiai & 5 Others [2017] eKLR***, all the constituent elements of res judicata must coexist before the doctrine may be invoked. 7. From the record before this Court, Petition No. 201 of 2019 principally sought orders compelling disclosure of information relating to the impugned transactions, including transaction logs, investigative reports, identities of persons involved and other material necessary to facilitate investigations. The petition did not seek damages for negligence, compensation for breach of contract or declarations of liability against either Appellant. 8. Indeed, PW1's evidence was that the petition became necessary because the Appellants had declined to furnish him with information required by the investigating authorities. Consequently, the question whether either Appellant negligently breached contractual, fiduciary or other legal duties owed to the 1st Respondent was neither heard nor finally determined in those proceedings. 9. I therefore find that the present suit is distinct from the constitutional petition both in substance and in the remedies sought. The plea of res judicata was properly rejected by the trial court and accordingly fails. 10. On the second limb, whether the subordinate court lacked jurisdiction to entertain the suit, the 2nd Appellant challenges the jurisdiction of the subordinate court on the ground that the dispute fell within the statutory dispute-resolution framework established under the Kenya Information and Communications Act and ought therefore to have been presented before the Communications and Multimedia Appeals Tribunal. 11. In support of that argument, Airtel pleaded that it merely provided telecommunications infrastructure and services and that complaints relating to telecommunications services were required to be pursued through the dispute-resolution mechanisms established under the Act. 12. The evidence of DW2, Ms. Lilian Mugo, was consistent with that position. She testified that Airtel's role was limited to the provision of telecommunications services and that DTB's mobile banking platform operated independently of Airtel's systems. She further stated that Airtel neither processed nor authenticated banking transactions and had no access to customers' banking PINs or the bank's authentication processes. It was on that factual basis that Airtel argued that any dispute concerning the withdrawals properly lay between the customer and the bank. 13. Although the learned trial magistrate found that the suit was properly before the court, no detailed analysis of this jurisdictional objection, was provided. 14. Jurisdiction is undoubtedly fundamental. As was stated in ***Owners of the Motor Vessel "Lillian S" v Caltex Oil (Kenya) Ltd [1989] eKLR***, jurisdiction is everything and without it a court must down its tools. Equally, however, the question of jurisdiction must be determined by examining the true nature and substance of the dispute presented before the court. 15. In the present case, the Plaint was not founded upon any provision of the Kenya Information and Communications Act. The Plaintiff did not seek any regulatory remedy under that statutory framework. Rather, he pleaded that the 1st Appellant breached its contractual and fiduciary obligations as his banker and that the 2nd Appellant negligently facilitated an unauthorized SIM replacement which in turn enabled fraudulent withdrawals from his bank accounts. 16. The reliefs sought were equally instructive. The Plaintiff sought recovery of the sums withdrawn from his accounts together with damages arising from the alleged breaches of duty. The gravamen of the claim was therefore a civil claim founded on contract, negligence and breach of fiduciary obligations. 17. While the events giving rise to the dispute occurred within the context of telecommunications services, the court was not called upon to exercise any regulatory or supervisory mandate reserved exclusively for the Communications and Multimedia Appeals Tribunal. Rather, it was required to determine whether the Appellants owed legal duties to the Plaintiff, whether those duties were breached and whether such breaches caused the financial loss complained of. Those questions fall squarely within the ordinary civil jurisdiction of the subordinate court. 18. Accordingly, I find no merit in the jurisdictional objection as advanced by the 2nd Appellant. 19. In the result, both limbs of the preliminary objection fail. I find that the suit was neither barred by the doctrine of res judicata nor ousted by the dispute-resolution framework under the Kenya Information and Communications Act. The first issue is therefore determined in favour of the 1st Respondent and against the Appellants. I now turn to consider the substantive question of liability. **Whether the learned trial magistrate erred in finding the Appellants jointly liable for breach of their contractual and fiduciary duties and in negligence** 1. The evidence establishes beyond controversy that the Respondent's Airtel line was subjected to an unauthorized SIM replacement on 12th November, 2018. This fact was admitted by the 2nd Appellant both in its pleadings and through the testimony of DW2, Ms. Lilian Mugo, who further acknowledged that the individual who procured the replacement SIM card was neither properly identified nor duly registered in Airtel's system. It is also common ground that the impugned withdrawals were effected immediately after the SIM replacement and that the fraudulent withdrawals were processed through the mobile banking platform linked to that telephone number. The occurrence of fraud is therefore not disputed. The question for determination is whether the conduct of either or both Appellants amounted to a breach of the duties they owed to the 1st Respondent and whether such breach caused the loss complained of. ***i)Whether the 1st Appellant discharged the duty of care expected of a reasonable banker*** 1. There is no dispute that a banker-customer relationship existed between the 1st Appellant and the Respondent. The 1st Appellant admitted in both its Defence and through the testimony of DW1, Mr. Karim Shivji, that the Respondent maintained the subject accounts with the bank and had subscribed to its mobile banking platform. Equally undisputed is the fact that the parties' relationship was governed by the bank's terms and conditions and that the bank owed the Respondent a duty to exercise reasonable care and skill in the operation and management of his accounts. 2. The evidence further established that the impugned transactions were authenticated using the correct mobile banking PIN associated with the Respondent's account. DW1 testified that the bank's system could only process a transaction upon successful entry of the customer's confidential PIN and that investigations confirmed that the PIN used during the impugned transactions was the correct PIN linked to the Respondent's account. He further stated that no employee of the bank had access to the customer's PIN. This evidence was not controverted by any technical evidence demonstrating that the bank's authentication systems had been compromised. 3. I agree with the 1st Appellant that the learned trial magistrate erred in holding that the bank was negligent for failing to impose transaction limits upon the Respondent's account. Neither the Plaint nor the evidence showed that the parties had agreed upon any maximum withdrawal threshold or that any statutory, or contractual requirement obligated the bank to impose such limits. Liability cannot properly be founded upon a standard of care not in the pleadings, evidence or argument from the parties. To that extent, the impugned finding of the court cannot stand. 4. That said, the erroneous reliance upon transaction limits does not automatically absolve the bank from liability. The appellate court must still determine whether the bank discharged its independent duty to operate a reasonably secure mobile banking system and to respond appropriately to suspicious activity affecting its customer's account. 5. On this aspect, the evidence discloses that the bank detected unusual activity and attempted to contact the Respondent during the early hours of 13th November, 2018. This demonstrated the existence of a monitoring mechanism and cannot be ignored. However, the evidence further reveals that by the time the suspicious activity was detected and intervention initiated, the substantial part of the loss had already occurred. 6. More significantly, although DW1 testified that internal investigations had been undertaken following the incident, the bank failed to produce its investigation report or other documentary evidence explaining how the impugned transactions were processed, what alerts were generated, at what stage they were triggered, and whether its fraud management systems operated as intended during the material period. Such information was exclusively within the bank's possession and control. 7. In circumstances where a customer demonstrates that unauthorized withdrawals occurred through systems controlled by the bank, and where material evidence regarding the functioning of those systems is withheld by the institution possessing it, the court is entitled to draw an adverse inference regarding the evidential value of the omitted material. The failure by the 1st Appellant to place before the court the results of its own investigation left a significant evidentiary gap which it was best positioned to fill. 8. Moreover, the fact that the fraudulent scheme was initiated through Airtel's unauthorized SIM replacement did not relieve the bank of its own obligations to its customer. The bank remained under an independent duty to demonstrate that its authentication, monitoring and response systems exercised the degree of care reasonably expected of a prudent banker in the circumstances. Upon a re-evaluation of the record, I am not satisfied that the bank discharged that burden satisfactorily. ***ii)Whether the 2nd Appellant owed the Respondent a duty of care and whether it breached that duty*** 1. The 2nd Appellant maintained that it was merely a telecommunications service provider and bore no responsibility for transactions processed through the 1st Appellant's banking platform. While it is true that the 2nd Appellant neither generated nor authenticated the customer's banking PIN and played no part in authorizing banking transactions, that fact alone does not determine the question of liability. 2. The evidence established that the 2nd Appellant owed the Respondent a duty to exercise reasonable care in the administration of his subscriber account, including the replacement of SIM cards. DW2 confirmed that Airtel's procedures required a customer seeking SIM replacement to appear in person and undergo identity verification before a replacement SIM could be issued. 3. However, DW2 admitted that the SIM replacement affecting the Respondent’s line was irregular and that the person who procured the replacement SIM card was not properly identified within Airtel's registration system. Those admissions significantly weakened its attempt to deny negligence. 4. Once the Respondent established that his SIM card had been replaced without his authorization, and the 2nd Appellant admitted deficiencies in the verification process, the evidential burden shifted to the 2nd Appellant to demonstrate how the replacement was nevertheless lawfully issued notwithstanding those irregularities. No satisfactory explanation was offered. Nor was any documentary record produced demonstrating compliance with the verification procedures that Airtel itself relied upon. 5. I therefore agree with the learned trial magistrate that the 2nd Appellant failed to exercise reasonable care in the SIM replacement process. Unlike the finding regarding transaction limits, this conclusion was firmly grounded upon both the pleadings and the evidence tendered before the court. 6. I also reject the contention that the existence of a separate banking authentication process broke the chain of causation. The unauthorized SIM replacement was not a remote or incidental event. Rather, it was the event that enabled the fraudsters to assume control of the mobile number linked to the Respondent's banking facility and thereby facilitate the fraudulent scheme. In the circumstances of this case, the SIM replacement was a proximate and substantial cause of the loss ultimately suffered. 7. Accordingly, I find no basis for interfering with the learned trial magistrate's conclusion that the 2nd Appellant breached the duty of care owed to the Respondent. The question that now remains is whether the trial court correctly apportioned liability between the parties, a matter I shall address under the next issue. **Whether the learned trial magistrate properly evaluated the evidence relating to causation, the burden of proof and the 1st Respondent's contributory negligence** 1. There is no dispute that under Sections 107, 108 and 109 of the Evidence Act, the legal burden of proving negligence rested throughout upon the Respondent. However, once he established the occurrence of an unauthorized SIM replacement and the subsequent depletion of funds through systems exclusively operated and controlled by the Appellants, an evidential burden arose requiring the Appellants to provide a credible explanation regarding the safeguards in place and how the impugned transactions were nevertheless processed. Such matters lay peculiarly within their knowledge within the meaning of Section 112 of the Evidence Act. 2. The Appellants urged the court to infer that the Respondent must have voluntarily disclosed his confidential PIN because the transactions were authenticated using the correct credentials. I am unable to accept that argument as conclusive. Although the evidence established that the correct PIN was used, no direct evidence was adduced showing that the Respondent disclosed the PIN to any person. The proposition remained an inference advanced by the Appellants. Conversely, the Respondent consistently denied any disclosure and no evidence was tendered to contradict that testimony. I therefore agree with the learned trial magistrate that the allegation was not proved on a balance of probabilities. 3. Nevertheless, I find that the learned trial magistrate did not sufficiently address the Respondent's own obligations under the mobile banking arrangement. The evidence demonstrates that on 12th November, 2018, the Respondent became aware that his mobile line had unexpectedly lost service. Given that the line constituted the primary authentication channel for his mobile banking services, a reasonable customer exercising ordinary prudence would have promptly notified the bank so that precautionary measures could be undertaken in relation to the affected accounts. 4. Although the Respondent contacted the 2nd Appellant concerning the loss of service, he did not notify the 1st Appellant of a possible compromise to the telephone number linked to his banking facilities. The bank only became aware of the fraud through its own monitoring systems and thereafter initiated contact with him. In my view, that omission materially increased the opportunity for the fraudsters to continue accessing the account and therefore amounted to contributory negligence. 5. Having independently re-evaluated the evidence, I am satisfied that the loss resulted from a combination of failures attributable to all the parties. The 2nd Appellant negligently facilitated the unauthorized SIM replacement. The 1st Appellant failed to satisfactorily demonstrate that its monitoring and fraud response systems exercised reasonable care in the circumstances. On the other hand, the Respondent failed to take prompt precautionary action by notifying the bank after discovering that the mobile line linked to his banking facilities had become inoperative under suspicious circumstances. 6. The apportionment of liability is a discretionary exercise dependent upon an assessment of the parties' relative blameworthiness and causal contribution to the loss. While this Court has differed with certain aspects of the reasoning adopted by the learned trial magistrate, the ultimate distribution of responsibility reflects the respective roles played by each party in bringing about the loss. I am therefore not persuaded that the apportionment of liability at 80% against the Appellants jointly and 20% against the Respondent was wholly erroneous or founded upon an incorrect principle. Accordingly, I decline to interfere with that apportionment. **Whether the award of damages and the consequential reliefs granted by the trial court warrant interference by this Court** 1. Both Appellants challenge the award of Kshs. 400,000/= granted as general damages for mental torture and stress. They contend that the Respondent's claim before the trial court was grounded on breach of contract, breach of fiduciary duty and negligence, and that damages for mental anguish are generally not recoverable under such causes of action. They further submit that the alleged mental torture and stress were neither specifically pleaded with sufficient particularity nor proved through medical evidence or any other independent evidence. 2. The Respondent supports the award, arguing that the evidence before the trial court demonstrated that the funds fraudulently withdrawn constituted personal savings intended for his forthcoming wedding. He submits that the loss of those funds compelled him to seek alternative financing and occasioned considerable anxiety, distress and inconvenience. Counsel contends that the learned trial magistrate properly exercised her discretion in awarding damages under that head. 3. It is settled law that an appellate court will not lightly interfere with an award of damages merely because it would itself have reached a different conclusion. Interference is justified only where it is shown that the trial court acted upon a wrong principle of law, misapprehended the evidence, took into account irrelevant considerations, failed to take into account relevant considerations, or where the award is so inordinately high or low as to amount to an erroneous estimate of the loss suffered. 4. I have carefully considered the pleadings, the evidence on record and the judgment of the trial court. The Respondent principally sought recovery of the funds fraudulently withdrawn from his accounts together with damages arising from the Appellants' alleged breach of duty. The evidence establishes that the unauthorized withdrawals occasioned inconvenience and undoubtedly caused distress to the Respondent. His testimony that the funds had been reserved for his wedding was not challenged. The issue, however, is not whether he suffered distress, but whether such distress was, in law, compensable through an award of general damages in the circumstances of this case. 5. The governing principle is that damages for breach of contract are compensatory in nature and are intended, so far as money can do so, to place the innocent party in the position he would have occupied had the contract been properly performed. As a general rule, damages for injured feelings, anxiety, inconvenience, mental distress or disappointment are not recoverable in ordinary contractual claims unless the claim falls within a recognised exception. Such exceptions were neither pleaded nor established in the present case. 6. The trial court did not identify any legal basis for departing from that general principle. Nor did it demonstrate how the present claim fell within any recognised category permitting an award for mental anguish. While the Respondent testified that he suffered emotional distress following the loss of funds intended for his wedding, no medical evidence, expert testimony or other independent evidence was tendered to establish any recognizable psychological injury beyond the understandable anxiety and frustration ordinarily associated with financial loss. The evidence therefore fell short of justifying a separate award under the head of mental torture and stress. 7. Moreover, the loss suffered by the Respondent was essentially pecuniary and readily ascertainable. The amount fraudulently withdrawn from his accounts was specifically pleaded and proved through documentary banking records. The trial court duly compensated that loss by awarding Kshs. 592,864/=. In the absence of a clear legal foundation or sufficient evidential basis, the additional award of Kshs. 400,000/= for mental torture and stress constituted an erroneous exercise of judicial discretion. 8. I am therefore satisfied that the learned trial magistrate misdirected herself in principle in awarding general damages for mental torture and stress. This Court is consequently entitled to interfere with that award. The award of Kshs. 400,000/= under that head is hereby set aside. 9. I find no basis, however, for disturbing the award of Kshs. 592,864/=, being the amount fraudulently withdrawn from the 1st Respondent's accounts. That sum was specifically pleaded, strictly proved by the documentary evidence produced before the trial court, and was not substantively disputed by the Appellants. Subject to the apportionment of liability upheld by this Court, the award remains payable. 10. As regards interest and costs in the trial court, I discern no error in the exercise of the learned trial magistrate's discretion. The award of interest on the decretal sum and the order as to costs properly followed the determination of liability and require no interference. However, given that this appeal succeeds only in part, and only to the extent that the award for mental torture and stress has been set aside, the interests of justice are best served by directing that each party shall bear its own costs of the appeal. 11. Accordingly, the appeal partially succeeds in the following terms; * 1. **The award of Kshs. 400,000/= as general damages for mental torture and stress is hereby set aside.** 2. **The award of Kshs. 592,864/=, being the amount fraudulently withdrawn from the Respondent's accounts, is upheld subject to the 20% contributory liability attributed to the Respondent. Each of the Appellant shall pay Kshs. 237,145.60/-.** 3. **The said sum shall attract interest as ordered by the trial court.** 4. **Each party shall bear its own costs of the appeal.** ***Delivered, Dated and Signed virtually this 6th day of August, 2026*** **RHODA RUTTO** **JUDGE** **Court Assistant: Wabwire**