[2022] KEHC 12232 (KLR)

Mjomba & 3 others v Information and Communications Technology Authority (Miscellaneous Application E115 of 2021) [2022] KEHC 12232 (KLR) (Civ) (21 July 2022) (Judgment)

Neutral citation: [2022] KEHC 12232 (KLR)

Republic of Kenya

In the High Court at Nairobi (Milimani Law Courts)

Civil

Miscellaneous Application E115 of 2021

JK Sergon, J

July 21, 2022

Between

Magdalene M Mjomba

1st Plaintiff

Kwame S Shiroya

2nd Plaintiff

Zablon M’Ringeera

3rd Plaintiff

Antony K Mugambi

4th Plaintiff

and

Information and Communications Technology Authority

Defendant

Judgment

1. The four plaintiffs entered into individual contracts for consulting services with the respondent. The four separate contracts were signed as follows:-1. Magdalene M Mjomba – April 2, 20182. Kwame S Shiroya – July 1, 20193. Zablon M’Ringera – July 1, 20184. Anthony K Mugambi – July 1,2017

2. The contract for the 1st claimant was for Kshs 13,912,040 and was to run from April 2, 2018 for a period of 36 months and terminate on April 1, 2021. The contract for the 2nd claimant, Kwame Shiroya was to run for the same period of 36 months from July 1, 2019 terminating on June 30, 2021. The contractual sum is indicated as Kshs 20,407,270/-. The third contract for Zablon M’Ringera was to run for 36 months from July 1, 2018 upto June 30, 2021. The contractual sum is stated as Kshs 25,446,070/-. The fourth contract is for the 4th claimant, Anthony Mugambi. It was for the period starting from July 1, 2017 upto June 30, 2020. The contractual sum is indicated as Kshs 31,786,790/-.

3. The dispute was brought to court by way of a miscellaneous application which sought to have the court appoint an arbitrator in terms of Clause 13 of the respective agreements. Before coming to court, the claimants on November 23, 2020 wrote to the Chairman of the Chartered Institute of Arbitrators asking him to appoint an Arbitrator for the dispute. On December 4, 2020, the Chairman of the Chartered Institute of Arbitrators responded to the request and stated that the dispute resolution clause was silent on the appointing authority. The letter partly reads as follows:-“Having reviewed your request, it is at the discretion of the parties to review the Clause and resolve in writing on the Appointing Authority, failure of the parties to mutually agree on the above, you may seek assistance of the Court to vest such appointing authority on the Chairman of Chartered Institute of Arbitrators.”

4. On September 30, 2021 this court rendered its ruling in relation to the claimants’ Notice of Motion dated March 9, 2021 and urged the parties to pursue the arbitration process. Subsequently by consent of both parties the court was urged to determine the dispute and rely on the pleadings and submissions already filed. I wish to state at the outset that the information provided is quite scanty. It is not clear whether there was any part payment made to the claimants and whether periodic reports were provided to the respondent as per the contracts.

5. The source of the dispute is the decision by the respondent to terminate the contracts. On September 3, 2019, the Chief Executive Officer of the respondent, Dr Katherine W Getau, EBS wrote individual letters to the four claimants terminating the consulting services. The wording of all the letters is similar. The termination letter reads as follows:-“Magdalene Majala Mjomba,C/O P O Box 58353-00200,NAIROBIDear Madam,RE: Termination Of Contract For Consulting ServicesThe above subject matter refers.The ICT Authority (Authority) entered into a contract with yourself for three (3) years with effect from April 2, 2018 as part of the IBRD/IDA financed project, East Africa Regional Transport, Trade and Development Facilitation Program (EARTTDFP).The Board of Directors in its meeting held on August 30, 2019 reviewed the services provided under the Contract. The services are no longer required for the above named project.Consequently, the Authority hereby issues notice of its intention to terminate the contract on expiry of 30(thirty) days from the date of this letter as provided under Clause 14(d) of the Contract.Kindly note that in line with Clause 8 of the Contract you are expected to hand over all studies, reports or other material, graphic, software of otherwise prepared for the Authority under the Contract.We wish you all the best in your future endeavours.Yours faithfullyDr Katherine W Getao, EBSChief Executive Officer”

6. There is no dispute that parties entered into the respective consultancy services contracts. It is also not disputed that the contracts were terminated. The submissions by the parties only dealt with the issue as to whether the matter should be referred to arbitration or not. The parties have neither pleaded nor submitted on the dispute resulting from the breach of the consultancy agreement. It is a well settled principle of law that parties are bound by their pleadings. This legal position was reaffirmed by the Court of Appeal in the case of David Sironga Ole Tukai V Francis Arap Muge & 2 Others Civil Appeal No 76 Of2014 [2014] eKLR thus;“In an adversarial system such as ours, parties to litigation are the ones who set the agenda, and subject to rules of pleadings, each party is left to formulate its own case in its own way. And it is for the purpose of certainty and finality that each party is bound by its own pleadings. For this reason, a party cannot be allowed to raise a different case from that which it has pleaded without due amendment being made. That way, none of the parties is taken by surprise at the trial as each knows the other’s case is as pleaded. The purpose of the rules of pleading is also to ensure that parties define succinctly the issues so as to guide the testimony required on either side with a view to expedite the litigation through diminution of delay and expense.”

7. The rules of procedure with regards to institution of a suit and pleadings are also very clear on how a suit ought to be instituted. Order 3 Rule 1 (1) of the Civil Procedure Rules, 2010provides that;“Every suit shall be instituted by presenting a plaint to the Court, or in such other manner as may be prescribed.”

8. While Order 3 Rule 2 of the Civil Procedure Rules provides;All suits filed under rule 1(1) including suits against the government, except small claims, shall be accompanied by—the affidavit referred to under Order 4 rule1(2);a.a list of witnesses to be called at the trial;b.written statements signed by the witnesses excluding expert witnesses; andc.copies of documents to be relied on at the trial including a demand letter before action:d.Provided that statement under sub rule (c) may with leave of court be furnished at least fifteen days prior to the trial conference under Order 11.

9. The court, on its part, is bound by the pleadings of the parties. The duty of the court is to adjudicate upon the specific matters in dispute, which the parties themselves have raised by their pleadings. A court will only have the jurisdiction to hear, determine or thereafter grant orders or prayers which have been specifically pleaded and proved. This was the reasoning of the Court of Appeal in the case of Caltex Oil (kenya) Limited V Rono Limited [2016] eKLR when it opined that;“…pleadings are a shield and a sword for both sides. They have the potential of informing each party what they expect in the trial before the court…The pleadings are a precursor for a party to lead evidence in satisfaction of the prayers he seeks to be granted in his favour.”

10. Counsel for both parties urged the court to arbitrate on the matter and render its decision on the dispute. The source of the relationship is the agreements entered into between the parties. I do find that the applicants are seeking to be paid the balance of their respective contractual period while on the other hand the respondent is of the view that the applicants’ services were no longer required. In view of the consent between the parties seeking a solution on the dispute from the court, I do find that the applicants had legitimate expectation to the effect that they were engaged by the respondent to render services for the periods as per the contracts. There is a termination clause 14 which at paragraph 14(d) states that the client in its sole discretion and for any reason whatsoever can decide to terminate the contract. Apart from that provision, the client could only terminate the contract as per the provisions of cause 14 (a), (b) and (c) which in my view did not occur. The termination was entirely unilateral and no dispute had arisen between the parties. The termination letter does not indicate the reason for the cancellation and only refers to a meeting of the Board of Directors.

11. The documentation show that the Government of Kenya had received financing from the International Development Association (IDA) towards the cost of the Eastern Africa Regional Transport, Trade and Development Facilitation Project. The applicants were recruited to undertake some work as part of the project. It is not clear why the respondent opted to terminate the services.

12. Since the plaintiffs rendered services and there was no dispute relating to their respective engagement, I do find that the termination was uncalled for, illegal and arbitrary. The respondent ought to have discussed the issue with the plaintiffs and reach an amiable solution. Had the parties engaged each other, a middle ground would have been reached. The plaintiffs requested to have the matter referred to arbitration but this proposal was approved by the defendant.

13. I do find that each of the applicants is entitled to his/her remuneration for the contracted period less what had already been paid. The defendant is entirely to blame for the termination of the contract. The respondent in its termination letter called for reports and materials prepared by the plaintiffs for the defendant. Since the termination was abrupt it would be difficult to quantify the applicants’ work on monthly basis. It is possible that the applicants had gathered enough information and were preparing their reports. The respondent is to blame for the termination. The 4th plaintiff’s contract had run for over two (2) years.

14. In view of the fact that there is no claim for damages for the termination, I do award each of the plaintiffs what was payable under the terms of the contract less what was paid. In the end, judgment is entered for the plaintiffs as follows:-i.Magdalene M Mjomba – Kshs 13,912,040 less amounts already paid and recoverable taxes.ii.Kwame S Shiroya – Kshs 20,407,270 less amount already paid plus recoverable taxes.iii.Zablon M’Ringera – Kshs 25,446,070 less amount already paid plus recoverable taxes.iv.Anthony K Mugambi - Kshs 31,786,790 less amount already paid plus recoverable taxes.v.The plaintiffs shall have costs of the claim.

DATED, SIGNED AND DELIVERED ONLINE VIA MICROSOFT TEAMS AT NAIROBI THIS 21ST DAY OF JULY, 2022. .............................J K SERGONJUDGEIn the presence of:……………………………. for the 1st Plaintiff……………………………. for the 2nd Plaintiff……………………………. for the 3rd Plaintiff……………………………. for the 4th Plaintiff……………………………. for the Defendant