https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/7648

Serena Hotels v Little Five Tours Ltd & another (Civil Appeal E426 of 2025) [2026] KEHC 7648 (KLR) (2 June 2026) (Judgment) Neutral citation: [2026] KEHC 7648 (KLR) Republic of Kenya In the High Court at Nairobi (Milimani Law Courts) Civil Appeal E426 of 2025 AN Ongeri, J June 2, 2026 Between Serena Hotels Appellant and Little Five Tours Limited 1st Respondent Gideon Kiluma Musumba 2nd Respondent (Being an Appeal from the Judgment of the Chief Magistrates Court Hon Selina N Muchungi (SRM) delivered on March 11, 2025 in MCCC E6646 of 2020) Judgment 1.The 1st and 2nd Respondents (who were the 1st and 2nd Plaintiffs) filed an amended plaint seeking in Milimani Commercial Civil Case No. E6646 of 2020, in which they were seeking the following;i.General and exemplary damages for loss of business.ii.General damages for damage to both respondent’s' business reputation.iii.General and exemplary damages for the malicious and unlawful detention of the 2nd Respondent.iv.Costs and interest. 2.The cause of action arose from a long-term, decade-long commercial relationship between Little Five Tours Limited, acting as the first respondent, and Serena Hotels, the appellant, wherein the first respondent regularly partnered with the appellant to secure accommodation and hospitality services for its international clientele. 3.The specific dispute arose from a travel itinerary organized in 2018 for an agency from New Zealand known as the Maher Group, scheduling a fifteen-night tour for the year 2019. 4.For this tour, the first respondent reserved ten rooms across five of the appellant's accommodation properties spread through Kenya and Tanzania. 5.The appellant generated pro forma invoices totaling 1,480,675.00 Kenya Shillings and 16,524.00 US Dollars. 6.On May 6, 2019, the first respondent fully settled the Kenya Shilling invoice and made a partial foreign currency payment of 9,324.00 US Dollars, leaving an outstanding balance of 6,800.00 US Dollars which both parties mutually agreed would be finalized before the international tour group departed the region. 7.The escalation occurred on June 20, 2019, during the tenth night of the excursion, while the tourist group was staying at the Kirawira Serena property located in the Serengeti region of Tanzania. 8.The 2nd Respondent testified that while on the tour in Tanzania with clients, the hotel manager at the Kirawira Serena Camp (a facility of the Appellant, originally the 1st Defendant) confronted him with Tanzanian police, demanding payment of alleged outstanding debts (USD 2,600 from 2018 and USD 6,800 from the current tour). 9.He was threatened with arrest and detention if he did not pay. He was subsequently arrested, detained at a police station for two days, and then held at the hotel camp for a further four days (six days total) under police guard. 10.He was only released after family and friends raised Kshs. 300,000 and he was forced to sign an undertaking to pay the balance. He lost the New Zealand client (Maher Group) as a result. 11.Without any prior formal communication, notification, or demand, the hotel management at Kirawira Serena confronted the second respondent and abruptly demanded the immediate payment of the current 6,800.00 US Dollar balance alongside an additional 2,600.00 US Dollars for an alleged, unnotified historical debt from 2018. 12.The hotel management issued a severe ultimatum, stating that neither the respondents nor their international clients would be permitted to leave the premises unless these sums were instantly cleared. 13.The respondents vehemently contested owing any prior debts to the appellant, noting that no statements or demands had ever been sent regarding an outstanding balance from past operations. 14.The trial court, in analyzing the case brought by the respondents, determined that these heavy-handed actions resulted in an actionable wrong. 15.The appellant argued that the trial court erroneously interpreted the pleadings as a breach of contract rather than focusing purely on the tort of unlawful arrest and detention, the trial magistrate ultimately found the appellant liable for the incident. 16.Furthermore, the trial court dismissed the appellant's jurisdictional and procedural assertions, including arguments raised under the doctrine of forum non conveniens regarding the fact that the actual confrontation and detention took place outside Kenya at a Tanzanian facility, and assertions that the local Tanzanian entities or authorities were the proper parties to be sued rather than the main hotel group. 17.Consequently, the trial magistrate entered judgment in favor of the respondents, finding that the forced detention at the hotel property was malicious, unlawful, and deeply damaging to the professional standing and business operations of the tour company. 18.The trial court made the following findings and orders;i.The court found that the 2nd Respondent’s arrest and detention were malicious and wrongful.ii.THAT there was no warrant of arrest or court order.iii.THAT there were no criminal charges were ever preferred against the 2nd Respondent.iv.THAT the debt was a civil debt owed by the 1st Respondent (a company), and the 2nd Respondent (a director) should not have been forced to settle it under the doctrine of corporate separateness.v.THAT the Appellant misused police powers to collect a civil debt. 19.To remedy these wrongs, the trial court assessed and awarded a sum of 2,500,000.00 Kenya Shillings as general damages to compensate the respondents for the direct loss of business, commercial disruption, and severe degradation of their international corporate reputation among overseas travel agencies. 20.In addition to general damages, the trial magistrate determined that the appellant's oppressive conduct during the safari tour warranted a punitive lesson, thereby awarding an additional 1,500,000.00 Kenya Shillings in exemplary damages directly to the second respondent to address the distress and humiliation suffered during the unlawful detention. 21.The appellant was also ordered to pay the full legal costs of the suit, bringing the total trial judgment to an aggregate of 4,000,000.00 Kenya Shillings plus interest and costs. 22.The appellants have appealed against the said judgments on the following grounds;i.THAT the Trial Court made an error in fact and law by misinterpreting the claim as a breach of contract, whereas the Respondents had actually based their case on the tort of unlawful arrest and detention.ii.THAT the Trial Court erred in law by claiming jurisdiction over an alleged unlawful arrest and detention that took place in Tanzania, completely failing to consider the of forum non conveniens .iii.THAT the Trial Court erred in law and fact by failing to recognize that the Appellants/Defendants were not the correct parties to the dispute, given that the alleged arrest and detention were carried out by Tanzanian authorities.iv.THAT the Trial Court erred in law and fact by awarding Kshs. 2,500,000 as general damages for loss of business, ignoring the legal principle that business losses are special damages which must be specifically pleaded and proven.v.THAT the Trial Court erred in law by awarding the Kshs. 2,500,000 for loss of business despite the claim not being supported by any evidence.vi.THAT the Trial Court erred in law and fact by awarding an extra Kshs. 1,500,000 as exemplary damages without any evidence, proof of exceptional circumstances, or specific allegations against the Appellant's conduct to justify it.vii.THAT the Trial Court erred in law by granting the Respondents manifestly excessive damages in the complete absence of evidentiary material. 23.The parties filed written submissions as follows; The Appellants submitted that they are contesting the judgement delivered on March 11, 2025, by the Chief Magistrate’s Court, where the trial court awarded Little Five Tours Limited and Gideon Kiluma Musimba Kshs. 2,500,000 in general damages for loss of business and reputation, alongside Kshs. 1,500,000 in exemplary damages. 24.The Appellants seek to overturn this decision based on several core contentions regarding the nature of the claim, the trial court’s territorial jurisdiction, the proper parties to the suit, and the legal sustainability of the awarded damages. 25.The Appellants argue that the trial court severely misconstrued the actual cause of action by treating it as a contractual dispute. 26.They assert that no credit or formal agreement regarding repayment terms existed between the parties, and none was ever produced during the trial. 27.The Appellants maintain that the Respondents introduced conflicting narratives as a stratagem to cloak the trial court with jurisdiction where none rightfully existed. 28.When stripped of these contractual issues, the only legitimate cause of action arising from the facts is a claim in tort for unlawful and forceful detention. 29.Building upon the argument that the claim is purely tortious, the Appellants contend that the trial court completely lacked territorial jurisdiction over the matter. 30.According to the Civil Procedure Act, territorial jurisdiction is determined by where the cause of action arises or where the defendant resides. In this case, the underlying arrest and subsequent six-day detention of the second Respondent occurred entirely at the Kirawira Serena Camp and the Bunda Police Station within the sovereign territory of Tanzania. 31.Invoking the doctrine of forum non conveniens, the Appellants submit that Kenyan courts are not the appropriate forum because the dispute has its most real and substantial connection with Tanzania. 32.They assert that the trial court erroneously assumed jurisdiction over actions that took place beyond the geographical reach of Kenyan law. 33.Furthermore, the Appellants argue that the trial court erred by failing to recognize that the Tanzanian authorities, rather than the Appellants, were the proper parties to the dispute. 34.In tort law, liability for unlawful detention or false imprisonment attaches strictly to the party or public authority that directly enforces or legally authorizes the restraint of liberty. 35.While a manager at the Appellants' Tanzanian affiliate did lodge a formal complaint regarding an outstanding debt, the actual arrest and physical detention were sovereign acts executed exclusively by the Tanzanian police. 36.The Appellants hold no coercive state power and they maintain that any alleged liability rests solely with the law enforcement authorities of the United Republic of Tanzania. 37.Finally, the Appellants challenge the damages awarded to the Respondents as legally unsustainable and wholly unsupported by evidence. 38.They argue that the award of Kshs. 2,500,000 for loss of business is effectively a claim for special damages, which under established legal principles must be explicitly pleaded and strictly proven. No such proof or specific pleading was provided. 39.Additionally, the Appellants contest the Kshs. 1,500,000 awarded as exemplary damages, stating that there were no exceptional circumstances, pleadings, or justifications to warrant such an award. 40.Applying the legal "but for" test of causation, the Appellants conclude that the alleged business and personal losses cannot be attributed to them, making the trial court's entire assessment of damages erroneous. 41.The Respondents submitted that the claim stems from an incident on June 20, 2019, at Kirawira Serena Camp in Tanzania, where the hotel manager and uniformed Tanzanian police officers approached the second respondent, Mr. Gideon Kiluma Musimba, during breakfast with international tourists. 42.Under threats of arrest, the second respondent was detained without charge or court order, spent a day in unhygienic conditions at a police station, and was held against his will at the hotel for an additional four days until he was compelled to sign a payment undertaking and pay Kshs 300,000. 43.This detention caused severe emotional distress, harmed the company's business reputation, and resulted in significant financial and annual business losses. 44.Consequently, the Milimani Chief Magistrate's Court awarded the respondents Kshs 2,500,000 in general damages for loss of business and reputation, alongside Kshs 1,500,000 in exemplary damages for unlawful and malicious detention. 45.In response to the appeal, the respondents raise three primary issues, starting with a defence of the trial court's jurisdiction. 46.They submit that under Sections 14 and 15 of the Civil Procedure Act, a suit for personal wrongs or property damage can be instituted where the defendant resides, carries on business, or where the cause of action arises in whole or in part. 47.The underlying contractual relationship was negotiated and partly performed in Kenya as the first respondent is a Kenyan company, and the appellant maintains its headquarters in Kenya, the respondents argue that a material part of the cause of action arose locally. 48.Furthermore, applying principles of forum non conveniens, they argue Kenya is the most appropriate and suitable forum for justice because the operational links, contractual anchors, and resulting reputational and financial harms all materialized within Kenya. 49.Regarding the second issue, which concerns the proper characterization of the claim and the parties involved, the respondents argue that the appellant cannot deflect liability onto the Tanzanian authorities. 50.They assert that the appellant actively orchestrated, instigated, and directly benefited from the coercive detention to enforce its financial demands, making the police peripheral instruments to the civil wrong. 51.Invoking restitutionary principles, the respondents state that the law imposes a personal obligation to restore benefits gained through duress, economic compulsion, and the abuse of rights. 52.They maintain that because the appellant used illegitimate pressure within its own premises to secure an advantage and divert business, it remains the correct and primary party to hold accountable. 53.Finally, the respondents address the trial court's assessment of damages by raising a strong procedural objection. 54.They contend that the appellant's argument that damages were not properly pleaded and proved is an entirely new issue being introduced for the first time on appeal. 55.Citing Order 42 of the Civil Procedure Rules, Section 78 of the Civil Procedure Act, and established Kenyan jurisprudence, the respondents emphasize that appellate review is strictly confined to the record of what was actively litigated below. 56.The appellant chose to focus exclusively on jurisdiction and failed to submit on the quantum of damages during the trial and the respondents argue that the appellant cannot now improvise new arguments or collapse the judicial hierarchy. 57.They conclude by submitting that this Court should reject this ground as procedurally incompetent and to affirm the lower court's judgment and remedies. 58.The issues for determination in this appeal are as follows;i.Whether the trial court had territorial jurisdiction to hear and determine a dispute that occurred in the United Republic of Tanzania.ii.Whether the Appellants (Serena Hotels) were the proper parties to be sued in tort for the unlawful arrest and detention of the 2nd Respondent.iii.Whether the trial court was legally justified in awarding Kshs. 2,500,000 as general damages for loss of business and Kshs. 1,500,000 as exemplary damages. 59.On the issue of territorial jurisdiction, this court finds that the trial court was properly vested with jurisdiction to entertain the suit. 60.Under Section 15(c) of the Civil Procedure Act (Cap 21), every suit shall be instituted in a court within the local limits of whose jurisdiction the cause of action, wholly or in part, arises. 61.The Respondents' plaint was not founded on the tort of unlawful detention alone, but also on the breach of the underlying contractual relationship between Little Five Tours Limited and Serena Hotels. 62.The long-term commercial partnership was negotiated in Kenya, the pro forma invoices were issued by the Appellant from its Kenyan headquarters, and the first respondent is a Kenyan company that fully settled a significant portion of the debt in Kenya. 63.Therefore, a material and substantial part of the cause of action arose within Kenyan territory. 64.Furthermore, the Appellant resides and carries on business in Kenya, and a suit for a personal wrong can be instituted where the defendant resides. 65.The doctrine of forum non conveniens, which grants a court discretion to stay proceedings where another forum is more appropriate, does not compel the conclusion that Kenya is an inappropriate forum. 66.The burden of proving that another forum is clearly more appropriate lies on the party challenging jurisdiction, and the Appellants have failed to discharge that burden given the substantial local connections to the dispute. 67.Regarding the proper parties to the suit, the Appellants' argument that they cannot be held liable because the arrest was carried out by Tanzanian police is a misdirection in law. 68.The evidence presented before the trial court, which this court accepts as credible, establishes that the Appellant’s hotel manager actively instigated the process by confronting the 2nd Respondent, demanding immediate payment, and summoning the Tanzanian police. 69.Where a private party invokes the coercive power of the state to illegally detain an individual for the purpose of enforcing a civil debt, that private party becomes a joint tortfeasor and cannot hide behind the authority of the police. 70.The misuse of police powers to collect a civil debt is unlawful and unconstitutional, and the party that sets the machinery of the state in motion bears liability. 71.The 2nd Respondent was never charged with any criminal offence, no warrant of arrest was produced, and the debt was owed by a corporate entity, not by the 2nd Respondent personally. 72.The Appellant’s actions in forcing the director to settle a corporate debt using the threat of detention constituted a clear violation of the doctrine of corporate separateness and an abuse of legal process. 73.Consequently, the trial court did not err by finding the Appellant directly and primarily liable. 74.Turning to the award of damages, the law draws a clear distinction between general and special damages. 75.General damages are such as the law will presume to be the direct, natural, and probable consequence of the act complained of, and they need not be specifically pleaded or strictly proved. 76.Special damages, however, which include quantifiable financial losses such as lost profits or loss of business, must be both specifically pleaded and strictly proved. 77.The claim of Kshs. 2,500,000 for "loss of business" as pleaded in the amended plaint constitutes a claim for special damages because it is a measurable economic loss alleged to have flowed from the Appellant’s wrongful actions. 78.The loss of business or loss of user is not a matter for judicial discretion or for a court to assess on a "reasonable" basis. 79.It is a claim that requires precise evidentiary proof, typically in the form of audited accounts, bank statements, tax returns, or business records demonstrating the earnings before the wrongful act and the losses suffered thereafter. 80.In the present case, the Respondents failed to adduce any such documentary evidence to prove the actual loss of business from the loss of the Maher Group client. 81.No contracts were produced, no profit margin analyses were tendered, and no financial statements were presented to the trial court to substantiate the claim. 82.The trial court therefore erred in awarding this sum in the absence of the requisite strict proof. That award of Kshs. 2,500,000 is hereby set aside in its entirety. 83.However, the same strict proof requirement does not apply to the claim for damages for unlawful arrest, false imprisonment, and malicious detention. 84.These are injuries to the person and to reputation for which the law presumes damage, and an award of general damages is at the discretion of the trial court. 85.The trial court found, based on uncontroverted evidence, that the 2nd Respondent was detained without charge or warrant for six days, threatened with prosecution, and held under police guard. 86.This was a gross violation of his liberty and dignity. The trial court’s assessment of damages for this wrong is not the subject of a specific ground of appeal challenging the quantum for false imprisonment, and it remains undisturbed as part of the general damages for the tortious conduct. 87.As regards the award of Kshs. 1,500,000 as exemplary damages, this court finds that it was legally justified but excessive. Exemplary damages are awarded not merely to compensate the plaintiff but to punish the defendant for oppressive, arbitrary, or unconstitutional conduct and to deter others from similar behaviour. 88.The Appellant’s conduct in orchestrating the detention of a business partner and its director to enforce a disputed civil debt, using foreign police powers on hotel premises in the presence of international tourists, was high-handed, malicious, and an abuse of power. 89.The trial court was therefore correct to award exemplary damages to mark the court’s disapproval of the Appellant’s conduct. 90.Consequently, the appeal partially succeeds. The judgment of the Chief Magistrate’s Court in Milimani Commercial Civil Case No. E6646 of 2020 is hereby varied as follows;i.The award of Kshs. 2,500,000 for loss of business is set aside for lack of strict proof.ii.The award of Kshs. 1,500,000 in exemplary damages is reduced to Kshs. 1,000,000.iii.The 2nd respondent is awarded Kshs. 1,000,000 in respect of general damages for malicious and unlawful detention.iv.The trial court’s findings on liability, jurisdiction, and the unlawful nature of the detention are affirmed in all respects.v.The total amount payable to the 2nd respondent’s Kshs. 2,000,000 plus costs of the trial court and interest from the date of the trial courts judgment until payment in full. 91.Each party shall bear their own costs of this appeal given the mixed outcome. 92.Orders to issue accordingly. Dated, Signed And Delivered At Nairobi This 2Nd Day Of June 2026ASENATH ONGERIJUDGE