1. The Plaintiff commenced this suit through a Plaint dated 2nd April 2024 seeking damages for breach of a construction contract dated 20th June 2021. The Plaintiff seeks, inter alia, a declaration that the Defendant breached the contract, payment of USD 1,343,335.63, interest, and costs of the suit.
2. The Defendant denied liability through its Statement of Defence dated 13th June 2024 and maintained that the Plaintiff itself breached the agreement through delayed and defective performance.
3. The Plaintiff contended that the parties entered into a contract dated 20th June 2021 under which the Plaintiff was engaged to undertake construction works for the Defendant’s factory project. According to the Plaintiff, the contract covered construction of the entire project, including the office or comprehensive building.
4. The Plaintiff stated that although substantial works were completed and a completion certificate issued on 11th July 2022, the Defendant failed to allow the Plaintiff to complete the remaining section of the works, namely the office building, and instead undertook the construction itself.
5. The Plaintiff maintained that the Defendant never issued any formal termination notice or communicated that the Plaintiff had been removed from the remaining works. It instead kept the Plaintiff’s machinery and employees at the site from July 2022 to January 2023 while indicating that it was still considering how to proceed.
6. The Plaintiff therefore alleged that the Defendant effectively and unilaterally terminated part of the contract in breach of its terms.
7. The Defendant, on the other hand, contended that the contract was milestone-based and that the Plaintiff delayed completion of the works by over six months.
8. It also alleged that the Plaintiff’s workmanship was substandard and required repeated rectification.
9. The Defendant further argued that the office building was never part of the milestone schedule and that no drawings, specifications, or approved pricing existed in relation thereto.
10. According to the Defendant, the Plaintiff was fully paid USD 5,534,635.11 for all certified and approved works, and no balance remains outstanding.
11. The Defendant also relied on a separate machinery sale agreement dated 20th January 2023 and argues that the Plaintiff cannot claim compensation over equipment already sold and paid for.
HEARING
The Plaintiff’s Witness Evidence
12. PW1, Zhang Liwei, a legal representative of the director of the Plaintiff company, testified on the basis of his written witness statement dated 2nd April 2024. It was his evidence that the parties entered into a general construction contract, designated as Contract Number KEDA-Kenya-20210701, for civil engineering and structural works at the Defendant’s Kisumu factory project in Muhoroni Sub-County. He stated that the project scope encompassed building the factory foundation, main structure, and equipment foundation, for a tentative contract price of USD 6,901,563.25 over a calculated period of 190 calendar days.
13. PW1 further stated that while execution was divided into distinct milestones under Clause 3 of the contract, the timelines were flexible and subject to formal start instructions from the Defendant. He testified that phase-based inspections were successfully conducted, culminating in a signed project completion acceptance certificate on 11th July 2022, under which the Plaintiff was paid a total sum of USD 5,534,635.11.
14. According to PW1, the Plaintiff was contractually designated as the sole contractor for the entirety of the project area. He asserted that the Defendant fundamentally breached the agreement by frustrating the commencement of the final phase—namely, the main comprehensive office building block, valued at USD 1,366,928.14. He testified that the Defendant delayed the release of essential architectural and construction drawings, and instead unilaterally took over and executed the building works itself.
15. PW1 further deposed that despite lodging continuous objections with the Defendant’s management, the Plaintiff's technical staff and machinery were forced to remain idle on site from 12th July 2022 to 19th January 2023. He relied on a series of WeChat messages to show that the Defendant repeatedly requested the Plaintiff to hold its resources on standby. Consequently, he itemized a claim for special damages totaling USD 1,060,950.00 representing the daily standby rates of the construction fleet, material storage for 1,601 steel pipes, and subsistence for 5 Chinese technicians.
16. The witness concluded by stating that since the Defendant unilaterally stripped the Plaintiff of this portion of the project without invoking the contract's termination machinery, the Plaintiff was fully entitled to 20% of the remaining contract sum, amounting to USD 273,385.63, as contractually liquidated damages under Clause 21.
17. During cross-examination, PW1, Mr. Zhang, conceded that the Plaintiff company had received full and final payment for all works executed under the milestone framework of the construction contract. He further admitted that the specific equipment and machinery itemized in the Plaint were subsequently sold to the Defendant under a separate sale agreement dated 20th January 2023, and that the Plaintiff received full consideration for the said transaction.
18. He verified that the English translations of the contractual documents relied upon were accurate and had been prepared by the Plaintiff itself, while also admitting that the construction schedule suffered delayed completion.
The Defendant’s Witness Evidence
19. DW1, Mr. Li Ruiqin, a director and shareholder of the Defendant company, testified and adopted his written witness statement dated 30th November 2024 as his evidence in chief. He stated that the parties entered into a commercial construction contract to execute civil and structural works at the Defendant's Kisumu factory on a strictly milestone basis. It was his evidence that the contract provided for a clear commencement date of 1st July 2021 and a completion date of 7th January 2022, delineating an agreed construction period of 190 days.
20. He testified that despite the Defendant surrendering the building site in a timely manner and providing all necessary operational support, the project was severely delayed due to the Plaintiff’s lack of preparation and was only completed on 11th July 2022.
21. DW1 further deposed that the figure of USD 6,901,563.25 cited by the Plaintiff was explicitly a tentative contract price. He clarified that the actual final payable sum was contractually engineered to crystallize only after the physical tabulation of costs incurred under the milestone schedule. He testified that the Plaintiff’s workmanship was structurally substandard and unsatisfactory, which compelled the Defendant, in good faith, to grant multiple opportunities for repetitive reworks and rectifications.
22. The witness asserted that payments were made progressively after each milestone was satisfactorily completed and signed off, culminating in a cumulative disbursement of USD 5,534,635.11, following which the parties executed a project completion acceptance certificate.
23. Regarding the Plaintiff’s claim for the comprehensive office block, DW1 asserted that the operative milestone schedule explicitly excluded the office building, and that the agreed tentative contract price of USD 6,901,563.25 was specifically calculated for the factory area alone. He maintained that the parties had never reached a consensus, executed drawings, or finalized pricing for an office structure.
24. Regarding the Plaintiff's claim for special damages for idle machinery, DW1 testified that the Plaintiff was being economical with the truth. He explained that the Plaintiff had not secured subsequent structural contracts and had actively requested permission to store its equipment within the Defendant’s compound, which was granted purely as an accommodation.
25. DW1 stated that the Defendant subsequently purchased the entirety of the itemized construction equipment and machinery from the Plaintiff under a standalone contract dated 20th January 2023, for which the full purchase consideration was paid. He contended that the machinery belonged entirely to the Defendant, and that the Plaintiff’s claim amounted to an impermissible attempt at double recovery. He concluded by stating that the Defendant had not breached any contractual terms and prayed that the suit be dismissed with costs.
26. During cross-examination, the witness admitted that there was no evidence filed in court that the alleged defects and delays had been formally communicated to the Plaintiff. It was also his admission that the Defendant had issued to the Plaintiff a project completion acceptance certificate dated 11th July 2022, under which the project was certified to be meeting the contractual standards and a sum of USD 5,534,635.11 paid thereunder.
Analysis and Determination
27. I have carefully considered the pleadings and the evidence adduced by the parties. The issues arising for determination are:
i. Whether the office building formed part of the contracted works;
ii. Whether the Defendant breached the contract;
iii. Whether the Plaintiff is entitled to damages for breach of contract;
iv. Whether the Plaintiff proved the claim for idle machinery and labour costs;
Whether the office building formed part of the contracted works
28. I have carefully reviewed the contract (Contract No. KEDA-Kenya-20210701) dated 20th June 2021 – as translated on 1st December 2023, produced as PEXH -2. The agreement was executed between KEDA Ceramics International Co., Ltd. as the Employer (the Plaintiff herein) and Dongsheng Construction Engineering Limited as the Contractor (the Defendant).
29. From the agreement, the Court notes that the contract expressly provided that the Plaintiff was responsible for the construction of the entire project. The contract explicitly enumerates the "Comprehensive Building" under the structural description of individual projects assigned to the Contractor. Specifically, Clause 4 (i) of the agreement mandates that the contractor shall build:
"i. Comprehensive Building: Concrete foundation, concrete main body, wall masonry, wall plastering."
31. By explicitly itemizing the structural components of the office block alongside the main industrial workshops (such as the raw material and pulping sections), the contract establishes that the office block was a core, integrated component of the "entire project" for which the contractor was solely responsible.
32. Further, while the Defendant contended that the milestone schedule excluded the office building, a literal examination of the Progress Requirements table under Clause 3 reveals otherwise. Item No. 17 of the binding milestone progress table explicitly lists the "Comprehensive building" with a designated structural duration of 180 days, setting a provisional construction timeline from 29th October 2021 to 27th April 2022.
33. The Defendant's argument that there was no meeting of minds on a fixed price for the office building, in my view, ignores the core pricing mechanism of the contract. This contract was fundamentally a comprehensive unit price package, not a fixed lump-sum agreement. Clause 5 explicitly states that the contract sum of USD 6,901,563.25 was tentative, and final settlement would be derived from actual quantities multiplied by the agreed comprehensive unit rates (for earthwork, concrete, formwork, rebar, and plastering).
34. The clause addressing subsequent adjustments (page 3 of the agreement) explicitly states:
“The office building will be based on the actual design, and the two parties will discuss the quotation for vertical transportation and comprehensive scaffolding. For other items, this contract does not include the comprehensive unit price for each item, and the two parties will negotiate based on the specific work content.”
35. The literal interpretation of this clause means that for the office building, the core unit rates (concrete, masonry, rebar) were already fixed and binding by the contract. Only secondary accessory variables (vertical transportation (cranes) and specific scaffolding) were left for supplementary negotiation based on final architectural heights.
36. The Defendant’s position is internally inconsistent. A party cannot simultaneously concede that a structure formed part of the intended project while denying any contractual relationship regarding the same. Importantly, the Defendant admitted that it eventually undertook construction of the office building itself.
37. Accordingly, the Court is persuaded that the office building formed part of the broader contractual framework even if the specific pricing and implementation details required further engagement between the parties.
38. The Defendant did not demonstrate that it invited the Plaintiff for negotiations or formally excluded the Plaintiff from further works in accordance with the contract.
39. Consequently, on the evidence before the Court, I am satisfied that the office building formed part of the broader project contemplated by the parties and remained within the contractual framework governing their relationship.
Whether the Defendant breached the contract
40. The Defendant's principal defence is that the Plaintiff delayed completion of the works and performed defective work. However, evidence on record reveals that notwithstanding the allegations, the parties executed a Project Completion Acceptance Certificate dated 11th July 2022.
41. There was no evidence from the Defendant of notices rejecting the works, defect notices issued under the contract, correspondence invoking contractual remedies for poor workmanship, or evidence showing that the completion certificate was issued under protest.
42. Once the Defendant accepted the completed works and signed the completion certificate, the Court finds it difficult to accept the Plaintiff’s generalized allegations of substandard workmanship without documentary support.
43. Consequently, I find that by unilaterally taking over the construction of the remaining office building block and locking out the Contractor, without engaging the Plaintiff through the mandatory contractual mechanisms and consultations contemplated under the agreement, the Defendant breached the contract.
Whether the Plaintiff is entitled to damages for breach of contract
44. Having found that the Defendant breached the contract by excluding the Plaintiff from completing part of the contracted works, the next question is the appropriate remedy.
45. Clause 21 of the contract provided that where part of the contract was terminated, liquidated damages would be calculated at 20% of the corresponding contract price of the unconstructed portion.
46. The evidence before the Court shows that the parties initially agreed on a tentative contract sum of USD 6,901,563.25. It is not disputed that the Defendant paid the Plaintiff a total of USD 5,534,635.11 for the works that were executed and certified.
47. The Plaintiff's case is that the difference between those sums, namely USD 1,366,928.14, represented the value of the works it was prevented from completing after the Defendant took over construction of the office building.
48. The Defendant did not place before the Court any alternative valuation of the omitted works. Neither did it demonstrate that the balance between the tentative contract sum and the amount paid related to works outside the contractual scope.
49. In the absence of contrary evidence, and bearing in mind that Clause 21 provides a contractual formula for compensation in the event of partial termination, the Court is satisfied on a balance of probabilities that the value attributable to the omitted works is represented by the unpaid balance of USD 1,366,928.14.
50. Applying Clause 21, the Plaintiff is entitled to liquidated damages equivalent to twenty percent (20%) of USD 1,366,928.14; the Plaintiff is therefore awarded liquidated damages in the sum of USD 273,385.63.
Whether the Plaintiff proved idle machinery and labour costs
51. The Plaintiff claimed USD 1,060,950 allegedly incurred as idle machinery and labour costs between July 2022 and January 2023.
52. While the evidence suggests that the Plaintiff's machinery and personnel remained at the site during that period, the law requires special damages to be specifically pleaded and strictly proved.
53. The Plaintiff did not produce payroll records, machinery utilization records, invoices, payment vouchers, audited accounts or other documentary evidence capable of proving the amount claimed.
54. The Court is therefore unable to award the sum of USD 1,060,950 as claimed.
55. Nevertheless, the evidence establishes that after issuance of the Project Completion Acceptance Certificate, the Defendant did not formally communicate its position regarding the remaining office building works and allowed the Plaintiff's personnel and machinery to remain at the site for several months while it deliberated on how to proceed. The Defendant subsequently undertook the remaining works itself without invoking the contractual mechanisms governing termination or variation.
56. Although the Plaintiff failed to strictly prove the specific monetary loss alleged, the Court is satisfied that the Defendant's conduct occasioned inconvenience, disruption and loss of opportunity to the Plaintiff. In the circumstances, and doing the best it can on the evidence available, the Court awards nominal damages of USD 15,000.
Disposition
57. The upshot of the foregoing is that the Court finds the Plaintiff’s claim partially successful.
58. Judgment is therefore entered for the Plaintiff against the Defendant as follows:
a) A declaration is hereby issued that the Defendant breached the construction contract dated 20th June 2021.
b) The Plaintiff is awarded liquidated damages in the sum of USD 273,385.63.
c) The Plaintiff is awarded nominal damages in the sum of USD 15,000.
d) The claim for USD 1,060,950 for idle machinery and labour costs is dismissed.
e) The sums awarded in (b) and (c) above shall attract interest at court rates from the date of filing suit until payment in full.
f) The Plaintiff shall have costs of the suit.
59. It is so ordered
DATED, SIGNED, AND DELIVERED AT NAIROBI
THIS 11TH DAY OF JUNE 2026
HON. MR. JUSTICE MOSES ADO
Judge of the High Court
In the Presence of:
Moses C/A
Gakuru………………for the Plaintiff
Ms. Ochieng h/b for Makoru……………for the Defendant
2. The Defendant denied liability through its Statement of Defence dated 13th June 2024 and maintained that the Plaintiff itself breached the agreement through delayed and defective performance.
3. The Plaintiff contended that the parties entered into a contract dated 20th June 2021 under which the Plaintiff was engaged to undertake construction works for the Defendant’s factory project. According to the Plaintiff, the contract covered construction of the entire project, including the office or comprehensive building.
4. The Plaintiff stated that although substantial works were completed and a completion certificate issued on 11th July 2022, the Defendant failed to allow the Plaintiff to complete the remaining section of the works, namely the office building, and instead undertook the construction itself.
5. The Plaintiff maintained that the Defendant never issued any formal termination notice or communicated that the Plaintiff had been removed from the remaining works. It instead kept the Plaintiff’s machinery and employees at the site from July 2022 to January 2023 while indicating that it was still considering how to proceed.
6. The Plaintiff therefore alleged that the Defendant effectively and unilaterally terminated part of the contract in breach of its terms.
7. The Defendant, on the other hand, contended that the contract was milestone-based and that the Plaintiff delayed completion of the works by over six months.
8. It also alleged that the Plaintiff’s workmanship was substandard and required repeated rectification.
9. The Defendant further argued that the office building was never part of the milestone schedule and that no drawings, specifications, or approved pricing existed in relation thereto.
10. According to the Defendant, the Plaintiff was fully paid USD 5,534,635.11 for all certified and approved works, and no balance remains outstanding.
11. The Defendant also relied on a separate machinery sale agreement dated 20th January 2023 and argues that the Plaintiff cannot claim compensation over equipment already sold and paid for.
HEARING
The Plaintiff’s Witness Evidence
12. PW1, Zhang Liwei, a legal representative of the director of the Plaintiff company, testified on the basis of his written witness statement dated 2nd April 2024. It was his evidence that the parties entered into a general construction contract, designated as Contract Number KEDA-Kenya-20210701, for civil engineering and structural works at the Defendant’s Kisumu factory project in Muhoroni Sub-County. He stated that the project scope encompassed building the factory foundation, main structure, and equipment foundation, for a tentative contract price of USD 6,901,563.25 over a calculated period of 190 calendar days.
13. PW1 further stated that while execution was divided into distinct milestones under Clause 3 of the contract, the timelines were flexible and subject to formal start instructions from the Defendant. He testified that phase-based inspections were successfully conducted, culminating in a signed project completion acceptance certificate on 11th July 2022, under which the Plaintiff was paid a total sum of USD 5,534,635.11.
14. According to PW1, the Plaintiff was contractually designated as the sole contractor for the entirety of the project area. He asserted that the Defendant fundamentally breached the agreement by frustrating the commencement of the final phase—namely, the main comprehensive office building block, valued at USD 1,366,928.14. He testified that the Defendant delayed the release of essential architectural and construction drawings, and instead unilaterally took over and executed the building works itself.
15. PW1 further deposed that despite lodging continuous objections with the Defendant’s management, the Plaintiff's technical staff and machinery were forced to remain idle on site from 12th July 2022 to 19th January 2023. He relied on a series of WeChat messages to show that the Defendant repeatedly requested the Plaintiff to hold its resources on standby. Consequently, he itemized a claim for special damages totaling USD 1,060,950.00 representing the daily standby rates of the construction fleet, material storage for 1,601 steel pipes, and subsistence for 5 Chinese technicians.
16. The witness concluded by stating that since the Defendant unilaterally stripped the Plaintiff of this portion of the project without invoking the contract's termination machinery, the Plaintiff was fully entitled to 20% of the remaining contract sum, amounting to USD 273,385.63, as contractually liquidated damages under Clause 21.
17. During cross-examination, PW1, Mr. Zhang, conceded that the Plaintiff company had received full and final payment for all works executed under the milestone framework of the construction contract. He further admitted that the specific equipment and machinery itemized in the Plaint were subsequently sold to the Defendant under a separate sale agreement dated 20th January 2023, and that the Plaintiff received full consideration for the said transaction.
18. He verified that the English translations of the contractual documents relied upon were accurate and had been prepared by the Plaintiff itself, while also admitting that the construction schedule suffered delayed completion.
The Defendant’s Witness Evidence
19. DW1, Mr. Li Ruiqin, a director and shareholder of the Defendant company, testified and adopted his written witness statement dated 30th November 2024 as his evidence in chief. He stated that the parties entered into a commercial construction contract to execute civil and structural works at the Defendant's Kisumu factory on a strictly milestone basis. It was his evidence that the contract provided for a clear commencement date of 1st July 2021 and a completion date of 7th January 2022, delineating an agreed construction period of 190 days.
20. He testified that despite the Defendant surrendering the building site in a timely manner and providing all necessary operational support, the project was severely delayed due to the Plaintiff’s lack of preparation and was only completed on 11th July 2022.
21. DW1 further deposed that the figure of USD 6,901,563.25 cited by the Plaintiff was explicitly a tentative contract price. He clarified that the actual final payable sum was contractually engineered to crystallize only after the physical tabulation of costs incurred under the milestone schedule. He testified that the Plaintiff’s workmanship was structurally substandard and unsatisfactory, which compelled the Defendant, in good faith, to grant multiple opportunities for repetitive reworks and rectifications.
22. The witness asserted that payments were made progressively after each milestone was satisfactorily completed and signed off, culminating in a cumulative disbursement of USD 5,534,635.11, following which the parties executed a project completion acceptance certificate.
23. Regarding the Plaintiff’s claim for the comprehensive office block, DW1 asserted that the operative milestone schedule explicitly excluded the office building, and that the agreed tentative contract price of USD 6,901,563.25 was specifically calculated for the factory area alone. He maintained that the parties had never reached a consensus, executed drawings, or finalized pricing for an office structure.
24. Regarding the Plaintiff's claim for special damages for idle machinery, DW1 testified that the Plaintiff was being economical with the truth. He explained that the Plaintiff had not secured subsequent structural contracts and had actively requested permission to store its equipment within the Defendant’s compound, which was granted purely as an accommodation.
25. DW1 stated that the Defendant subsequently purchased the entirety of the itemized construction equipment and machinery from the Plaintiff under a standalone contract dated 20th January 2023, for which the full purchase consideration was paid. He contended that the machinery belonged entirely to the Defendant, and that the Plaintiff’s claim amounted to an impermissible attempt at double recovery. He concluded by stating that the Defendant had not breached any contractual terms and prayed that the suit be dismissed with costs.
26. During cross-examination, the witness admitted that there was no evidence filed in court that the alleged defects and delays had been formally communicated to the Plaintiff. It was also his admission that the Defendant had issued to the Plaintiff a project completion acceptance certificate dated 11th July 2022, under which the project was certified to be meeting the contractual standards and a sum of USD 5,534,635.11 paid thereunder.
Analysis and Determination
27. I have carefully considered the pleadings and the evidence adduced by the parties. The issues arising for determination are:
i. Whether the office building formed part of the contracted works;
ii. Whether the Defendant breached the contract;
iii. Whether the Plaintiff is entitled to damages for breach of contract;
iv. Whether the Plaintiff proved the claim for idle machinery and labour costs;
Whether the office building formed part of the contracted works
28. I have carefully reviewed the contract (Contract No. KEDA-Kenya-20210701) dated 20th June 2021 – as translated on 1st December 2023, produced as PEXH -2. The agreement was executed between KEDA Ceramics International Co., Ltd. as the Employer (the Plaintiff herein) and Dongsheng Construction Engineering Limited as the Contractor (the Defendant).
29. From the agreement, the Court notes that the contract expressly provided that the Plaintiff was responsible for the construction of the entire project. The contract explicitly enumerates the "Comprehensive Building" under the structural description of individual projects assigned to the Contractor. Specifically, Clause 4 (i) of the agreement mandates that the contractor shall build:
"i. Comprehensive Building: Concrete foundation, concrete main body, wall masonry, wall plastering."
31. By explicitly itemizing the structural components of the office block alongside the main industrial workshops (such as the raw material and pulping sections), the contract establishes that the office block was a core, integrated component of the "entire project" for which the contractor was solely responsible.
32. Further, while the Defendant contended that the milestone schedule excluded the office building, a literal examination of the Progress Requirements table under Clause 3 reveals otherwise. Item No. 17 of the binding milestone progress table explicitly lists the "Comprehensive building" with a designated structural duration of 180 days, setting a provisional construction timeline from 29th October 2021 to 27th April 2022.
33. The Defendant's argument that there was no meeting of minds on a fixed price for the office building, in my view, ignores the core pricing mechanism of the contract. This contract was fundamentally a comprehensive unit price package, not a fixed lump-sum agreement. Clause 5 explicitly states that the contract sum of USD 6,901,563.25 was tentative, and final settlement would be derived from actual quantities multiplied by the agreed comprehensive unit rates (for earthwork, concrete, formwork, rebar, and plastering).
34. The clause addressing subsequent adjustments (page 3 of the agreement) explicitly states:
“The office building will be based on the actual design, and the two parties will discuss the quotation for vertical transportation and comprehensive scaffolding. For other items, this contract does not include the comprehensive unit price for each item, and the two parties will negotiate based on the specific work content.”
35. The literal interpretation of this clause means that for the office building, the core unit rates (concrete, masonry, rebar) were already fixed and binding by the contract. Only secondary accessory variables (vertical transportation (cranes) and specific scaffolding) were left for supplementary negotiation based on final architectural heights.
36. The Defendant’s position is internally inconsistent. A party cannot simultaneously concede that a structure formed part of the intended project while denying any contractual relationship regarding the same. Importantly, the Defendant admitted that it eventually undertook construction of the office building itself.
37. Accordingly, the Court is persuaded that the office building formed part of the broader contractual framework even if the specific pricing and implementation details required further engagement between the parties.
38. The Defendant did not demonstrate that it invited the Plaintiff for negotiations or formally excluded the Plaintiff from further works in accordance with the contract.
39. Consequently, on the evidence before the Court, I am satisfied that the office building formed part of the broader project contemplated by the parties and remained within the contractual framework governing their relationship.
Whether the Defendant breached the contract
40. The Defendant's principal defence is that the Plaintiff delayed completion of the works and performed defective work. However, evidence on record reveals that notwithstanding the allegations, the parties executed a Project Completion Acceptance Certificate dated 11th July 2022.
41. There was no evidence from the Defendant of notices rejecting the works, defect notices issued under the contract, correspondence invoking contractual remedies for poor workmanship, or evidence showing that the completion certificate was issued under protest.
42. Once the Defendant accepted the completed works and signed the completion certificate, the Court finds it difficult to accept the Plaintiff’s generalized allegations of substandard workmanship without documentary support.
43. Consequently, I find that by unilaterally taking over the construction of the remaining office building block and locking out the Contractor, without engaging the Plaintiff through the mandatory contractual mechanisms and consultations contemplated under the agreement, the Defendant breached the contract.
Whether the Plaintiff is entitled to damages for breach of contract
44. Having found that the Defendant breached the contract by excluding the Plaintiff from completing part of the contracted works, the next question is the appropriate remedy.
45. Clause 21 of the contract provided that where part of the contract was terminated, liquidated damages would be calculated at 20% of the corresponding contract price of the unconstructed portion.
46. The evidence before the Court shows that the parties initially agreed on a tentative contract sum of USD 6,901,563.25. It is not disputed that the Defendant paid the Plaintiff a total of USD 5,534,635.11 for the works that were executed and certified.
47. The Plaintiff's case is that the difference between those sums, namely USD 1,366,928.14, represented the value of the works it was prevented from completing after the Defendant took over construction of the office building.
48. The Defendant did not place before the Court any alternative valuation of the omitted works. Neither did it demonstrate that the balance between the tentative contract sum and the amount paid related to works outside the contractual scope.
49. In the absence of contrary evidence, and bearing in mind that Clause 21 provides a contractual formula for compensation in the event of partial termination, the Court is satisfied on a balance of probabilities that the value attributable to the omitted works is represented by the unpaid balance of USD 1,366,928.14.
50. Applying Clause 21, the Plaintiff is entitled to liquidated damages equivalent to twenty percent (20%) of USD 1,366,928.14; the Plaintiff is therefore awarded liquidated damages in the sum of USD 273,385.63.
Whether the Plaintiff proved idle machinery and labour costs
51. The Plaintiff claimed USD 1,060,950 allegedly incurred as idle machinery and labour costs between July 2022 and January 2023.
52. While the evidence suggests that the Plaintiff's machinery and personnel remained at the site during that period, the law requires special damages to be specifically pleaded and strictly proved.
53. The Plaintiff did not produce payroll records, machinery utilization records, invoices, payment vouchers, audited accounts or other documentary evidence capable of proving the amount claimed.
54. The Court is therefore unable to award the sum of USD 1,060,950 as claimed.
55. Nevertheless, the evidence establishes that after issuance of the Project Completion Acceptance Certificate, the Defendant did not formally communicate its position regarding the remaining office building works and allowed the Plaintiff's personnel and machinery to remain at the site for several months while it deliberated on how to proceed. The Defendant subsequently undertook the remaining works itself without invoking the contractual mechanisms governing termination or variation.
56. Although the Plaintiff failed to strictly prove the specific monetary loss alleged, the Court is satisfied that the Defendant's conduct occasioned inconvenience, disruption and loss of opportunity to the Plaintiff. In the circumstances, and doing the best it can on the evidence available, the Court awards nominal damages of USD 15,000.
Disposition
57. The upshot of the foregoing is that the Court finds the Plaintiff’s claim partially successful.
58. Judgment is therefore entered for the Plaintiff against the Defendant as follows:
a) A declaration is hereby issued that the Defendant breached the construction contract dated 20th June 2021.
b) The Plaintiff is awarded liquidated damages in the sum of USD 273,385.63.
c) The Plaintiff is awarded nominal damages in the sum of USD 15,000.
d) The claim for USD 1,060,950 for idle machinery and labour costs is dismissed.
e) The sums awarded in (b) and (c) above shall attract interest at court rates from the date of filing suit until payment in full.
f) The Plaintiff shall have costs of the suit.
59. It is so ordered
DATED, SIGNED, AND DELIVERED AT NAIROBI
THIS 11TH DAY OF JUNE 2026
HON. MR. JUSTICE MOSES ADO
Judge of the High Court
In the Presence of:
Moses C/A
Gakuru………………for the Plaintiff
Ms. Ochieng h/b for Makoru……………for the Defendant