https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/11155

Ministry of Interior & Coordination of the National Government & another v Sasah Contractors Limited (Civil Appeal 175 of 2023) [2026] KEHC 11155 (KLR) (17 July 2026) (Judgment) Neutral citation: [2026] KEHC 11155 (KLR) Republic of Kenya In the High Court at Kisumu Civil Appeal 175 of 2023 JM Omido, J July 17, 2026 Between Ministry of Interior & Coordination of the National Government 1st Appellant The Inspector General of the National Police Service 2nd Appellant and Sasah Contractors Limited Respondent (Being an appeal from the judgement and decree of Hon. E. A. Obina, Senior Principal Magistrate, delivered on 28th September, 2023 in Kisumu CMCC No. E086 of 2022) Judgment A. Introduction. 1.This appeal arises from the judgement and decree of Hon. E. A. Obina, Senior Principal Magistrate, delivered on 28th September, 2023 in Kisumu CMCC No. E086 of 2022. The proceedings before the trial court arose from a contractual dispute in which the Respondent, who was the Plaintiff before that court, instituted proceedings against the 1st and 2nd Appellants, who were the 1st and 2nd Defendants, respectively. 2.By a plaint dated 16th March, 2022, the Respondent sought to recover Ksh.9,961,305.81/- from the Appellants. The amount was claimed as interest allegedly accruing from the failure to pay Certificate No. 16, which the Respondent contended fell due on 5th March, 2012 but was not paid until 30th January, 2019. 3.The Appellants resisted the Respondent’s claim by filing a joint statement of defence dated 7th June 2022. In the defence, they wholly denied liability for the Respondent’s claim and prayed that the suit be dismissed with costs. 4.The trial court heard the matter and, on 29th September 2023, rendered judgement in favour of the Respondent. It entered judgment for the Respondent in the sum of Ksh.9,961,305.81, together with interest at court rates from the date of filing the suit until payment in full, as well as the costs of the suit. 5.Being aggrieved and dissatisfied with the judgement and decree of the trial court, particularly the findings and orders made in favour of the Respondent, the Appellants exercised their right of appeal and preferred the present appeal. Through the appeal, they challenge the trial court’s determination and seek the intervention of this Court on the grounds set out in their memorandum of appeal. B. Grounds Of Appeal. 6.The Appellants rely on the following grounds of appeal, as set out in their memorandum of appeal dated 24th October, 2023, in challenging and seeking to set aside the judgement and decree of the trial court:i.The learned trial magistrate erred in both fact and law by awarding interest on late payment on retention while the same is not provided for in the contract.ii.The learned Magistrate erred in law and in fact by relying on Clause 23.3 in the contract to award the Respondent/Plaintiff interest on retention, while Clauses 26.1 and 32.1 of the same contract expressly cover payment of retention and final Account payments respectively and the same clauses do not provide for payment of interest on delayed payment on retention.iii.The Learned Magistrate erred in Fact and in law by awarding Kshs 9,961,305.81 to the Respondent/Plaintiff who did not specifically plead and prove the interest rate applied to arrive at that amount therefore their claim for the same was unsubstantiated and based on no evidence.iv.The court erred by awarding Kshs. 9,961,305.81 without showing how they arrived at that amount and the same is manifestly harsh, unconscionable, oppressive and exorbitant.v.The learned Magistrate erred in fact and law by not finding that the claimant was estopped for failing to make any demands for interest despite the fact that at the hearing, the respondent/claimant did not produce any demand letter/notice to show that they made any demand for payment of interest on retention and when in 2016 they accepted the payment without demanding for interest and that no demand was made before instituting the suit.vi.The Learned Trial Magistrate erred in fact and in law in failing to take into account the Appellant/Defendant's submissions and cited authorities' copies which were availed. 7.The Appellants urge this Court to allow the appeal and set aside the judgement and decree of the trial court. They pray that the judgement and decree be substituted with an order dismissing the Respondent’s claim against them with costs. 8.In the alternative, the Appellants pray that the award made by the trial court be set aside and substituted with an award commensurate with the loss, if any, proved by the Respondent. They further pray that this Court make appropriate orders as to the costs of both the proceedings before the trial court and the present appeal. C. Duty Of This Court. 9.As this is a first appeal, I am obligated, pursuant to Section 78 of the Civil Procedure Act and as articulated in Selle v Associated Motor Boat Co. Ltd [1969] E.A. 123, to re-assess, re-analyze and re-evaluate the evidence presented before the trial court and to arrive at my own conclusions, bearing in mind that I neither saw nor heard the witnesses testify. 10.In Selle, Sir Clement De Lestang observed that:“This Court must consider the evidence, evaluate it itself and draw its own conclusions, though in doing so it should always bear in mind that it neither heard witnesses and should make due allowance in this respect.However, this Court is not bound necessarily to follow the trial judge’s findings of fact if it appears either that he had clearly failed on some point to take account of particular circumstances or probabilities, materially to estimate the evidence or if the impression based on the demeanour of a witness is inconsistent with the evidence in the case generally.” 11.The duty of the first appellate court was also discussed by the Court of Appeal for East Africa in the case of Peters v Sunday Post Limited [1958] EA 424 in which it was held that the appropriate standard of review established in cases of appeal can be stated in three complementary principles:“i.First, on first appeal, the Court is under a duty to reconsider and re-evaluate the evidence on record and draw its own conclusions;ii.In reconsidering and re-evaluating the evidence, the first appellate court must bear in mind and give due allowance to the fact that the trial court had the advantage of seeing and hearing the witnesses testify before her; andiii.It is not open to the first appellate court to review the findings of a trial court simply because it would have reached different results if it were hearing the matter for the first time.” D. The Pleadings Before The Trial Court. 12.The Respondent pleaded in the plaint that it was a limited liability company incorporated under the Companies Act and that the 1st Appellant was a national government department or ministry responsible for internal national security, public administration and the co-ordination of the national government, while the 2nd Appellant was a public officer established under the National Police Service Act and responsible for the Kenya National Police Service. 13.The Respondent averred that, sometime in the year 2008, the Appellants advertised a tender for the construction of the proposed 24 Type E flats at Kondele Police Station, Kisumu. The Respondent successfully tendered for the works and, consequently, entered into a contract with the Appellants on 12th March, 2008 for the construction of the said flats. 14.The Respondent pleaded that the original contract sum was Ksh.84,381,918.00/-. However, after commencement of the works, the scope of the project was varied following instructions issued by the Project Manager. The variations amounted to Ksh.9,460,854.41/-, while other contractual claims arising from price fluctuations and additional works amounted to Ksh.14,925,859.00/-, thereby increasing the total contractual sum to Ksh.108,768,631.41/-. 15.The Respondent further pleaded that the contract period was 52 weeks but that delays in the payment of certificates by the Appellants affected the timely completion of the project and necessitated an extension of the contract period. Despite the difficulties occasioned by the delayed payments, the Respondent completed the works and handed over the project on 19th July, 2011. Upon the expiry of the defects’ liability period, the Respondent was issued with a Certificate of Practical Completion and subsequently a Certificate of Making Good Defects. 16.The Respondent averred that the Appellants delayed payment of the retention monies and other certified amounts, thereby attracting interest under the express terms of the contract. In particular, the Project Manager issued Final Certificate No. 16, which became due for payment on 5th March, 2012 in the sum of Ksh.11,032,015.84/-. The Respondent pleaded that the Appellants delayed payment of that amount until 30th June, 2019. 17.The Respondent relied on Clause 23.3 of the contract, which provided, in substance, that the Employer was required to pay certified amounts within 30 days of the date of issue of each certificate and that, where payment was delayed, the Contractor would be paid simple interest on the delayed payment. The interest was to be calculated on the basis of the number of days of delay at a rate three percentage points above the Central Bank of Kenya’s average base lending rate prevailing on the date the payment became overdue. 18.The Respondent consequently pleaded that the delayed payment of the certified amounts, and in particular the final payment of Ksh.11,032,015.84/- which was made approximately eight years after it fell due, attracted contractual interest. It calculated the accrued interest at Ksh.9,961,305.81/-, based on three percentage points above the applicable Central Bank of Kenya lending rates during the relevant period. 19.The Respondent’s claim against the Appellants was therefore for Ksh.9,961,305.81/-, being interest allegedly due under Clause 23.3 of the contract on account of the delayed payment of the certified sums. The Respondent pleaded that, despite demand and the issuance of a notice of intention to sue, the Appellants failed or neglected to settle the claimed amount, thereby necessitating the institution of the suit. 20.The Respondent consequently sought judgement against the Appellants, jointly and severally, for Ksh.9,961,305.81/-, together with interest accruing under Clause 23.3 of the contract, interest at the rate of three percentage points above the Central Bank of Kenya lending rate until payment in full, and the costs and interest of the suit. 21.The Appellants resisted the Respondent’s claim and denied each and every allegation contained in the plaint and put the Respondent to strict proof thereof. 22.They denied the allegations relating to the tender, the contract and the Respondent’s claim, and put the Respondent to strict proof thereof. In respect of several other averments in the plaint, the Appellants stated that they were strangers to the matters pleaded and similarly required the Respondent to prove them. 23.The Appellants further pleaded that the suit was time-barred by virtue of Section 3(2) of the Public Authorities Limitation Act, Cap. 39, Laws of Kenya. They admitted only that there had been no previous proceedings between the parties concerning the same subject matter. 24.The Appellants denied that a demand and notice of intention to sue had been issued against them and put the Respondent to strict proof thereof. They also denied the jurisdiction of the trial court to hear and determine the suit. 25.On that basis, the Appellants prayed that the Respondent’s suit be dismissed with costs on the ground that it disclosed no reasonable cause of action against them. 26.The Respondent filed a reply to the statement of defence, thereby joining issue with the Appellants’ defence and reiterating the averments contained in the plaint. The Respondent further denied the Appellants’ contention that the suit was time-barred. E. The Evidence Before The Trial Court. 27.The Respondent called its director Samwel Okumu Odhiambo who testified as PW1 and adopted the contents of his witness statement dated 16th March, 2021, in which she stated that sometime in the year 2008, the Appellant advertised a tender for the construction of 24 Type E flats at Kondele Police Station, Kisumu, which the Respondent successfully bid for. 28.Consequently, the parties entered into a contract dated 12th March, 2008, for the construction of the said flats at an initial contract sum of Ksh.84,381,918.00/-. He stated that, following variations to the initial contract, including changes in the scope of works instructed by the Project Manager, price fluctuations and extra works, the contract sum eventually escalated to Ksh.108,768,631.41/-. 29.He testified that the contract period was 52 weeks but that, owing to delayed payments by the Appellant after certificates had been issued by the Project Manager, the project could not be completed within the initial contractual period, thereby necessitating an extension. 30.Despite the difficulties occasioned by the delayed payments, the Respondent completed the project and handed it over on 19th July, 2011. Thereafter, the defect liability period elapsed, and the Respondent was issued with a Certificate of Practical Completion and subsequently a Certificate confirming that the defects had been made good. 31.The witness further stated that the Project Manager issued Final Certificate No. 16 for practical completion and payment on 5th March, 2012, in the sum of Ksh.11,032,015.84/-. However, the Appellant delayed payment of the said amount until 30th June, 2019. He set out the payments made against the certificates issued during the project and maintained that the payments were made late. 32.PW1 relied on Clause 23.3 of the contract, which provided verbatim as follows:“Payments shall be adjusted for deductions for retention. The Employer shall pay the Contractor the amounts certified by the Project Manager within 90 days of the date of issue of each certificate. If the Employer makes a late payment, the Contractor shall be paid simple interest on the late payment in the next payment. Interest shall be calculated on the basis of number of days delayed at a rate three percentage points above the Central Bank of Kenya’s average rate for base lending prevailing as of the first day the payment becomes overdue.” 33.The witness stated that, by reason of the delayed payments, interest accrued on the sums that remained outstanding. In particular, he contended that the final payment of Ksh.11,032,015.84/- was made approximately eight years after the amount fell due. 34.PW1 consequently calculated the accrued interest at Ksh.9,961,305.81/-, based on the contractual rate of three percentage points above the applicable Central Bank lending rates. 35.The Respondent’s claim was therefore for Ksh.9,961,305.81/-, being interest arising from the delayed payment of the certified sums pursuant to Clause 23.3 of the contract. 36.The witness produced the following documents in support of the Respondent’s case: A copy of a letter dated 3rd March, 2012. A copy of a letter dated dated 5th March, 2012. A copy of a letter dated 11th May, 2016. A copy of a letter dated 31st May, 2016. A copy of a letter dated 8th November, 2016. A copy of summary of statement for final payment. Copies of summary of variation orders. Copies of statement for payment on account. Copies of payment vouchers. A copy of the tender document and agreement dated 12th March, 2008. 37.On cross examination, PW1 told the trial court that the Respondent had been a contractor for many years and had undertaken several government projects. He explained that payments under such contracts were made in instalments until the project was completed and the relevant certificates issued. 38.The witness stated that, upon completion, 50% of the amount was paid, with the remaining 50% being paid after six months. He maintained that, in the present case, there were payments made during the course of the project, but the payments were delayed, and that he had raised the issue of the delay in payment. 39.PW1 further testified that a Certificate of Completion was issued in 2011, another Certificate was issued in 2012 and that the Respondent was issued with a final statement of accounts in 2016. He clarified that the Respondent’s claim was solely for interest and that it was claiming interest from 5th March, 2012. 40.The witness acknowledged that the Certificate of Final Payment was issued on 11th May, 2016. He also referred to the provisions on settlement of disputes, including Clause 37, which in precis provided that disputes or differences arising between the Employer and the Contractor were to be notified and, subject to an attempt at amicable settlement, referred to arbitration in accordance with the procedure stipulated in the contract, with the arbitrator having jurisdiction to determine the matters in dispute and the resulting award being final and binding upon the parties. 41.The witness however maintained that the Respondent’s claim was purely for interest and that there was no architectural dispute requiring determination. 42.On re-examination, PW1 reiterated that the basis of the Respondent’s claim was the delay in payment and that the Respondent was claiming interest as provided for under Clause 23.3 of the contract. He maintained that Clause 23.3 applied to all the certificates issued under the contract. 43.The witness explained that a payment certificate was a document issued during the execution of the works, while a final certificate was a compilation of all the certificates. He further stated that a payment certificate formed the basis for payment and that, upon completion of the works, 50% could be paid, with the remaining 50% being paid after six months. PW1 added that no objection had been raised when he gave his testimony. 44.At that juncture, the Respondent closed its case. 45.The Appellants did not call any witnesses and likewise closed their case. F. The Trial Court’s Findings. 46.The trial court considered the pleadings, evidence and submissions before it and the applicable law, and identified the issues for determination as whether the Appellants had advertised the tender for the construction of 24 Type E flats at Kondele Police Station, whether the Respondent had bid for and won the tender, whether the parties had entered into a contract, the nature and cause of any difficulties encountered in the performance of the contract, whether the Respondent had proved its case on a balance of probabilities and the issue of costs. 47.The trial court noted that the Respondent’s case was that the parties had entered into a construction contract on 12th March, 2008, under which the Respondent undertook the construction works. The contract sum was subsequently varied, and the project was affected by delays in payment, resulting in an extension of the contract period. The Respondent eventually completed and handed over the project on 19th July, 2011, after which certificates of completion and making good defects were issued. 48.The trial court further found that Certificate No. 16, amounting to Ksh.11,032,015.84/-, became due for payment on 5th March, 2012 but was not paid until 30th June, 2019. 49.The trial court observed that the Appellants had filed a defence but did not call any evidence. It therefore held that the Respondent’s oral and documentary evidence remained unchallenged, and that the Appellants’ submissions could not substitute evidence or prove the averments contained in their defence. 50.The court consequently found that the Appellants had advertised the tender, that the Respondent had bid for and won it, and that the parties had entered into the construction agreement. It further found that the difficulties encountered in the performance of the contract were occasioned by the Appellants’ adjustments and delays in making payments. 51.On the question of interest, the trial court considered Clause 23.3 of the contract, which required payment of certified amounts within 30 days and provided for interest on late payment at three percentage points above the Central Bank of Kenya’s average base lending rate prevailing when the payment became overdue. It held that, since Certificate No. 16 remained unpaid beyond the contractual period and was eventually settled approximately eight years later, interest became payable under the contractual provision. 52.The court rejected the Appellants’ contention that there was no contractual basis for interest on the retained amount and held that it was not its role to rewrite the parties’ contract. 53.The trial court also rejected the Appellants’ reliance on the arbitration clause and their plea of limitation, finding that they had participated in the proceedings after filing a defence and had invoked arbitration too late. It further held that the subsequent payment made by the Appellants eight years later had effectively breathed life into the contractual relationship, thereby defeating the plea of limitation. 54.In the result, the trial court entered judgement for the Respondent in the sum of Ksh.9,961,305.81/-, with interest at court rates from the date of filing suit until payment in full, and awarded the Respondent the costs of the suit. G. The Appellants’ Submissions. 55.Now to this appeal, the Appellant submited that the appeal arose from the Respondent’s claim for Ksh.9,961,305.81/-, being interest allegedly due on account of delayed payment of certified sums under a construction contract. 56.They contended that the Respondent had pleaded that the Appellants delayed payment of retention monies after the expiry of the defects’ liability period and that the delayed payments consequently attracted interest under the express terms of the contract. In particular, the Respondent claimed that the final payment of Ksh.11,032,015.84/-, which it alleged fell due on 5th March, 2012, was only paid on 30th June, 2019, approximately eight years later. The Respondent consequently claimed Ksh.9,961,305.81/- as interest calculated at three percentage points above the prevailing Central Bank of Kenya lending rate. 57.In addressing the circumstances in which an appellate court may interfere with a trial court’s findings of fact, the Appellants relied on the authority of Mwanasokoni v Kenya Bus Services Ltd & 3 Others [1985] KECA 131 (KLR), where Hancox, JA stated that an appellate court will only disturb a finding of fact where the finding is based on no evidence, is founded on a misapprehension of the evidence, or where the trial court is shown demonstrably to have acted on wrong principles in reaching the finding. 58.The Appellants submitted that the trial court fell within those circumstances because it misapprehended the evidence and applied wrong legal principles in finding in favour of the Respondent. 59.The Appellants’ principal contention was that the contract did not provide for the payment of interest on delayed retention monies or on the final account in the manner claimed by the Respondent. They argued that the trial court therefore erred in applying Clause 23.3 of the contract to Certificate No. 16, which, in their submission, related neither to retention monies nor to the final account. 60.The Appellants observed that the Respondent had pleaded that the Appellants delayed payment of retention monies after the expiry of the defects’ liability period and that the certified amounts were consequently to earn interest under the express terms of the contract. 61.The Respondent relied on Clause 23.3, which provided that payments were to be adjusted for deductions for retention; that the Employer was to pay the Contractor amounts certified by the Project Manager within 30 days of the date of issue of each certificate; and that, in the event of late payment, the Contractor would be paid simple interest on the late payment in the next payment. The interest was to be calculated on the basis of the number of days delayed at a rate three percentage points above the Central Bank of Kenya’s average base lending rate prevailing on the first day the payment became overdue. 62.The Appellants submitted, however, that the Respondent’s own pleadings disclosed an inconsistency concerning Certificate No. 16. Whereas the Respondent pleaded that the certificate became due for payment on 5th March, 2012, its schedule of certificates stated that Certificate No. 16 was issued on 11th May, 2016. The Appellants argued that the discrepancy was material because, if interest were payable at all, the date from which it could run would depend on the date on which the certificate was issued and became payable. 63.The Appellants further submitted that it was undisputed at the trial that payments under the contract were subject to a 10% retention, which was payable in two moieties. The first half was payable upon issuance of the Certificate of Practical Completion, while the second half was payable upon expiry of the defects’ liability period and certification that the notified defects had been remedied. 64.The Appellants referred to the Respondent’s documentary evidence, including payment vouchers relating to the two portions of the retention monies, the Certificate of Practical Completion dated 9th July, 2011, the Certificate of Making Good Defects dated 15th March, 2012 and the summary statement relating to the sixteenth and final certificate dated 11th May, 2016. They argued that the evidence demonstrated that the outstanding amounts comprised retention monies and final account payments. 65.The Appellants contended that the contract contained a specific provision dealing with retention, namely Clause 26.1. That clause provided that the Employer would retain from each payment due to the Contractor the proportion stated in the Appendix to the Conditions of Contract until completion of the whole of the works; that, upon completion of the works, half of the total amount retained would be repaid; and that the remaining half would be paid upon expiry of the defects’ liability period and certification by the Project Manager that all defects notified to the Contractor had been corrected. 66.The Appellants submitted that Clause 23.3 dealt with payments made during the course of the contract and required deductions for retention to be made from such payments. It did not, however, provide for the payment of interest on retention monies. According to the Appellants, the mode and timing of repayment of the retention monies were specifically governed by Clause 26.1. They therefore argued that the trial court erred by relying on Clause 23.3 to award interest on amounts which were, in substance, retention monies governed by Clause 26.1. 67.The Appellants further submitted that the contract separately provided for payment of the final account under Clause 32.1. That clause required the Contractor to submit to the Project Manager a detailed account of the total amount considered payable under the contract before the end of the defects liability period. 68.The Project Manager was then required to issue a Defects Liability Certificate and certify any final payment due within 30 days of receiving a correct and complete account. Where the account was unsatisfactory, the Project Manager was required to identify the necessary corrections or additions, and, where the account remained unsatisfactory after resubmission, to determine the amount payable and issue a payment certificate. The Employer was required to pay the amount due under the Final Certificate within 60 days. 69.The Appellants argued that Clause 32.1 contained no provision for interest on delayed payment of the final account. Similarly, Clause 26.1 contained no provision for interest on delayed payment of retention monies. Their position was therefore that the Respondent could not rely on Clause 23.3, an unrelated contractual provision, to claim interest on delayed payment of retention monies and the final account. They submitted that the trial court consequently erred in law by importing an interest obligation into the contract where none existed. 70.The Appellants further argued that the manner in which the Respondent presented its claim was confusing and that the confusion led the trial court to make a finding unsupported by the evidence. They referred to the trial court’s statement that “if Certificate No. 16 dated 5th March 2012 remained unsettled after 30 days,” interest would accrue. 71.The Appellants submitted that the evidence, including the Respondent’s own documents and pleadings, showed that Certificate No. 16 was issued on 11th May 2016. They therefore argued that, even if Clause 23.3 were applicable, interest could only have commenced 30 days after 11th May, 2016, and not from 5th March, 2012. The Appellants contended that the trial court consequently applied an erroneous formula in computing the interest awarded. 72.The Appellants submitted that the award of interest for a period preceding the filing of a suit is a matter of substantive law and is subject to established legal principles. They relied on Highway Furniture Mart Limited v Permanent Secretary & Another [2006] 2 EA 94 (CA), where the Court of Appeal adopted the principle stated in New Types Enterprises Ltd v Kenya Achand Insurance Company Ltd [1988] KLR 380 that an award of interest for a period prior to the filing of suit is a matter of substantive law. 73.The Appellants further relied on the principle stated in Mulla, The Code of Civil Procedure, 16th Edition, Volume 1, that antecedent interest is claimable where there is an agreement stipulating the rate of interest, where interest is allowed by mercantile usage which must be pleaded and proved, where there is a statutory right to interest, or where an agreement to pay interest may be implied from the parties’ course of dealing. 74.The Appellants submitted that the Respondent failed to satisfy those requirements because it neither proved an express contractual provision for interest on delayed payment of retention monies and the final account nor established any implied contractual basis for the claim. They argued that the mere existence of Clause 23.3 did not assist the Respondent because, properly construed, that clause did not apply to the payments in question. 75.The Appellants relied on Clement Mwaura Kabingu v Attorney General [2012] eKLR, where the Court held that, in the absence of an express contractual clause providing for interest on retention monies and prescribing a clear rate, a claim for interest could only be pursued within the court’s general jurisdiction to award interest. The Appellants argued that, in the present case, there was similarly no contractual basis for the Respondent’s claim. 76.The Appellants also relied on Taj Mall Limited v Hellen Njambi Mbugua [2019] eKLR, in which the court, citing Telkom Kenya Ltd v Paul Gachanja Ndarua [2012] eKLR, stated that where interest on a principal amount is claimed on account of delayed payment, the claimant must establish that the rate charged was agreed by the parties. 77.The Appellants submitted that, at common law, interest is not payable as a matter of contract unless it has been agreed, subject to specific circumstances such as custom or trade usage. They argued that the Respondent had neither pleaded nor proved any such circumstance. 78.The Appellants further relied on Musicraft Manufacturers (K) Ltd v Doughty Ltd [1992] eKLR, where the court held that, in the absence of an express or implied agreement for the payment of interest or a statutory provision authorising an award of interest on delayed payment, the Plaintiff was not entitled to interest. The Appellants submitted that the same principle applied to the Respondent’s claim, which was not supported by an applicable contractual provision or other legal basis. 79.The Appellants argued that the trial court effectively rewrote the parties’ contract by applying Clause 23.3 to payments governed by Clauses 26.1 and 32.1. They relied on Pius Kimaiyo Langat v Co-operative Bank of Kenya Ltd [2017] eKLR, where the court, after reviewing the relevant authorities, reiterated the settled principle that courts do not rewrite contracts between parties and that parties are bound by the terms of their contracts unless coercion, fraud or undue influence is pleaded and proved. The Appellants submitted that none of those circumstances was alleged or proved in the present case. 80.The Appellants also challenged the evidential basis for the Respondent’s assertion that the Appellants had delayed payment of numerous certificates after the expiry of the defects’ liability period. They submitted that, although the Respondent listed the certificates and their respective dates of payment in the plaint, no evidence was adduced to demonstrate the extent of any delay in payment of those certificates or to establish that interest was contractually payable on them. 81.On the second principal issue, namely whether the trial court erred in awarding Ksh.9,961,305.81/- without the Respondent specifically pleading and proving the interest rate used to arrive at that figure, the Appellants submitted that the claim was in the nature of special damages and was therefore required to be specifically pleaded and strictly proved. They argued that the Respondent merely referred generally to the Central Bank of Kenya lending rates but did not identify the specific rates applied during the relevant period or disclose the precise calculations used to arrive at the sum claimed. 82.The Appellants submitted that Central Bank lending rates are not fixed and may change several times in a year. They therefore argued that the Respondent was required to disclose and prove the applicable rates for the relevant periods. In their view, the Respondent had failed to demonstrate how the figure of Ksh.9,961,305.81/- was calculated. 83.The Appellants relied on Stima Investment Co-operative Society Limited v David Waiganjo Kigwe [2020] eKLR, where the court reiterated the principle under Section 107(1) of the Evidence Act that a party seeking judgement on a legal right or liability dependent on the existence of facts asserted by that party must prove those facts. 84.The Appellants referred to the court’s finding that, where a claimant failed to produce evidence of the published base lending rate applicable at the time of default, the alleged interest rate had not been established. They submitted that the same deficiency existed in the present case because the Respondent did not produce evidence of the Central Bank rates used in its calculation. 85.The Appellants further relied on Taj Mall Limited v Hellen Njambi Mbugua (supra), where the court found that a claim for interest at a specified commercial rate had not been proved because there was no evidence establishing the prevailing commercial rate of interest. The Appellants submitted that the Respondent similarly failed to prove the applicable rates and, consequently, failed to prove the sum of Ksh.9,961,305.81/- on a balance of probabilities. 86.The Appellants additionally contended that the Respondent had waived any right to pursue the claimed interest and was estopped from making the claim by virtue of Section 120 of the Evidence Act. They submitted that the Respondent did not demand interest when the alleged cause of action arose in 2012, when the final certificate was issued in 2016, or when the principal amount was eventually paid in 2019. 87.They argued that the Respondent accepted payment without requesting interest and that no demand letter or other correspondence was produced to demonstrate that interest had been demanded before the institution of the suit. 88.The Appellants further questioned why the Respondent waited nearly three years after receiving payment before pursuing the claim for interest. They also pointed out that, when questioned about the dispute resolution mechanisms provided under Clauses 37 and 38 of the contract, the Respondent stated that the contract had ceased to exist. The Appellants submitted that this explanation did not justify the failure to raise the claim for interest at the material time. 89.In support of the argument on waiver, the Appellants again relied on Taj Mall Limited v Hellen Njambi Mbugua (supra), where the court held that, by accepting late payments without raising the issue of interest, a claimant may waive the right to subsequently claim interest. The Appellants submitted that the Respondent had accepted the delayed payment without protest or demand for interest and had therefore lost the right to pursue the claim at a later stage. 90.The Appellants further challenged the trial court’s conclusion that the Respondent’s evidence was unchallenged. They submitted that the Respondent had been subjected to cross-examination and that the evidence adduced at the trial had been tested. In their view, the contract itself was the starting point in determining the dispute and the trial court was required to interpret and apply its terms. 91.The Appellants argued that the failure to properly analyze the contract and the evidence resulted in findings based on no evidence and improperly shifted the burden of proof to the Appellants. 92.In that regard, the Appellants relied on Monica Wangu Wamwere v Attorney General [2019] eKLR, which cited with approval the decision in Imanyara & 2 Others v Attorney General [2016] KECA 557 (KLR) for the proposition that even where a defendant has not filed a defence or affidavit, or has failed to appear, formal proof proceedings must still be conducted. The claimant must place before the court evidence of the facts asserted, and the trial court has a duty to examine that evidence and satisfy itself that the claim has been proved. The standard of proof in a civil case, namely proof on a balance of probabilities, does not change merely because the opposing party has not produced rebuttal evidence. 93.The Appellants therefore submitted that the Respondent had failed to prove its claim on a balance of probabilities. They maintained that the interest claimed was not contractually payable on the retention monies or final account, that the applicable interest rates were neither specifically pleaded nor proved and that the Respondent had failed to demonstrate how the sum of Ksh.9,961,305.81/- was arrived at. They further contended that the amount awarded was oppressive and exorbitant. 94.The Appellants consequently urged the Court to allow the appeal and set aside the judgment of the trial court. H. The Respondent’s Submissions. 95.On its part, the Respondent submitted that the appeal arose from the judgement of the trial court awarding it Ksh.9,961,305.81/- as interest arising from the delayed payment of Certificate No. 16. It was contended that the certificate, which became due for payment on 5th March, 2012, was not paid until 30th January, 2019, approximately eight years later. 96.The Respondent maintained that the award was properly grounded on Clause 23.3 of the contract, which provided for interest on late payments at a rate of three percentage points above the Central Bank of Kenya’s average base lending rate prevailing on the date the payment became overdue. 97.The Respondent reiterated the principles laid down in Selle & Another v Associated Motor Boat Co. Ltd & Others [1968] EA 123, where the court held that as a first appellate court, this Court was required to reconsider and re-evaluate the evidence before the trial court and draw its own conclusions, while bearing in mind that it had neither seen nor heard the witnesses. 98.On the effect of the Appellants’ failure to call witnesses or produce evidence, the Respondent submitted that the Appellants merely filed a statement of defence but did not call any witnesses or produce documents in support of their case. 99.It was contended that the Respondent, on the other hand, called a witness, produced documentary evidence and proved the delay in payment and the applicable contractual provisions. Relying on Sections 107 and 108 of the Evidence Act, the Respondent submitted that although the initial burden rested upon the party asserting a fact, it had discharged that burden, whereas the Appellants had failed to adduce evidence to rebut the Respondent’s case. 100.The Respondent relied on North End Trading Company Limited (carrying on business under the registered name of Kenya Refuse Handlers Limited) v City Council of Nairobi [2019] eKLR, where the Court held that a party seeking judgement or a declaration of a legal right dependent upon particular facts has a legal obligation to present the evidence reasonably available to establish those facts. It was submitted that the Respondent had discharged that obligation and that its evidence remained uncontroverted. 101.The Respondent further submitted that the Appellants could not rely on their written submissions as a substitute for evidence. Reliance was placed on Attorney General v Mohamed & another (Civil Appeal E113 of 2022) [2024] KEHC 8474 (KLR), which cited Nancy Wambui Gatheru v Peter W. Wanjere Ngugi, Nairobi HCCC No. 36 of 1993, for the proposition that submissions are not evidence but merely serve to focus the court’s attention on the matters requiring determination. 102.The Respondent also relied on Daniel Toroitich Arap Moi v Mwangi Stephen Muriithi & Another [2014] eKLR, where the Court of Appeal held that submissions cannot take the place of evidence and are merely the parties’ advocacy or “marketing language” intended to persuade the court that one case is stronger than the other. 103.The Respondent also cited Avenue Car Hire & Another v Slipha Wanjiru Muthegu, Civil Appeal No. 302 of 1997 (Court of Appeal at Nairobi), for the proposition that judgement cannot be based on written submissions, as submissions are not a mode of receiving evidence under the Civil Procedure Rules. 104.On that point, further reliance was placed on Kenya Alliance Insurance Co. Ltd v Thomas Ochieng Apopa [2020] eKLR and Netah Njoki Kamau & another v Eliud Mburu Mwaniki [2021] eKLR, where the Courts held that an unproved defence was not available for consideration. 105.The Respondent further relied on the case of CMC Aviation Ltd v Crusair Ltd (No. 1) [1987] KLR 103 for the proposition that pleadings are not ordinarily evidence and the averments in pleadings require evidence for their proof, unless expressly or impliedly admitted. 106.The Respondent consequently submitted that the Appellants’ defence and denials remained unproved and that they had failed to rebut the Respondent’s evidence on the delay in payment, the contractual terms governing interest and the amount claimed. It was therefore contended that the trial court properly proceeded on the basis of the evidence before it and did not shift the burden of proof. 107.On whether the contract permitted the payment of interest, the Respondent submitted that Clauses 26.1 and 32.1 did not displace Clause 23.3. It was argued that Clause 26.1, which dealt with retention, merely provided for the withholding and eventual release of retention money, while Clause 32.1 dealt with the procedure for preparation, scrutiny and certification of the final account after the defects’ liability period. According to the Respondent, neither clause addressed the consequences of delayed payment. 108.The Respondent submitted that Clause 23.3, on the other hand, expressly governed payment certificates and provided that the Employer was to pay amounts certified by the Project Manager within 30 days of the issue of each certificate and that, where payment was delayed, interest would be calculated on the basis of the number of days delayed at a rate three percentage points above the Central Bank of Kenya’s average base lending rate prevailing on the first day the payment became overdue. The Respondent contended that the language of the clause was broad and applied to all certified payments, including retention amounts once they became due for payment. 109.It was further submitted that the contractual provisions ought to be read harmoniously and holistically. The Respondent argued that Clause 23.3 dealt with the consequences of delayed payment, whereas Clauses 26.1 and 32.1 dealt with the procedure and conditions governing the release of retention and final payments. Consequently, the absence of a separate interest provision in Clauses 26.1 and 32.1 did not override the express provision for interest contained in Clause 23.3. 110.The Respondent maintained that Certificate No. 16, amounting to Ksh.11,032,015.84/-, became due on 5th March, 2012 but was paid only on 30th June, 2019, and that the delay was not disputed. It was submitted that, under Clause 23.3, interest therefore accrued automatically upon the failure to make payment within the contractual period. 111.In response to the argument that the award of Ksh.9,961,305.81/- was unsubstantiated and exorbitant, the Respondent submitted that the contractual provision itself supplied the applicable formula for calculating interest. The Respondent argued that it was not required to plead the Central Bank of Kenya’s fluctuating rates for every year of the delay because the contract provided an objective formula based on the applicable Central Bank base lending rate. 112.It was submitted that the Court could take judicial notice of the applicable rates or, where necessary, direct a recalculation in accordance with the contractual formula. 113.The Respondent therefore contended that the interest awarded was neither harsh, unconscionable, oppressive nor exorbitant, particularly because it arose from an eight-year delay in payment and was calculated pursuant to an express contractual provision. It was further submitted that the Appellants had not challenged the amount in the trial court. 114.Regarding the contention that the certificate was issued on 11th May, 2016 rather than 5th March, 2012, the Respondent submitted that the obligation to pay had arisen earlier and that the date of 5th March, 2012 was supported by the certificate of making good defects. In the alternative, it was submitted that even if computation were to commence from May, 2016, the delay until payment in June, 2019 would still attract interest under Clause 23.3. 115.On estoppel, the Respondent submitted that the Appellants’ argument that the Respondent had waived its right to interest by failing to issue a demand or by accepting payment of the principal was misconceived. The Respondent distinguished Taj Mall Limited v Hellen Njambi Mbugua (supra) relied upon by the Appellants, on the basis that in that case the claimant sought commercial interest at 29% per annum without contractual or documentary support and had accepted payment in full and final settlement without protest. 116.In the present case, it was submitted, the right to interest was expressly provided for in Clause 23.3, accrued automatically upon delayed payment and did not depend upon a separate demand or proof of external financial arrangements. 117.The Respondent further submitted that the acceptance of the principal sum did not amount to an express waiver of interest and that there was no representation or conduct by which the Appellants were induced to alter their position to their detriment. Reliance was placed on Section 120 of the Evidence Act, which embodies the doctrine of estoppel and precludes a person who, by declaration, act or omission, intentionally causes or permits another to believe a thing to be true and to act upon that belief from subsequently denying its truth. 118.The Respondent relied on Mutech Motors & Civil Engineering Contractors Ltd v County Government of Kirinyaga (Civil Appeal No. 19 of 2018) [2023] KEHC 24813 (KLR), which cited Carol Construction Engineers Limited & another v National Bank of Kenya [2020] eKLR, for the proposition that estoppel by representation or promissory estoppel requires a representation, reasonable reliance, actual reliance induced by the representation, detriment and unconscionability in allowing the representor to resile from the representation. 119.The Respondent submitted that none of those elements had been established because there had been no clear representation that the Respondent intended to waive its contractual right to interest, no evidence that the Appellants relied upon any such representation and no evidence that they had altered their position to their detriment. 120.The Respondent further relied on John Mburu v Consolidated Bank of Kenya [2018] eKLR, for the proposition that estoppel cannot be invoked to disregard express contractual terms unless the conduct relied upon amounts to a legally binding waiver. In that context, reliance was placed on Sita Steel Rolling Mills Ltd v Jubilee Insurance Company Ltd [2007] eKLR, where the Court stated that waiver may arise where a person pursues a course of conduct evincing an intention to waive a right or where the conduct is inconsistent with any other intention than waiver. 121.The Respondent also cited D & C Builders v Sidney Rees [1966] 2 QB 617, for the equitable principle that a party may be precluded from enforcing strict contractual rights where its conduct has led the other party reasonably to believe that those rights would not be enforced and it would be inequitable to permit their subsequent enforcement. 122.The Respondent submitted that no such waiver or representation had been established in the present case. It argued that silence, delay in enforcement or acceptance of the principal sum, without more, did not amount to a deliberate and unequivocal relinquishment of the right to interest. The Respondent maintained that Clause 23.3 created an automatic contractual entitlement to interest and that the commencement of legal proceedings was itself inconsistent with any alleged intention to abandon that right. 123.On whether the Respondent had proved its case, it was submitted that the Respondent called its director, Samwel Odhiambo Akumu, as PW1, who adopted his witness statement and produced documentary evidence in support of the claim. The Respondent contended that the material facts were either undisputed or uncontroverted, including the award of the construction tender, the raising of 16 certificates, the payment of the first 15 certificates and the delayed payment of Certificate No. 16 for Ksh.11,032,015.84/-. 124.The Respondent submitted that the parties were bound by the terms of their contract and that the Court’s role was to interpret and enforce, rather than rewrite, the agreement. Reliance was placed on Pius Kimaiyo Langat v Co-operative Bank of Kenya Ltd (supra), where the Court of Appeal reiterated that courts do not rewrite contracts for parties and that parties are bound by the terms of their agreements unless coercion, fraud or undue influence is pleaded and proved. 125.The Respondent further relied on Housing Finance Company of Kenya Ltd v Njuguna, KLR 1176, as cited in John Mburu v Consolidated Bank of Kenya (supra), for the proposition that courts will not sanction the enforcement of varied contractual terms where one party has purported to alter the agreement without the knowledge or consent of the other party. 126.It also cited Kenya Commercial Finance Co. Ltd v Ngeny & Another (2002) 1 KLR, for the proposition that although courts will generally not interfere with bargains freely entered into at arm’s length, equity may intervene where a bargain is harsh, unconscionable or oppressive, or where additional terms are subsequently imposed upon a party. 127.The Respondent submitted that Clause 23.3 was an express and unvaried term of the parties’ contract and that the Court ought to give it full effect. It contended that the Respondent had proved its case on a balance of probabilities in accordance with Sections 107 and 108 of the Evidence Act, which place the burden of proving asserted facts upon the party seeking judgement and upon the party who would fail if no evidence were adduced by either side. 128.Finally, on costs, the Respondent relied on Section 27 of the Civil Procedure Act and submitted that costs follow the event. It consequently prayed that the appeal be dismissed and that the Respondent be awarded the costs of the appeal. I. Issues For Determination. 129.Having carefully considered the record of appeal, the judgement of the trial court, the grounds of appeal and the rival submissions by the parties, in my respectful view, the following issues arise for determination:a.Whether, on a proper interpretation of the contract and the evidence on record, the Respondent was entitled to interest under Clause 23.3 on the amount allegedly delayed in payment, and whether the Appellants in fact delayed payment of that amount.b.Whether the Respondent specifically pleaded and strictly proved the contractual basis, applicable interest rates and computation supporting the claim of Ksh.9,961,305.81/-.c.Whether, by accepting payment of the principal sum without demanding or reserving its claim for interest, the Respondent waived its right to claim the alleged interest or was estopped under Section 120 of the Evidence Act from pursuing the claim.d.Whether the trial court properly evaluated the evidence and applicable contractual provisions and was justified in entering judgement for the Respondent.e.What orders should be made on the appeal, including the issue of costs. J. Analysis And Findings. 130.The first issue for me to address is whether, on a proper interpretation of the contract and the evidence on record, the Respondent was entitled to interest under Clause 23.3 on the amount allegedly delayed in payment and, if so, whether the Appellants delayed payment of that amount. 131.Notably, the entitlement to interest cannot be determined without first identifying the nature of the amount which the Respondent claimed was delayed in payment and the contractual provision governing its payment. The central question is whether Clause 23.3, properly construed in the context of the contract as a whole, applied to the amount represented by Certificate No. 16. 132.It is common ground that the parties entered into a written contract dated 12th March, 2008 for the construction of 24 Type E flats at Kondele Police Station, Kisumu. The parties were therefore bound by the terms of that contract. 133.The starting point in the interpretation of the contract is the language which the parties themselves chose. A court is not at liberty to rewrite a contract or introduce into it an obligation which the parties did not undertake. The Court of Appeal reiterated this principle in Pius Kimaiyo Langat v Co-operative Bank of Kenya Limited [2017] KECA 152 (KLR), citing the settled rule that courts do not rewrite contracts for parties and that parties are bound by their agreements unless vitiating circumstances such as coercion, fraud or undue influence are pleaded and proved. 134.In the present case, the relevant provisions must be read together. Clause 23.3, as reproduced in the evidence, provided:“Payments shall be adjusted for deductions for retention. The Employer shall pay the Contractor the amounts certified by the Project Manager within 90 days of the date of issue of each certificate. If the Employer makes a late payment, the Contractor shall be paid simple interest on the late payment in the next payment. Interest shall be calculated on the basis of number of days delayed at a rate three percentage points above the Central Bank of Kenya’s average rate for base lending prevailing as of the first day the payment becomes overdue.” 135.The Appellants’ argument is that Clause 23.3 cannot be read in isolation. They point to Clause 26.1, which specifically deals with retention. That clause provides:“The employer shall retain from each payment due to the Contractor the Proportion stated in the Appendix to Conditions of Contract until completion of the whole of the Works. On completion of the whole of the Works, half the total amount retained shall be paid to the Contractor and the remaining half when the Defects Liability Period has passed and the Project Manager has certified that all defects notified to the Contractor before the end of this period have been corrected.” 136.The contract also contains Clause 32.1, which specifically deals with the final account and final payment. It provides:“The Contractor shall issue the Project Manager with a detailed account of the total amount that the Contractor considers payable to him by the Employer under the Contract before the end of the Defects Liability Period. The Project Manager shall issue a Defects Liability Certificate and certify any final payment that is due to the Contractor within 30 days of receiving the Contractor’s account if it is correct and complete. If it is not, the Project Manager shall issue within 30 days a schedule that states the scope of the corrections or additions that are necessary. If the final account is still unsatisfactory after it has been resubmitted, the Project Manager shall decide on the amount payable to the Contractor and issue a Payment Certificate. The Employer shall pay the contractor the amount due in the Final Certificate within 60 days.” 137.The significance of these provisions is that the contract did not treat all payments as one undifferentiated category. It made provision for ordinary payments certified during the execution of the works; it separately provided for the retention of a proportion of those payments and prescribed the circumstances in which the retained sums would be released; and it separately prescribed the procedure for preparation, certification and payment of the final account. 138.In my view, Clause 26.1 is a specific provision governing the retention monies. It determines both the fact of retention and the time at which the two portions of the retained amount become payable. The first moiety is payable upon completion of the whole of the works, while the second is payable after the defects liability period has expired and the Project Manager has certified that the notified defects have been corrected. The clause does not provide for interest where payment is delayed after those conditions have been satisfied. 139.Likewise, Clause 32.1 is a specific provision governing the final account. It establishes the process through which the Contractor submits the account, the Project Manager considers and certifies it and the Employer pays the amount due under the Final Certificate within 60 days. Again, the clause does not stipulate that interest shall accrue upon failure to pay the final account within that period. 140.The Respondent’s argument is that Clause 23.3 should nevertheless be read as applying to all certified payments, including retention and final account payments once they become due. I accept that contractual provisions should, where reasonably possible, be read harmoniously rather than in isolation. However, harmonious interpretation does not mean that a general provision should automatically override or absorb specific provisions dealing with distinct categories of payment. 141.The question is not whether Clause 23.3 contains words capable of being given a broad meaning. The question is what the parties intended when the provisions are read together. Clause 23.3 speaks of amounts certified by the Project Manager and of payment within the stipulated period from the date of issue of “each certificate”. Clause 26.1, on the other hand, specifically regulates the release of retention. Clause 32.1 specifically regulates the final account and Final Certificate. In my view, the more specific provisions must be given their intended effect. 142.I therefore find that the mere fact that an amount may ultimately be certified or included in a certificate does not, without more, make Clause 23.3 applicable to every payment arising under Clauses 26.1 and 32.1. The Respondent had to demonstrate, from the contract and the evidence, that the particular amount claimed as the basis of the interest claim was a payment falling within Clause 23.3 rather than retention or final account monies governed by the specific provisions. 143.The evidence before the trial court did not satisfactorily resolve that question. Indeed, the Respondent’s own case was not entirely consistent as to the character and date of the amount claimed. The plaint stated that Certificate No. 16 became due for payment on 5th March, 2012. However, the Respondent’s documentary evidence and the evidence referred to by the Appellants identified the summary statement relating to the sixteenth and final certificate as dated 11th May, 2016. 144.That inconsistency was material. It was not a mere discrepancy in an incidental date. The date on which the amount became due was central to the claim because the interest was calculated by reference to the number of days of delay. If the relevant certificate was issued on 11th May, 2016, it could not simply be assumed that interest began running from 5th March, 2012 without a proper evidential and contractual basis for that conclusion. 145.The trial court accepted the Respondent’s assertion that Certificate No. 16 became due on 5th March, 2012 and proceeded to find that interest accrued because payment was made approximately eight years later. In my view, that conclusion did not sufficiently reconcile the Respondent’s pleaded case with the documentary evidence regarding the date of the final certificate and the operation of Clauses 26.1 and 32.1. 146.I also do not accept that the absence of evidence from the Appellants amounted to an admission of the Respondent’s interpretation of the contract. The Respondent bore the legal burden of proving the facts upon which its claim depended. Sections 107(1) and 108 of the Evidence Act place that burden upon the party asserting the facts and upon the party who would fail if no evidence were given by either side. 147.The decision in Stima Investment Co-operative Society Limited v David Waiganjo Kigwe [2020] KEHC 9099 (KLR), relied upon by the Appellants, is instructive on the evidential burden in a claim for contractual interest. There, the Court held that where the agreed rate was expressed by reference to a published base lending rate, the claimant still had to prove the applicable published rate at the time of default. The absence of such evidence made it impossible to ascertain the interest payable. 148.The principle in Stima Investment does not mean that the failure of a defendant to call evidence is irrelevant. It means that the claimant must first establish the legal and factual foundation of the claim. In the present case, the Respondent was required to establish, first, the contractual basis of the entitlement; second, the date upon which the amount became due; and third, the period of delay to which the contractual formula was to be applied. 149.I therefore find that the Respondent did not satisfactorily establish that the amount represented by Certificate No. 16 was a payment to which Clause 23.3 applied, as opposed to retention monies and/or final account monies governed by Clauses 26.1 and 32.1. It also did not satisfactorily establish the date from which the alleged delay was to be computed. 150.The first issue is consequently answered in favour of the Appellants. The Respondent did not establish a contractual entitlement to the interest awarded under Clause 23.3 on the amount claimed. 151.The second issue for determination is whether the Respondent specifically pleaded and strictly proved the contractual basis, applicable interest rates and computation supporting its claim of the pleaded amount. 152.Turning to this issue, the Respondent claimed the specific sum of Ksh.9,961,305.81/- as interest. It pleaded that the amount had been calculated at three percentage points above the applicable Central Bank of Kenya lending rates. The question is whether that assertion was sufficient proof of the amount claimed. 153.The answer must be in the negative. The contractual formula did not stipulate a fixed numerical rate. It stipulated a variable rate, namely three percentage points above the Central Bank of Kenya’s average base lending rate prevailing when the payment became overdue. The applicable rate was therefore a fact which required proof. 154.The Respondent was not necessarily required to reproduce every historical Central Bank rate in the body of the plaint. However, having claimed a specific sum based on a variable contractual formula, it was required to place before the court sufficient evidence to demonstrate the rates applied, the period to which each rate applied, the principal amount upon which interest was calculated and the resulting computation. 155.The reasoning in Stima Investment (supra) is directly relevant. The Court held that where the contractual rate was expressed as a margin above a published base lending rate, the claimant had to prove the published rate applicable at the time of default. Without that evidence, the court could not ascertain the amount payable. 156.The same principle applies here with even greater force because the alleged period of delay extended over several years and the applicable Central Bank lending rate was not necessarily constant throughout that period. The Respondent could not simply state that it had applied the relevant rates and invite the court to accept the resulting figure without demonstrating the underlying calculation. 157.The Appellants also relied on Highway Furniture Mart Limited v Permanent Secretary, Office of the President & Another [2006] KECA 190 (KLR), where the Court of Appeal reiterated, with reference to New Types Enterprises Ltd v Kenya Achand Insurance Company Ltd [1988] KLR 380, that interest for the period before the filing of suit is a matter of substantive law. The point is important because the Respondent’s claim was for interest accruing before the suit was filed and therefore required a legal foundation independent of the court’s general discretion under Section 26 of the Civil Procedure Act. 158.In the present case, that legal foundation was said to be Clause 23.3. However, as already found, the Respondent did not establish that Clause 23.3 applied to the particular amount claimed. The claim therefore failed at the level of legal entitlement even before the question of mathematical proof was reached. 159.Further, even if Clause 23.3 were assumed to apply, the Respondent still failed to establish the amount of Ksh.9,961,305.81/-. No sufficient evidence was placed before the trial court demonstrating the specific Central Bank rates applied during the relevant period or showing how the claimed amount was derived from those rates. 160.The Respondent submitted that the court could take judicial notice of the applicable rates or order a recalculation. I am unable to accept that submission in the circumstances of this case. The court’s function was to determine the claim presented on the evidence before it. It was not for the court to reconstruct the claimant’s case by independently researching a series of historical rates and then creating a calculation which the claimant had not proved. 161.Nor would an order for recalculation be appropriate where the underlying contractual entitlement itself has not been established. A recalculation may be appropriate where liability is established but there is an arithmetical error or an easily ascertainable figure remains to be determined. That is not the situation here. 162.The decision in Stima Investment (supra) is therefore distinguishable from the Respondent’s position not in principle but in result. The principle applied there supports the conclusion that the Respondent had the burden of proving the variable rate upon which its specific claim was based. That burden was not discharged. 163.The second issue is accordingly answered in favour of the Appellants. The Respondent neither established the contractual basis of the claimed interest nor strictly proved the rates and computation supporting the sum of Ksh.9,961,305.81/-. 164.The third issue that I will address is whether the Respondent waived its right to claim interest or was estopped under Section 120 of the Evidence Act. 165.The Appellants contended that the Respondent waived its right to claim interest, or was estopped from pursuing the claim, because it accepted payment of the principal sum without demanding interest and waited before instituting proceedings. The Respondent denied that its conduct amounted to waiver or estoppel. 166.Section 120 of the Evidence Act provides, in substance, that where one person has, by declaration, act or omission, intentionally caused or permitted another person to believe a thing to be true and to act upon that belief, neither that person nor his representative shall be allowed to deny the truth of that thing in proceedings between them. 167.The doctrine of estoppel is therefore not established merely by showing silence or delay. The conduct relied upon must, in the circumstances, amount to a representation or conduct which reasonably induced reliance and upon which the other party acted. The Respondent relied on authorities emphasizing the need for representation, reliance, detriment and unconscionability before estoppel can arise. 168.I agree with that general proposition. The mere acceptance of the principal amount does not automatically amount to a waiver of a separate contractual claim for interest. Equally, the mere fact that a claimant did not immediately demand interest does not necessarily extinguish an otherwise established contractual right. 169.The Appellants relied on Taj Mall Limited v Hellen Njambi Mbugua (supra) and argued that the Respondent’s conduct was inconsistent with an intention to claim interest. The Respondent sought to distinguish that authority on the basis that the claim there was for commercial interest unsupported by a contractual provision. 170.In my view, it is unnecessary to determine conclusively whether the Respondent waived its right to interest or was estopped from pursuing it. The claim fails on the more fundamental grounds already identified, that the Respondent did not establish the applicability of Clause 23.3 to the amount claimed and did not prove the sum awarded. 171.I would nevertheless add that, had a contractual entitlement to interest been clearly established, the mere acceptance of the principal sum would not, without more, necessarily constitute waiver. Waiver requires conduct sufficiently clear and unequivocal to demonstrate an intention to abandon a known right. On the evidence summarized before this Court, I would not find waiver or estoppel solely from the fact of acceptance of the principal payment. 172.The third issue is therefore answered in favour of the Respondent, but that conclusion does not affect the result of the appeal. The Respondent’s failure to establish waiver or estoppel does not cure its failure to prove the contractual entitlement and amount claimed. 173.The fourth issue concerns the trial court’s evaluation of the evidence and the resulting judgement. As a first appellate court, this Court is required to reconsider and re-evaluate the evidence and draw its own conclusions, while bearing in mind that it did not see or hear the witnesses testify (see above Selle v Associated Motor Boat Co. Ltd and Peters v Sunday Post Limited). 174.I have undertaken that exercise. I accept that the Respondent proved that the parties entered into the construction contract and that the Respondent performed the works. I also accept that the Appellants ultimately paid the principal amount which the Respondent claimed had been delayed. 175.However, those findings did not, by themselves, establish the Respondent’s entitlement to the separate sum of Ksh.9,961,305.81/-. The claim for interest was a distinct claim requiring proof of its own contractual and evidential foundation. 176.The trial court placed considerable emphasis on the fact that the Appellants did not call witnesses and concluded that the Respondent’s evidence was unchallenged. That approach was erroneous to the extent that it treated the absence of defence evidence as relieving the Respondent of its burden to prove the claim. 177.It is correct that submissions are not evidence. The Respondent relied on that principle in citing, among others, Daniel Toroitich Arap Moi v Mwangi Stephen Muriithi & Another [2014] eKLR. The proposition is uncontroversial. But the same principle operates in favour of the Appellants, in that the Respondent’s evidence had to establish the claim, and the court was required to examine that evidence rather than assume that the absence of rebuttal evidence established the claim. 178.The trial court also did not sufficiently address the relationship between Clauses 23.3, 26.1 and 32.1. It was necessary to determine the precise character of the payment claimed and then determine which contractual provision governed that payment. Instead, the court proceeded on the basis that the existence of delayed payment automatically triggered Clause 23.3. 179.In my view, that was a material misapprehension of the contract. The fact that the contract provided for interest on a particular category of late payment did not mean that interest was payable on every sum which might at some stage be certified under the contract. The court was required to determine whether the amount claimed fell within the scope of Clause 23.3. 180.The trial court further failed to satisfactorily resolve the conflict between the date of 5th March, 2012 pleaded as the date when Certificate No. 16 became due and the evidence referring to the final certificate or final account as having been issued on 11th May, 2016. That conflict was central to the calculation of the alleged interest. 181.The Court of Appeal’s decision in Mwanasokoni v Kenya Bus Services Ltd & 3 Others [1985] KECA 131 (KLR), relied upon by the Appellants, states the well-established circumstances in which an appellate court may interfere with a finding of fact, including where the finding is based on no evidence, is founded on a misapprehension of the evidence or where the trial court is shown to have acted on wrong principles. The present case falls within those principles because the trial court did not properly reconcile the contractual provisions and material evidence before concluding that the Respondent had established its entitlement. 182.The fourth issue is therefore answered in favour of the Appellants. The trial court was not justified in entering judgement for the Respondent in the sum of Ksh.9,961,305.81. 183.I will now proceed to address the issue of arbitration and the jurisdiction of the trial court, which I raise sua sponte. Although the issue of arbitration was not specifically raised as a ground of appeal, it was considered by the trial court and was addressed in the parties’ submissions. I therefore consider it appropriate to address it briefly, particularly because the contract contained provisions for the notification and referral of disputes to arbitration. 184.The existence of an arbitration clause does not, by itself, automatically deprive a court of jurisdiction over proceedings instituted before it. The relevant statutory mechanism is Section 6(1) of the Arbitration Act. It provides that a court before which proceedings are brought in a matter which is the subject of an arbitration agreement shall, if a party so applies not later than the time when that party enters appearance or otherwise acknowledges the claim against which the stay is sought, stay the proceedings and refer the parties to arbitration, subject to the statutory exceptions. 185.The statutory language is important. The court is to act upon an application by a party seeking a stay and referral to arbitration. The existence of the arbitration agreement does not require the court, of its own motion, to halt proceedings and refer the matter to arbitration in the absence of the procedure prescribed by Section 6 of the Arbitration Act. 186.In the present case, the Appellants entered appearance, filed a joint statement of defence and participated in the proceedings before the trial court. They did not, at the appropriate stage, apply for a stay of the proceedings and referral of the dispute to arbitration in accordance with Section 6 of the Arbitration Act. 187.The consequence is that the trial court was properly seized of the matter. The Appellants could not simply participate in the court proceedings and, without having sought the statutory stay and referral, rely on the existence of the arbitration clause as depriving the trial court of jurisdiction. 188.The position is consistent with the statutory scheme, which requires an application for stay not later than the time when the party enters appearance or otherwise acknowledges the claim. The High Court has similarly recognized that Section 6 prescribes the procedure to be followed where proceedings are brought before a court notwithstanding an arbitration agreement. 189.In the case of Ventra Locomotives v Kenya Railways Corporation [Civil Suit E009 of 2022] [2025] KEHC 10836 [KLR] [3 July 2025] [Ruling], I had the opportunity of addressing the same issue and the decision that I reached on the same was that where a suit has been filed and a party wishes to invoke an arbitration clause, the application for stay of proceedings must be filed not later than the time of filing the memorandum of appearance and that an application that seeks stay of proceedings and reference to arbitration that is filed after the entry of appearance is incompetent. 190.I therefore find that the trial Magistrate was properly seized of the dispute and was entitled to hear and determine it. The arbitration clause did not, in the circumstances of this case, invalidate the proceedings before the trial court. K. Disposition And Orders. 191.What orders should then be made on the appeal, including costs? The appeal succeeds on the principal issues. The Respondent did not establish that the amount claimed was subject to interest under Clause 23.3. The Respondent also failed to satisfactorily establish the date upon which the amount became due and failed to specifically and strictly prove the variable rates and computation supporting the claim of Ksh.9,961,305.81/-. 192.The finding that the Respondent was not estopped from pursuing the claim does not alter that conclusion. The issue of waiver or estoppel is distinct from the question whether the Respondent proved the contractual entitlement in the first place. It did not. 193.In the result, the appeal is allowed. The judgement and decree of the trial court awarding the Respondent Ksh.9,961,305.81/-, together with interest and costs, are hereby set aside. The Respondent’s suit before the trial court is dismissed. 194.On the issue of costs, Section 27 of the Civil Procedure Act vests the Court with discretion in determining by whom and to what extent the costs of any proceedings are to be paid. While the general principle is that costs follow the event, the Court may, for good reason, depart from that principle. 195.The Appellants have succeeded in this appeal and the Respondent’s suit has been dismissed. I have considered the circumstances of the case and find no sufficient reason to depart from the general rule. Accordingly, the Respondent shall bear the costs of the suit before the trial court and those of this appeal. 196.It is so ordered. 197.This file is hereby closed. DELIVERED (VIRTUALLY), DATED & SIGNED THIS 17TH DAY OF JULY, 2026.JOE M. OMIDOJUDGEFor Appellants: Ms. Jumma, State Counsel.For Respondent: Mr. M.m. Omondi, Advocate.Court Assistants: Mr. Ngoge & Mr. Juma.