Introduction
1. Imagine a man who sells you a plot of land. He takes your money. He refuses to tell you where the plot is. He refuses to give you a map. He refuses to hand over the keys. Then, when you do not build on the plot, he terminates the agreement and keeps your money.
2. That, stripped to its essentials, is the case before me.
3. The Plaintiff, ISL Kenya Limited, is a limited liability company registered under the Companies Act, Chapter 488 Laws of Kenya (repealed). The Defendant, Export Processing Zones Authority (EPZA), is a state corporation established under the Export Processing Zones Act, Cap 517 Laws of Kenya, with the mandate to promote and facilitate export-oriented investments.
4. The dispute arises from an arrangement between the parties concerning the lease of land known as L.R. No. 18474/218, Portions C1 and C2 (the suit property), situated within the Athi River Export Processing Zone. The Plaintiff’s case is that the arrangement was formalized through a Letter of Offer dated 30 th June 2021, which it accepted on 29 th July 2021, and that it thereafter made substantial payments towards the Stand Premium, Security Deposit and Business Service Permit.
The Plaintiff's Case
5. The Plaintiff’s case is set out in the Plaint dated 11 th June 2025. It avers that, following discussions between the parties regarding the lease of the subject land, the Defendant issued a Letter of Offer dated 19 th August 2019 to the Plaintiff in respect of the lease of L.R. No. 18474/218, Portions C1 and C2. The Plaintiff duly acknowledged and signed the letter, and returned it on 2 nd September 2019.
6. Following discussions between the parties, the Defendant issued a Letter of Offer dated 19 th August 2019 in respect of the proposed lease. The Plaintiff accepted the offer, signed it and returned it to the Defendant on 2 nd September 2019.
7. Pursuant to that offer, pro forma invoices were issued for a Stand Premium of USD 23,698, a Security Deposit of USD 6,129, making a total of USD 29,827, and Business Service Permit fees of Kshs. 20,000.
8. The Plaintiff’s case is set out in the Plaint dated 11 th June 2025. It avers that, following discussions between the parties regarding the lease of the subject land, the Defendant issued a Letter of Offer dated 19 th August 2019 to the Plaintiff in respect of the lease of L.R. No. 18474/218, Portions C1 and C2. The Plaintiff duly acknowledged and signed the letter, and returned it on 2nd September 2019.
9. The Plaintiff subsequently made a further request for an extension by a letter dated 14 th June 2021. It states that the request was accepted and that, consequently, the Defendant issued a fresh Letter of Offer dated 30 th June 2021. The Plaintiff accepted the new offer on 29 th July 2021.
10. The Plaintiff's case is that it thereafter made payments towards the consideration stipulated by the Defendant. The payments were made as follows:
a) USD 23,698.80 towards the Stand Premium on 23 rd August 2021;
b) USD 2,860.20 towards the Security Deposit on 23 rd August 2021;
c) USD 1,984.85 towards the Security Deposit on 28 th March 2023;
d) USD 1,283.95 as the balance of the Security Deposit on 25 th April 2023; and
e) Kshs. 20,000 towards the Business Service Permit on 25 th April 2023.
11. The Plaintiff therefore maintains that it paid the entire Standard Premium and Security Deposit demanded by the Defendant, together with the Business Service Permit fees.
12. The Plaintiff further states that, after making the payments, it made several requests to the Defendant to be shown the subject property. According to the Plaintiff, the Defendant did not act on those requests.
13. It is the Plaintiff's case that, in the course of its dealings with the Defendant, it was informed orally that the subject property was within a flood-prone area. On that basis, the Plaintiff requested that the allocated portions be substituted with other plots. The request was declined, according to the Plaintiff, on the basis that the lease had already been terminated on 25 th December 2023.
14. The Plaintiff subsequently discovered, it alleges, that the representation concerning the flood-prone nature of the property was false and misleading.
15. The Plaintiff further states that, in anticipation of taking up the premises, it expended considerable time, money and other resources in preparing to relocate its operations, including taking steps towards decommissioning its plant.
16. The Plaintiff's position is that it paid a total of USD 29,827.80 and Kshs. 20,000 to the Defendant, but did not receive the lease or possession of the subject property.
17. On that basis, the Plaintiff seeks the following reliefs:
a) An order of specific performance of the lease agreement entered into with respect to Plot No. 18474/224 C1 and C2 vide a letter of offer which was issued on 30 th June, 2021 and subsequently accepted on 29 th July, 2021;
b) In the alternative to prayer (a) above, an order directing the Defendant to fully refund the Plaintiff the full amount paid as per the payment schedule in paragraph 4 of the Plaint, together with costs and interest;
c) General damages for breach of contract/lease agreement;
d) A permanent injunction restricting the Defendant by itself, its servants, agents and/or employees or whoever is acting on its behalf and/or instructions from trespassing onto, alienating, advertising for lease, offering for lease, taking possession of, leasing, transferring, disposing of or in any manner whatsoever interfering with Plot No. 18474/224 C1 and C2 as leased out to the Plaintiff for the period of the lease agreement;
e) Costs of the suit together with interest thereon at such rate and for such period as this Court may deem fit to order; and
f) Any other just and equitable relief as this Court may deem appropriate.
The Defendant's Case
18. The Defendant filed a Statement of Defence and Counterclaim dated 23 rd July 2025 and denies liability to the Plaintiff.
19. It is the Plaintiff's case that, in the course of its dealings with the Defendant, it was informed orally that the subject property was within a flood-prone area. On that basis, the Plaintiff requested that the allocated portions be substituted with other plots. The request was declined, according to the Plaintiff, on the basis that the lease had already been terminated on 25 th December 2023.
20. The Defendant states that the Plaintiff subsequently appealed against that position and that, following the appeal, a fresh Letter of Offer dated 30 th June 2021 was issued. The new offer provided for a 50-year lease commencing on 1 st August 2021.
21. The Defendant maintains that the Plaintiff again failed to comply with the terms of the new offer, particularly the requirements relating to payment and commencement of the proposed development.
22. The Defendant denies that the Plaintiff was denied an opportunity to inspect the subject property. Its case is that, before issuing a Letter of Offer, it is standard practice to show an investor the general location and boundaries of the allocated property and to provide relevant site information. The Defendant nevertheless maintains that the Plaintiff remained in breach because it did not make the required Standard Premium and Security Deposit within the stipulated period.
23. The Defendant further states that the agreement was lawfully terminated by a notice dated 26 th September 2023.
24. As regards the monies paid by the Plaintiff, the Defendant contends that the Standard Premium was expressly non-refundable, while the Security Deposit was to be applied towards the first year's rent subject to the Plaintiff's compliance with the terms of the agreement.
25. In its Counterclaim, the Defendant alleges that the Plaintiff was required to pay annual rent of USD 12,258 and develop the properties within two years from the commencement of the lease. It contends that the Plaintiff failed to develop the properties and accumulated rent arrears for the years 2021, 2022 and 2023 amounting to USD 33,128.05.
26. The Defendant consequently seeks the following reliefs:
a) An order that the Plaintiff is in rental arrears of United States Dollars Thirty-Three Thousand One Hundred and Twenty-Eight and Five Cents Only (USD 33,128.05);
b) General damages;
c) Costs of the suit; and
d) Any other relief which this Court may deem fit to grant.
27. The Plaintiff filed a Reply to Defence and Defence to Counterclaim dated 6 th September, 2025. It denied breaching the terms of the letter of offer and maintained that the Defendant accepted its payments. It also denied receiving the alleged termination notice and stated that it only learnt of the termination through the Defendant’s letter dated 26 th February, 2025.
28. In answer to the Counterclaim, the Plaintiff denied liability for the alleged rent arrears and maintained that it could not develop the properties because they had neither been formally handed over nor made available for inspection.
29. The suit proceeded to hearing on 6 th July 2026, when both parties presented their respective cases.
THE EVIDENCE
The Plaintiff's Evidence
30. The Plaintiff called one witness, John Mburu (PW1), a Director of the Plaintiff. He adopted his witness statement dated 11 th June 2025 and produced the documents accompanying the Plaintiff's case as Plaintiff's Exhibits 1 to 20 .
31 . PW1 testified that the Plaintiff paid a total of USD 29,827.80 towards the Standard Premium and Security Deposit, and a further Kshs. 20,000 towards the Business Service Permit. His evidence was that the Defendant received the payments and issued official receipts in respect thereof.
32 . PW1's 1 evidence was that, having made the payments, the Plaintiff expected to be shown the physical location of the property, issued with the lease and thereafter handed possession of the premises. He maintained that the Plaintiff was never shown the specific portions allocated to it. He further testified that the Plaintiff raised the issue of the property's alleged location within a flood-prone area and subsequently sought a refund of the sums paid.
33. In cross-examination, PW1 acknowledged that the parties had initially dealt with the Letter of Offer dated 19 th August 2019 but that the arrangement did not proceed. He attributed this to the circumstances occasioned by the COVID-19 pandemic and confirmed that the 2019 offer subsequently lapsed. He further confirmed that a fresh Letter of Offer dated 30 th June 2021 was thereafter issued.
34 . PW1's evidence was that, although he understood the terms of the Letter of Offer, he regarded it as a document guiding the parties rather than as the registered lease itself. He nevertheless acknowledged that he understood its contractual significance. He also confirmed that the Standard Premium was stated to be non-refundable.
35. On the payments made under the 2021 Letter of Offer, PW1 stated that they were made on different dates and were accepted by the Defendant. He explained that the Defendant continued to demand for payment and received the sums as they were remitted. His evidence was that the Plaintiff had been shown the general area of the property during the earlier dealings but had never been shown the specific land allocated to it.
36 . PW1 further maintained that the Plaintiff remained ready to proceed with the transaction and that the final payment was made in 2023. His evidence was that, notwithstanding the payments made, the specific property was never pointed out to the Plaintiff.
37. During re-examination, PW1 maintained that no registered lease had been issued to the Plaintiff and that possession of the property had never been given to it. He stated that the Plaintiff had repeatedly requested to be shown the property to enable it to plan and prepare for the intended development, but that the Defendant's operational arm did not act upon those requests.
The Defendant's Evidence
38. The Defendant called one witness, Andrew Gichuku Njuru, who testified that he is an Assistant Manager Property at the EPZ Authority. He adopted his witness statement and produced documents as Defence Exhibit 1 to 6.
39 . DW1 explained the Defendant's process for allocating property within the Export Processing Zones. His evidence was that the process begins with a Letter of Offer setting out the applicable terms and conditions. The investor is required to make the stipulated payments within the validity period of the offer. Upon compliance with those requirements, the property is formally handed over to the investor.
40 . DW1 f urther explained that an investor is expected to undertake due diligence concerning the property and that, before handover, the investor would ordinarily be shown the location of the property on a map. He maintained that the Plaintiff had not complied with the terms of the Letter of Offer.
41. During cross-examination, however, DW1 acknowledged that there had been correspondence from the Plaintiff requesting to be shown the property before proceeding with compliance. He further confirmed that the property had not been handed over to the Plaintiff. While he maintained that the Plaintiff had been shown the physical location of the property, he accepted that the map said to have been provided during an earlier site visit had not been produced in evidence.
42 . DW1's evidence on the sequence of compliance and handover was that the Plaintiff was required to make the stipulated payments before the property could be shown to it. He nevertheless confirmed that the Plaintiff had requested to be shown the property before completing compliance. He maintained that the Plaintiff was initially in breach of the terms of the Letter of Offer.
43. On the issue of the alleged flood zone, DW1 stated that the Defendant was not aware of that issue. He explained that maps and survey reports had not subsequently been availed to the Plaintiff because, according to the Defendant's position, the Plaintiff was already in breach. He nevertheless maintained that the maps had previously been shown to the Plaintiff, although the maps themselves were not produced in evidence.
44. On termination, DW1 referred to a notice dated 26 th September 2023 and maintained that the Plaintiff had been shown the general area of the land and had accepted the conditions contained in the Letter of Offer. He further maintained that, upon execution of the Letter of Offer, it became the operative agreement governing the parties' relationship.
45. The evidence of the two witnesses establishes some matters which are not seriously in dispute. The parties initially dealt with the 2019 Letter of Offer, which subsequently lapsed, and thereafter proceeded on the basis of the Letter of Offer dated 30 th June 2021. It is also common ground that the Plaintiff made the payments evidenced by the receipts produced in court and that those payments were received by the Defendant.
46. The evidence is, however, in dispute as to the circumstances in which the Plaintiff was expected to undertake due diligence, make the stipulated payments, obtain identification and handover of the property, and commence development. There is also a dispute concerning the alleged termination of the arrangement and the circumstances in which the notice dated 26 th September 2023 was issued. These matters fall for determination from the contractual documents and the evidence as a whole.
SUBMISSIONS
47. After the respective cases closed, the Court directed the parties to exchange written submissions within 30 days.
The Plaintiff's Submissions
48. The Plaintiff's written submissions dated 12 th August 2026, filed through M/s Nderu Ngaruni & Kimeru Advocates , were filed outside the period prescribed by the Court. I have nevertheless in the interest of justice considered the submissions in determining the issues arising in the suit.
49. Counsel for the Plaintiff identified two issues for determination. The first was whether either party had breached the terms of the agreement between them. The second was whether the Defendant's Counterclaim was meritorious.
50. On the first issue, counsel submitted that the Letter of Offer dated 30 th June 2021, having been executed by both parties, constituted a binding agreement. It was submitted that the terms of the agreement were not in dispute and that the Plaintiff made the payments stipulated therein. Counsel pointed to the payments of USD 20,430.00 as Standard Premium and USD 6,129.00 as Security Deposit, which were made on different dates and received and acknowledged by the Defendant through official receipts.
51. Counsel submitted that the Defendant accepted the payments without objection as to either their mode or timing and continued to engage with the Plaintiff in relation to the transaction. It was argued that, having accepted and retained the payments, the Defendant could not subsequently rely on the timing of those payments as constituting a breach by the Plaintiff. Counsel relied on the doctrine of waiver and estoppel and on the decision in Abdalla & another v Sheheena Enterprises Limited (Civil Suit 45 of 2019) [2025] KEHC 9881 (KLR) .
52. Counsel further submitted that the Plaintiff's obligations under the arrangement had to be considered together with the Defendant's obligation to identify and hand over the property. It was contended that the Plaintiff intended to establish a steel manufacturing operation on the premises and therefore needed to ascertain the precise location, boundaries, physical condition, accessibility and suitability of the property before proceeding with the development.
53. Counsel submitted that the Plaintiff had made several requests to be shown the specific property and its beacons to enable it to undertake the necessary assessment and prepare for development. It was argued that those requests were not acted upon. Counsel placed particular reliance on the evidence of DW1 , who, according to counsel, acknowledged that the Plaintiff had not been handed possession of the property and that the maps said to have been shown to the Plaintiff had not been produced in evidence.
54. Counsel contended that the Plaintiff had already made substantial financial commitments towards the transaction and that its request to inspect and identify the property was therefore reasonable in the circumstances. The Court was urged to consider the Plaintiff's requests for inspection alongside the payments it had made and not to treat the subsequent failure to proceed with development as an unexplained or voluntary default.
55. On the alleged termination of the agreement, counsel submitted that the Defendant had failed to prove that the agreement was validly terminated. It was argued that although the Defendant relied on a notice dated 26 th September 2023, there was insufficient evidence that the notice was served upon the Plaintiff. Counsel further submitted that this was contrary to the contractual requirement for written notice of termination.
56. Counsel consequently submitted that the Defendant was in breach of its obligations under the agreement and that the Plaintiff was entitled to the reliefs sought in the Plaint. In the alternative, counsel submitted that the sums paid by the Plaintiff ought to be refunded. Counsel relied on the principle of restitution and on the decision in Abdalla & another v Sheheena Enterprises Limited (Civil Suit 45 of 2019) [2025] KEHC 9881 (KLR) . Counsel argued that the Defendant ought not to retain the Plaintiff's payments where the Plaintiff had not received the contractual benefit for which the payments were made.
57. On the Counterclaim, counsel submitted that the Defendant's claim for rent was founded on the premise that the Plaintiff had been placed in possession of the property and had thereafter failed to utilize or develop it. That premise, counsel argued, was not supported by the evidence. Counsel maintained that the property had never been handed over to the Plaintiff and that the Plaintiff had not been given possession of the specific portions that were the subject of the agreement.
58. Counsel therefore submitted that the Defendant could not recover rent in respect of property which, according to the Plaintiff's case, had never been handed over to it. Counsel again relied in Abdalla & another v Sheheena Enterprises Limited to support the submission that a party should not benefit from its own breach of the agreement.
59. Counsel urged the Court to find that the Plaintiff had proved its case, grant the reliefs sought in the Plaint and dismiss the Defendant's Counterclaim with costs.
The Defendant's Submissions
60. The Defendant's written submissions dated 17 th August 2026 were filed through M/s K.K. & Associates Law.
61. Counsel for the Defendant identified four issues for determination:
a) Whether the letter of offer dated 30 th June, 2021 constituted a binding agreement between the parties;
b) Whether the Plaintiff breached its terms;
c) Whether the termination of the lease was lawful; and
d) Whether the Defendant had proved its Counterclaim for rent arrears of USD 33,128.05.
62. On the first issue, counsel submitted that the Plaintiff accepted and executed the Letter of Offer and was therefore bound by its express terms. Reliance was placed on National Bank of Kenya Ltd v Pipeplastic Samkolit (K) Ltd & another [2001] KECA 362 (KLR) for the proposition that a court cannot rewrite a contract between parties and that parties remain bound by the terms of their agreement unless coercion, fraud or undue influence is pleaded and proved.
63. Counsel submitted that none of those vitiating factors had been pleaded or proved by the Plaintiff. In particular, it was argued that the Plaintiff's allegation concerning oral representations as to the flood-prone nature of the suit properties was unsupported by evidence and could not be relied upon to vary the express terms of the written agreement.
64. Counsel further relied on section 66(1)(a) of the Land Act , which implies in every lease a covenant requiring the lessee to pay the rent reserved by the lease at the times and in the manner specified in the lease. It was submitted that the Plaintiff was consequently bound to comply with its payment obligations under the agreement.
65. On breach, counsel submitted that the Plaintiff was aware of the importance of timely compliance, having previously failed to comply with the requirements of the Letter of Offer dated 19 th August 2019, which consequently lapsed. It was argued that, notwithstanding the fresh offer made in 2021, the Plaintiff did not complete payment of the Security Deposit until 25 th April 2023, approximately 20 months after the commencement date of 1 st August 2021.
66. Counsel further submitted that the Plaintiff failed to provide the Environmental Impact Assessment licence and the project plans or drawings required under the agreement and did not develop the suit properties within the stipulated two-year period. It was also submitted that rent remained unpaid for the years 2021, 2022 and 2023, resulting in arrears of USD 33,128.05. These matters, counsel argued, constituted breaches of the agreement.
67. Counsel relied on Diamond Homes Limited v Shapi [2024] KECA 1161 (KLR) for the proposition that the Court's task in determining a contractual dispute is to give effect to the intention of the parties as discerned from the contractual documents and their conduct. It was submitted that the Court should therefore give effect to the terms agreed by the parties notwithstanding that some of those terms may operate to the disadvantage of the Plaintiff.
68. On termination, counsel relied on section 65(2)(b) of the Land Act and submitted that the provision empowers a lessor to terminate a lease by notice where rent remains unpaid for one month after the due date or where the lessee has failed for one month to observe or perform a condition, covenant or other term of the lease.
69. Counsel submitted that the termination notice dated 26 th September 2023 was issued after the expiry of the two-year development period and at a time when rent remained outstanding. It was further submitted that the Plaintiff neither remedied the alleged breaches after receipt of the notice nor sought relief against forfeiture.
70. Counsel also addressed the Plaintiff's subsequent request for substitution of the suit properties. It was submitted that the request, dated 12 th November 2024, was made after termination of the lease and that there was consequently no subsisting leasehold interest capable of being substituted. The Defendant was therefore said to have been entitled to decline the request.
71. In relation to the Counterclaim, counsel submitted that the Defendant was entitled to recover the unpaid rent notwithstanding the termination of the lease. It was further submitted that the Standard Premium was expressly non-refundable under the Letter of Offer and that the Security Deposit could only be applied towards the first year's rent subject to compliance with the terms of the agreement.
72. Counsel concluded that the Plaintiff had failed to prove its entitlement to specific performance, refund, injunctive relief or damages. The Court was accordingly urged to dismiss the suit with costs and enter judgment for the Defendant on the Counterclaim as prayed.
Issues for Determination
73. Having carefully considered the pleadings, the evidence adduced and the submissions of the parties, the following issues commend themselves for determination.
74. The issues which arise for determination on the Plaintiff's claim are:
a) Whether there was a valid and binding contract between the parties.
b) Whether the Defendant waived its right to insist on strict compliance with payment timelines.
c) Whether the Defendant placed the Plaintiff in a position where it could perform the development obligation.
d) Whether the Defendant lawfully terminated the agreement.
e) Whether the Plaintiff is entitled to the reliefs sought.
75. The issues which arise for determination on the Defendant's Counter-Claim are:
a) Whether the Defendant is entitled to rental arrears of USD 33,128.05.
b) Whether the Defendant is entitled to general damages.
c) Who should bear the costs of the suit?
ANALYSIS AND DETERMINATION
Whether there was a valid and binding contract between the parties
76. The first issue is whether the Letter of Offer dated 30 th June 2021 constituted a valid and binding contract between the parties. On this issue, there is little controversy. Both parties rely on the Letter of Offer as the instrument governing their relationship, although they differ on whether its terms were subsequently breached and whether the arrangement was lawfully terminated.
77. The Letter of Offer identified the parties, the property, the proposed term of the lease, the commencement date, the rent and other financial obligations, the development requirements and the circumstances in which the arrangement could be terminated. It was signed by the Defendant on 30 th June 2021 and accepted and signed by the Plaintiff on 29 th July 2021. More significantly, under the heading “Execution of Lease/Breach of the Covenants”, it provided:
“Until such time as the standard form of lease hereafter referred to has been executed and registered, all the covenants and conditions and the rent agreed shall be deemed to be incorporated in this letter.”
78. The foregoing provision demonstrates that the parties did not intend their obligations to remain in abeyance until execution and registration of the standard lease. On the contrary, they expressly agreed that the stipulated covenants, conditions and rent would govern their relationship pending execution and registration of that lease.
79. The fact that a formal lease was not subsequently executed and registered does not, in the circumstances, mean that there was no binding agreement between the parties. In Chon Jeuk Suk Kim & another v E. J. Austin & 2 others [2013] KECA 150 (KLR), the Court of Appeal cited with approval the decision in Souza Figneiredo v Moorings Hotel Co. Ltd [1960] EA 926 , where Sir Kenneth O'Connor P stated:
" As already stated the Ordinance avoids the creation of an estate or interest in land by unregistered instruments but there is nothing in the Ordinance which renders such instruments ineffectual as contracts between the parties to them."
80. The Court of Appeal further held:
"Those decisions show that an agreement of a lease or unregistered lease where the statute requires registration, though not conferring any legal or equitable estate is nevertheless enforceable as contract between the parties for the period stated in the document and the non-registration does not preclude the use of the document to show the terms of contract between the parties."
81. The same principle was affirmed in Yusuf Mohammed Jiwa t/a Jiwa Properties & another v Mwangi & 2 others [2024] KECA 38 (KLR), where the Court of Appeal held:
"Be that as it may, the respondents having signed the Letter of offer meant that the parties were bound by the terms, which included an agreement to lease the suit premises to the respondents for a fixed term of 5 years and 6 months."
82. In the present case, the Plaintiff accepted the Letter of Offer and thereafter made payments towards the Standard Premium and Security Deposit, which payments the Defendant received and acknowledged. The Defendant, for its part, continued to demand payment and subsequently relied upon the terms of the Letter of Offer in seeking to terminate the arrangement and in advancing
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1. Imagine a man who sells you a plot of land. He takes your money. He refuses to tell you where the plot is. He refuses to give you a map. He refuses to hand over the keys. Then, when you do not build on the plot, he terminates the agreement and keeps your money.
2. That, stripped to its essentials, is the case before me.
3. The Plaintiff, ISL Kenya Limited, is a limited liability company registered under the Companies Act, Chapter 488 Laws of Kenya (repealed). The Defendant, Export Processing Zones Authority (EPZA), is a state corporation established under the Export Processing Zones Act, Cap 517 Laws of Kenya, with the mandate to promote and facilitate export-oriented investments.
4. The dispute arises from an arrangement between the parties concerning the lease of land known as L.R. No. 18474/218, Portions C1 and C2 (the suit property), situated within the Athi River Export Processing Zone. The Plaintiff’s case is that the arrangement was formalized through a Letter of Offer dated 30 th June 2021, which it accepted on 29 th July 2021, and that it thereafter made substantial payments towards the Stand Premium, Security Deposit and Business Service Permit.
The Plaintiff's Case
5. The Plaintiff’s case is set out in the Plaint dated 11 th June 2025. It avers that, following discussions between the parties regarding the lease of the subject land, the Defendant issued a Letter of Offer dated 19 th August 2019 to the Plaintiff in respect of the lease of L.R. No. 18474/218, Portions C1 and C2. The Plaintiff duly acknowledged and signed the letter, and returned it on 2 nd September 2019.
6. Following discussions between the parties, the Defendant issued a Letter of Offer dated 19 th August 2019 in respect of the proposed lease. The Plaintiff accepted the offer, signed it and returned it to the Defendant on 2 nd September 2019.
7. Pursuant to that offer, pro forma invoices were issued for a Stand Premium of USD 23,698, a Security Deposit of USD 6,129, making a total of USD 29,827, and Business Service Permit fees of Kshs. 20,000.
8. The Plaintiff’s case is set out in the Plaint dated 11 th June 2025. It avers that, following discussions between the parties regarding the lease of the subject land, the Defendant issued a Letter of Offer dated 19 th August 2019 to the Plaintiff in respect of the lease of L.R. No. 18474/218, Portions C1 and C2. The Plaintiff duly acknowledged and signed the letter, and returned it on 2nd September 2019.
9. The Plaintiff subsequently made a further request for an extension by a letter dated 14 th June 2021. It states that the request was accepted and that, consequently, the Defendant issued a fresh Letter of Offer dated 30 th June 2021. The Plaintiff accepted the new offer on 29 th July 2021.
10. The Plaintiff's case is that it thereafter made payments towards the consideration stipulated by the Defendant. The payments were made as follows:
a) USD 23,698.80 towards the Stand Premium on 23 rd August 2021;
b) USD 2,860.20 towards the Security Deposit on 23 rd August 2021;
c) USD 1,984.85 towards the Security Deposit on 28 th March 2023;
d) USD 1,283.95 as the balance of the Security Deposit on 25 th April 2023; and
e) Kshs. 20,000 towards the Business Service Permit on 25 th April 2023.
11. The Plaintiff therefore maintains that it paid the entire Standard Premium and Security Deposit demanded by the Defendant, together with the Business Service Permit fees.
12. The Plaintiff further states that, after making the payments, it made several requests to the Defendant to be shown the subject property. According to the Plaintiff, the Defendant did not act on those requests.
13. It is the Plaintiff's case that, in the course of its dealings with the Defendant, it was informed orally that the subject property was within a flood-prone area. On that basis, the Plaintiff requested that the allocated portions be substituted with other plots. The request was declined, according to the Plaintiff, on the basis that the lease had already been terminated on 25 th December 2023.
14. The Plaintiff subsequently discovered, it alleges, that the representation concerning the flood-prone nature of the property was false and misleading.
15. The Plaintiff further states that, in anticipation of taking up the premises, it expended considerable time, money and other resources in preparing to relocate its operations, including taking steps towards decommissioning its plant.
16. The Plaintiff's position is that it paid a total of USD 29,827.80 and Kshs. 20,000 to the Defendant, but did not receive the lease or possession of the subject property.
17. On that basis, the Plaintiff seeks the following reliefs:
a) An order of specific performance of the lease agreement entered into with respect to Plot No. 18474/224 C1 and C2 vide a letter of offer which was issued on 30 th June, 2021 and subsequently accepted on 29 th July, 2021;
b) In the alternative to prayer (a) above, an order directing the Defendant to fully refund the Plaintiff the full amount paid as per the payment schedule in paragraph 4 of the Plaint, together with costs and interest;
c) General damages for breach of contract/lease agreement;
d) A permanent injunction restricting the Defendant by itself, its servants, agents and/or employees or whoever is acting on its behalf and/or instructions from trespassing onto, alienating, advertising for lease, offering for lease, taking possession of, leasing, transferring, disposing of or in any manner whatsoever interfering with Plot No. 18474/224 C1 and C2 as leased out to the Plaintiff for the period of the lease agreement;
e) Costs of the suit together with interest thereon at such rate and for such period as this Court may deem fit to order; and
f) Any other just and equitable relief as this Court may deem appropriate.
The Defendant's Case
18. The Defendant filed a Statement of Defence and Counterclaim dated 23 rd July 2025 and denies liability to the Plaintiff.
19. It is the Plaintiff's case that, in the course of its dealings with the Defendant, it was informed orally that the subject property was within a flood-prone area. On that basis, the Plaintiff requested that the allocated portions be substituted with other plots. The request was declined, according to the Plaintiff, on the basis that the lease had already been terminated on 25 th December 2023.
20. The Defendant states that the Plaintiff subsequently appealed against that position and that, following the appeal, a fresh Letter of Offer dated 30 th June 2021 was issued. The new offer provided for a 50-year lease commencing on 1 st August 2021.
21. The Defendant maintains that the Plaintiff again failed to comply with the terms of the new offer, particularly the requirements relating to payment and commencement of the proposed development.
22. The Defendant denies that the Plaintiff was denied an opportunity to inspect the subject property. Its case is that, before issuing a Letter of Offer, it is standard practice to show an investor the general location and boundaries of the allocated property and to provide relevant site information. The Defendant nevertheless maintains that the Plaintiff remained in breach because it did not make the required Standard Premium and Security Deposit within the stipulated period.
23. The Defendant further states that the agreement was lawfully terminated by a notice dated 26 th September 2023.
24. As regards the monies paid by the Plaintiff, the Defendant contends that the Standard Premium was expressly non-refundable, while the Security Deposit was to be applied towards the first year's rent subject to the Plaintiff's compliance with the terms of the agreement.
25. In its Counterclaim, the Defendant alleges that the Plaintiff was required to pay annual rent of USD 12,258 and develop the properties within two years from the commencement of the lease. It contends that the Plaintiff failed to develop the properties and accumulated rent arrears for the years 2021, 2022 and 2023 amounting to USD 33,128.05.
26. The Defendant consequently seeks the following reliefs:
a) An order that the Plaintiff is in rental arrears of United States Dollars Thirty-Three Thousand One Hundred and Twenty-Eight and Five Cents Only (USD 33,128.05);
b) General damages;
c) Costs of the suit; and
d) Any other relief which this Court may deem fit to grant.
27. The Plaintiff filed a Reply to Defence and Defence to Counterclaim dated 6 th September, 2025. It denied breaching the terms of the letter of offer and maintained that the Defendant accepted its payments. It also denied receiving the alleged termination notice and stated that it only learnt of the termination through the Defendant’s letter dated 26 th February, 2025.
28. In answer to the Counterclaim, the Plaintiff denied liability for the alleged rent arrears and maintained that it could not develop the properties because they had neither been formally handed over nor made available for inspection.
29. The suit proceeded to hearing on 6 th July 2026, when both parties presented their respective cases.
THE EVIDENCE
The Plaintiff's Evidence
30. The Plaintiff called one witness, John Mburu (PW1), a Director of the Plaintiff. He adopted his witness statement dated 11 th June 2025 and produced the documents accompanying the Plaintiff's case as Plaintiff's Exhibits 1 to 20 .
31 . PW1 testified that the Plaintiff paid a total of USD 29,827.80 towards the Standard Premium and Security Deposit, and a further Kshs. 20,000 towards the Business Service Permit. His evidence was that the Defendant received the payments and issued official receipts in respect thereof.
32 . PW1's 1 evidence was that, having made the payments, the Plaintiff expected to be shown the physical location of the property, issued with the lease and thereafter handed possession of the premises. He maintained that the Plaintiff was never shown the specific portions allocated to it. He further testified that the Plaintiff raised the issue of the property's alleged location within a flood-prone area and subsequently sought a refund of the sums paid.
33. In cross-examination, PW1 acknowledged that the parties had initially dealt with the Letter of Offer dated 19 th August 2019 but that the arrangement did not proceed. He attributed this to the circumstances occasioned by the COVID-19 pandemic and confirmed that the 2019 offer subsequently lapsed. He further confirmed that a fresh Letter of Offer dated 30 th June 2021 was thereafter issued.
34 . PW1's evidence was that, although he understood the terms of the Letter of Offer, he regarded it as a document guiding the parties rather than as the registered lease itself. He nevertheless acknowledged that he understood its contractual significance. He also confirmed that the Standard Premium was stated to be non-refundable.
35. On the payments made under the 2021 Letter of Offer, PW1 stated that they were made on different dates and were accepted by the Defendant. He explained that the Defendant continued to demand for payment and received the sums as they were remitted. His evidence was that the Plaintiff had been shown the general area of the property during the earlier dealings but had never been shown the specific land allocated to it.
36 . PW1 further maintained that the Plaintiff remained ready to proceed with the transaction and that the final payment was made in 2023. His evidence was that, notwithstanding the payments made, the specific property was never pointed out to the Plaintiff.
37. During re-examination, PW1 maintained that no registered lease had been issued to the Plaintiff and that possession of the property had never been given to it. He stated that the Plaintiff had repeatedly requested to be shown the property to enable it to plan and prepare for the intended development, but that the Defendant's operational arm did not act upon those requests.
The Defendant's Evidence
38. The Defendant called one witness, Andrew Gichuku Njuru, who testified that he is an Assistant Manager Property at the EPZ Authority. He adopted his witness statement and produced documents as Defence Exhibit 1 to 6.
39 . DW1 explained the Defendant's process for allocating property within the Export Processing Zones. His evidence was that the process begins with a Letter of Offer setting out the applicable terms and conditions. The investor is required to make the stipulated payments within the validity period of the offer. Upon compliance with those requirements, the property is formally handed over to the investor.
40 . DW1 f urther explained that an investor is expected to undertake due diligence concerning the property and that, before handover, the investor would ordinarily be shown the location of the property on a map. He maintained that the Plaintiff had not complied with the terms of the Letter of Offer.
41. During cross-examination, however, DW1 acknowledged that there had been correspondence from the Plaintiff requesting to be shown the property before proceeding with compliance. He further confirmed that the property had not been handed over to the Plaintiff. While he maintained that the Plaintiff had been shown the physical location of the property, he accepted that the map said to have been provided during an earlier site visit had not been produced in evidence.
42 . DW1's evidence on the sequence of compliance and handover was that the Plaintiff was required to make the stipulated payments before the property could be shown to it. He nevertheless confirmed that the Plaintiff had requested to be shown the property before completing compliance. He maintained that the Plaintiff was initially in breach of the terms of the Letter of Offer.
43. On the issue of the alleged flood zone, DW1 stated that the Defendant was not aware of that issue. He explained that maps and survey reports had not subsequently been availed to the Plaintiff because, according to the Defendant's position, the Plaintiff was already in breach. He nevertheless maintained that the maps had previously been shown to the Plaintiff, although the maps themselves were not produced in evidence.
44. On termination, DW1 referred to a notice dated 26 th September 2023 and maintained that the Plaintiff had been shown the general area of the land and had accepted the conditions contained in the Letter of Offer. He further maintained that, upon execution of the Letter of Offer, it became the operative agreement governing the parties' relationship.
45. The evidence of the two witnesses establishes some matters which are not seriously in dispute. The parties initially dealt with the 2019 Letter of Offer, which subsequently lapsed, and thereafter proceeded on the basis of the Letter of Offer dated 30 th June 2021. It is also common ground that the Plaintiff made the payments evidenced by the receipts produced in court and that those payments were received by the Defendant.
46. The evidence is, however, in dispute as to the circumstances in which the Plaintiff was expected to undertake due diligence, make the stipulated payments, obtain identification and handover of the property, and commence development. There is also a dispute concerning the alleged termination of the arrangement and the circumstances in which the notice dated 26 th September 2023 was issued. These matters fall for determination from the contractual documents and the evidence as a whole.
SUBMISSIONS
47. After the respective cases closed, the Court directed the parties to exchange written submissions within 30 days.
The Plaintiff's Submissions
48. The Plaintiff's written submissions dated 12 th August 2026, filed through M/s Nderu Ngaruni & Kimeru Advocates , were filed outside the period prescribed by the Court. I have nevertheless in the interest of justice considered the submissions in determining the issues arising in the suit.
49. Counsel for the Plaintiff identified two issues for determination. The first was whether either party had breached the terms of the agreement between them. The second was whether the Defendant's Counterclaim was meritorious.
50. On the first issue, counsel submitted that the Letter of Offer dated 30 th June 2021, having been executed by both parties, constituted a binding agreement. It was submitted that the terms of the agreement were not in dispute and that the Plaintiff made the payments stipulated therein. Counsel pointed to the payments of USD 20,430.00 as Standard Premium and USD 6,129.00 as Security Deposit, which were made on different dates and received and acknowledged by the Defendant through official receipts.
51. Counsel submitted that the Defendant accepted the payments without objection as to either their mode or timing and continued to engage with the Plaintiff in relation to the transaction. It was argued that, having accepted and retained the payments, the Defendant could not subsequently rely on the timing of those payments as constituting a breach by the Plaintiff. Counsel relied on the doctrine of waiver and estoppel and on the decision in Abdalla & another v Sheheena Enterprises Limited (Civil Suit 45 of 2019) [2025] KEHC 9881 (KLR) .
52. Counsel further submitted that the Plaintiff's obligations under the arrangement had to be considered together with the Defendant's obligation to identify and hand over the property. It was contended that the Plaintiff intended to establish a steel manufacturing operation on the premises and therefore needed to ascertain the precise location, boundaries, physical condition, accessibility and suitability of the property before proceeding with the development.
53. Counsel submitted that the Plaintiff had made several requests to be shown the specific property and its beacons to enable it to undertake the necessary assessment and prepare for development. It was argued that those requests were not acted upon. Counsel placed particular reliance on the evidence of DW1 , who, according to counsel, acknowledged that the Plaintiff had not been handed possession of the property and that the maps said to have been shown to the Plaintiff had not been produced in evidence.
54. Counsel contended that the Plaintiff had already made substantial financial commitments towards the transaction and that its request to inspect and identify the property was therefore reasonable in the circumstances. The Court was urged to consider the Plaintiff's requests for inspection alongside the payments it had made and not to treat the subsequent failure to proceed with development as an unexplained or voluntary default.
55. On the alleged termination of the agreement, counsel submitted that the Defendant had failed to prove that the agreement was validly terminated. It was argued that although the Defendant relied on a notice dated 26 th September 2023, there was insufficient evidence that the notice was served upon the Plaintiff. Counsel further submitted that this was contrary to the contractual requirement for written notice of termination.
56. Counsel consequently submitted that the Defendant was in breach of its obligations under the agreement and that the Plaintiff was entitled to the reliefs sought in the Plaint. In the alternative, counsel submitted that the sums paid by the Plaintiff ought to be refunded. Counsel relied on the principle of restitution and on the decision in Abdalla & another v Sheheena Enterprises Limited (Civil Suit 45 of 2019) [2025] KEHC 9881 (KLR) . Counsel argued that the Defendant ought not to retain the Plaintiff's payments where the Plaintiff had not received the contractual benefit for which the payments were made.
57. On the Counterclaim, counsel submitted that the Defendant's claim for rent was founded on the premise that the Plaintiff had been placed in possession of the property and had thereafter failed to utilize or develop it. That premise, counsel argued, was not supported by the evidence. Counsel maintained that the property had never been handed over to the Plaintiff and that the Plaintiff had not been given possession of the specific portions that were the subject of the agreement.
58. Counsel therefore submitted that the Defendant could not recover rent in respect of property which, according to the Plaintiff's case, had never been handed over to it. Counsel again relied in Abdalla & another v Sheheena Enterprises Limited to support the submission that a party should not benefit from its own breach of the agreement.
59. Counsel urged the Court to find that the Plaintiff had proved its case, grant the reliefs sought in the Plaint and dismiss the Defendant's Counterclaim with costs.
The Defendant's Submissions
60. The Defendant's written submissions dated 17 th August 2026 were filed through M/s K.K. & Associates Law.
61. Counsel for the Defendant identified four issues for determination:
a) Whether the letter of offer dated 30 th June, 2021 constituted a binding agreement between the parties;
b) Whether the Plaintiff breached its terms;
c) Whether the termination of the lease was lawful; and
d) Whether the Defendant had proved its Counterclaim for rent arrears of USD 33,128.05.
62. On the first issue, counsel submitted that the Plaintiff accepted and executed the Letter of Offer and was therefore bound by its express terms. Reliance was placed on National Bank of Kenya Ltd v Pipeplastic Samkolit (K) Ltd & another [2001] KECA 362 (KLR) for the proposition that a court cannot rewrite a contract between parties and that parties remain bound by the terms of their agreement unless coercion, fraud or undue influence is pleaded and proved.
63. Counsel submitted that none of those vitiating factors had been pleaded or proved by the Plaintiff. In particular, it was argued that the Plaintiff's allegation concerning oral representations as to the flood-prone nature of the suit properties was unsupported by evidence and could not be relied upon to vary the express terms of the written agreement.
64. Counsel further relied on section 66(1)(a) of the Land Act , which implies in every lease a covenant requiring the lessee to pay the rent reserved by the lease at the times and in the manner specified in the lease. It was submitted that the Plaintiff was consequently bound to comply with its payment obligations under the agreement.
65. On breach, counsel submitted that the Plaintiff was aware of the importance of timely compliance, having previously failed to comply with the requirements of the Letter of Offer dated 19 th August 2019, which consequently lapsed. It was argued that, notwithstanding the fresh offer made in 2021, the Plaintiff did not complete payment of the Security Deposit until 25 th April 2023, approximately 20 months after the commencement date of 1 st August 2021.
66. Counsel further submitted that the Plaintiff failed to provide the Environmental Impact Assessment licence and the project plans or drawings required under the agreement and did not develop the suit properties within the stipulated two-year period. It was also submitted that rent remained unpaid for the years 2021, 2022 and 2023, resulting in arrears of USD 33,128.05. These matters, counsel argued, constituted breaches of the agreement.
67. Counsel relied on Diamond Homes Limited v Shapi [2024] KECA 1161 (KLR) for the proposition that the Court's task in determining a contractual dispute is to give effect to the intention of the parties as discerned from the contractual documents and their conduct. It was submitted that the Court should therefore give effect to the terms agreed by the parties notwithstanding that some of those terms may operate to the disadvantage of the Plaintiff.
68. On termination, counsel relied on section 65(2)(b) of the Land Act and submitted that the provision empowers a lessor to terminate a lease by notice where rent remains unpaid for one month after the due date or where the lessee has failed for one month to observe or perform a condition, covenant or other term of the lease.
69. Counsel submitted that the termination notice dated 26 th September 2023 was issued after the expiry of the two-year development period and at a time when rent remained outstanding. It was further submitted that the Plaintiff neither remedied the alleged breaches after receipt of the notice nor sought relief against forfeiture.
70. Counsel also addressed the Plaintiff's subsequent request for substitution of the suit properties. It was submitted that the request, dated 12 th November 2024, was made after termination of the lease and that there was consequently no subsisting leasehold interest capable of being substituted. The Defendant was therefore said to have been entitled to decline the request.
71. In relation to the Counterclaim, counsel submitted that the Defendant was entitled to recover the unpaid rent notwithstanding the termination of the lease. It was further submitted that the Standard Premium was expressly non-refundable under the Letter of Offer and that the Security Deposit could only be applied towards the first year's rent subject to compliance with the terms of the agreement.
72. Counsel concluded that the Plaintiff had failed to prove its entitlement to specific performance, refund, injunctive relief or damages. The Court was accordingly urged to dismiss the suit with costs and enter judgment for the Defendant on the Counterclaim as prayed.
Issues for Determination
73. Having carefully considered the pleadings, the evidence adduced and the submissions of the parties, the following issues commend themselves for determination.
74. The issues which arise for determination on the Plaintiff's claim are:
a) Whether there was a valid and binding contract between the parties.
b) Whether the Defendant waived its right to insist on strict compliance with payment timelines.
c) Whether the Defendant placed the Plaintiff in a position where it could perform the development obligation.
d) Whether the Defendant lawfully terminated the agreement.
e) Whether the Plaintiff is entitled to the reliefs sought.
75. The issues which arise for determination on the Defendant's Counter-Claim are:
a) Whether the Defendant is entitled to rental arrears of USD 33,128.05.
b) Whether the Defendant is entitled to general damages.
c) Who should bear the costs of the suit?
ANALYSIS AND DETERMINATION
Whether there was a valid and binding contract between the parties
76. The first issue is whether the Letter of Offer dated 30 th June 2021 constituted a valid and binding contract between the parties. On this issue, there is little controversy. Both parties rely on the Letter of Offer as the instrument governing their relationship, although they differ on whether its terms were subsequently breached and whether the arrangement was lawfully terminated.
77. The Letter of Offer identified the parties, the property, the proposed term of the lease, the commencement date, the rent and other financial obligations, the development requirements and the circumstances in which the arrangement could be terminated. It was signed by the Defendant on 30 th June 2021 and accepted and signed by the Plaintiff on 29 th July 2021. More significantly, under the heading “Execution of Lease/Breach of the Covenants”, it provided:
“Until such time as the standard form of lease hereafter referred to has been executed and registered, all the covenants and conditions and the rent agreed shall be deemed to be incorporated in this letter.”
78. The foregoing provision demonstrates that the parties did not intend their obligations to remain in abeyance until execution and registration of the standard lease. On the contrary, they expressly agreed that the stipulated covenants, conditions and rent would govern their relationship pending execution and registration of that lease.
79. The fact that a formal lease was not subsequently executed and registered does not, in the circumstances, mean that there was no binding agreement between the parties. In Chon Jeuk Suk Kim & another v E. J. Austin & 2 others [2013] KECA 150 (KLR), the Court of Appeal cited with approval the decision in Souza Figneiredo v Moorings Hotel Co. Ltd [1960] EA 926 , where Sir Kenneth O'Connor P stated:
" As already stated the Ordinance avoids the creation of an estate or interest in land by unregistered instruments but there is nothing in the Ordinance which renders such instruments ineffectual as contracts between the parties to them."
80. The Court of Appeal further held:
"Those decisions show that an agreement of a lease or unregistered lease where the statute requires registration, though not conferring any legal or equitable estate is nevertheless enforceable as contract between the parties for the period stated in the document and the non-registration does not preclude the use of the document to show the terms of contract between the parties."
81. The same principle was affirmed in Yusuf Mohammed Jiwa t/a Jiwa Properties & another v Mwangi & 2 others [2024] KECA 38 (KLR), where the Court of Appeal held:
"Be that as it may, the respondents having signed the Letter of offer meant that the parties were bound by the terms, which included an agreement to lease the suit premises to the respondents for a fixed term of 5 years and 6 months."
82. In the present case, the Plaintiff accepted the Letter of Offer and thereafter made payments towards the Standard Premium and Security Deposit, which payments the Defendant received and acknowledged. The Defendant, for its part, continued to demand payment and subsequently relied upon the terms of the Letter of Offer in seeking to terminate the arrangement and in advancing
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