https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/9699

REPUBLIC OF KENYA IN THE HIGH COURT OF KENYA AT NAIROBI COMMERCIAL AND TAX DIVISION CORAM: F. MUGAMBI, J COMM CASE NO. E074 OF 2020 BETWEEN MART NETWORKS KENYA LIMITED ………….…….... PLAINTIFF HORIZON MEDIA SOLUTIONS KENYA LTD ………. DEFENDANT VERSUS JUDGMENT Introduction and Background 1. By a Plaint dated 4th March 2020, the Plaintiff commenced these proceedings seeking, principally: i. An Order compelling the Defendant to return to the Plaintiff the Huawei Micro- Grid Power Solution equipment supplied to it by the Plaintiff pursuant to the Purchase Order dated 19th September 2017 in the same quality and quantity HCCCOMM E074 OF 2020 JUDGMENT Page 1 supplied to it, in strict compliance with the Equipment Release Agreement dated 1st November 2018. ii. In the alternative to Prayer (a) above, Judgment be and is hereby entered in favour of the Plaintiff against the Defendant in the sum of USD 523,923.56 being the value of the unreturned Huawei MicroGrid Power Solution equipment. iii. In any event, the Defendant be and is hereby Ordered to pay any and all accrued liquidated damages due to the Supplier on account of the delay in returning the said Huawei Micro-Grid Power Page 4 of 8. iv. Nyachoti & Co. Advocates Solution equipment from the date of the Equipment Release Agreement dated 1st November 2018 until the date of Judgment. General damages for breach of the Equipment Release Agreement dated 1st November 2018. v. Interest on prayers (b), (c) and (d) at court rates from the date of filing of suit until payment in full. HCCCOMM E074 OF 2020 JUDGMENT Page 2 vi. Costs of this suit. 2. The Plaintiff's case, as pleaded, is that the Defendant issued a Purchase Order on or about 19th September 2017 for the supply of Huawei Micro-Grid Power Solution equipment sourced from Huawei International Company Limited, at a contract price of USD 777,455.34. Upon delivery, the Defendant rejected the equipment, and the parties thereafter entered into the Equipment Release Agreement dated 1st November 2018 to address the consequences of that rejection. Under that Agreement, the Defendant undertook to release the equipment to the Plaintiff in 3 phases comprising 6 lots, in exchange for an indemnity of USD 60,000 payable in tranches of USD 10,000, USD 20,000 and USD 30,000 upon release of each phase. 3. The Plaintiff avers that only 2 of the 6 lots were released, that it duly paid the corresponding pro- rated indemnity of USD 20,000, and that the Defendant has since failed and/or refused to release the remaining four lots despite demand. HCCCOMM E074 OF 2020 JUDGMENT Page 3 4. The Defendant entered appearance and filed an Amended Statement of Defence and Counterclaim, denying that it issued any Purchase Order to the Plaintiff and maintaining that it acted merely as a technical advisor and subcontractor to Sonara Ventures Limited, the latter having been contracted with the Rural Electrification Authority for the design, supply, installation, testing and commissioning of solar PV-diesel hybrid mini-grid plants. The Defendant contended that the true purchaser of the equipment was Sonara Ventures Limited, that the Plaintiff acted only as Huawei's authorised local distributor, and that the Equipment Release Agreement was executed at the Plaintiff's request to assist in securing release of the equipment from Sonara Ventures Limited, rather than from the Defendant's own custody. 5. The Defendant further pleaded that further performance was frustrated by disputes between the Plaintiff, Huawei and Sonara Ventures Limited over unpaid storage and related costs, culminating in separate proceedings and an auction of the equipment. On this basis, the Defendant denied breach and counterclaimed for losses said to have HCCCOMM E074 OF 2020 JUDGMENT Page 4 been occasioned to Sonara Ventures Limited, comprising outstanding storage costs of Kshs. 14,305,000 and reimbursable tax, duty, transport and other costs of Kshs. 39,489,758, together with general, exemplary and aggravated damages. 6. The Plaintiff filed a response maintaining the case as pleaded in the Plaint. The Defendant did not attend the hearing despite due service, and the matter proceeded ex parte. The Plaintiff called one witness, Mr Aunally Maloo, its Managing Director, who adopted his witness statement and produced the documents relied upon. The Plaintiff also filed written submissions, which I have duly considered. 7. The following issues arise for determination: i. Whether the parties entered into a binding agreement for the release of the equipment; ii. Whether the Defendant is in breach of that agreement; iii. Whether the Plaintiff is entitled to the reliefs sought; and iv. Who bears the costs of the suit? HCCCOMM E074 OF 2020 JUDGMENT Page 5 Analysis and Determination 8. From the Plaintiff’s Bundle of Documents, it is clear that parties executed the Equipment Release Agreement dated 1st November 2018. By its terms, the Defendant agreed to release the full quantity of equipment to the Plaintiff in consideration of an indemnity of USD 60,000, payable in 3 tranches as equipment was released phase by phase, with the Defendant assuming responsibility for the care, quality and quantity of the equipment pending full release. The terms of the Agreement corroborate the Plaintiff's pleaded case and the testimony of PW1. 9. This is further supported by correspondence between the parties, including an email of 4th June 2019 in which the Plaintiff referred to the collection of the 2nd lot and proposed a tripartite discussion on the movement of the remaining equipment. This is evidence consistent with partial performance of the Agreement by the Defendant, and consistent with the Plaintiff's account of delay in the release of the balance of the equipment. HCCCOMM E074 OF 2020 JUDGMENT Page 6 10. I do appreciate that the applicable standard in civil proceedings is proof on a balance of probabilities. In William Kabogo Gitau V George Thuo & 2 Others, [2010] KEHC 4124 (KLR) , Kimaru J (as he then was), held that a party who establishes his case to a degree exceeding that of his opponent, colloquially expressed as 51% as against 49%, has discharged the burden of proof on a balance of probabilities. The Learned Judge stated as follows: “In ordinary civil cases, a case may be determined in favour of a party who persuades the court that the allegations he has pleaded in his case are more likely than not to be what took place. In percentage terms, a party who is able to establish his case to a percentage of 51% as opposed to 49% of the opposing party is said to have established his case on a balance of probabilities. He has established that it is probable than not that the allegations that he made occurred.” HCCCOMM E074 OF 2020 JUDGMENT Page 7 11. Although the Defendant entered appearance and pleaded a defence and counterclaim, they called no evidence and did not appear at the hearing despite due service. The Plaintiff's evidence therefore stands unrebutted. Applying the balance of probabilities standard, I find that the Plaintiff has established that the Defendant released only 2 of the 6 lots of equipment, received the corresponding indemnity payment of USD 20,000, and has since failed to release the remaining equipment notwithstanding demand, in breach of its obligations under the Agreement. 12. As to the claim for general damages for breach of contract, the Court of Appeal for East Africa in Dharamshi V Karsan, [1974] EA 41 held that the object of damages for breach of contract was to restore the claimant as nearly as possible to the position he would have occupied had the breach not occurred, in accordance with the remoteness principle in Hadley V Baxendale, (1854) 9 Exch. 341. The Court held that: “As a general principle, the purpose of damages for breach of HCCCOMM E074 OF 2020 JUDGMENT Page 8 contract is, subject to mitigation of loss, the claimant is to be put as far as possible in the same position he would have been if the breach complained of had not occurred. The measure of damages is in accordance with the rule established in the case of Hadley V Baxendale, (1854) 9. Exch.341 that the measure of damages is such as may be fairly and reasonably be considered arising naturally from the breach itself or such as may be reasonably contemplated by the parties at the time the contract was made and a probable result of such breach. Such damages are not damages at large or general damages but are in the nature of special damages and they must be pleaded and proved.” HCCCOMM E074 OF 2020 JUDGMENT Page 9 13. On that basis, an award representing the monetary value of the unreturned equipment is sufficient to restore the Plaintiff to its pre-breach position, particularly given the uncertainty as to the present condition of the equipment on account of the passage of time and consequent wear and tear. I find that general damages have not been proved and are not awardable in this case. Similarly, no evidence has been adduced in specific proof of the liquidated damages pleaded as due to the supplier, and that claim likewise fails. 14. The Defendant’s Counterclaim is also not substantiated by any evidence and such, the same fails. Disposition 15. For the foregoing reasons, judgment is hereby entered in favour of the Plaintiff against the Defendant in the sum of USD 523,923.56, being the value of the unreturned Huawei Micro-Grid Power Solution equipment. The said sum shall attract interest at court rates from the date of filing of suit until payment in full. The Plaintiff shall have the costs of the suit. HCCCOMM E074 OF 2020 JUDGMENT Page 10 16. The Counterclaim is dismissed for want of proof. DATED, SIGNED AND DELIVERED AT NAIROBI THIS 3 RD DAY OF JULY 2026. F. MUGAMBI JUDGE Delivered in presence of: Ms Onchagwa h/b for Nyachoti for plaintiff Court Assistants: Lillian & Gloria HCCCOMM E074 OF 2020 JUDGMENT Page 11