1. This dispute centres on the enforcement of commercial lease obligations and the collateral liability of guarantors following a substantial default by the principal tenant.
2. The Plaintiff, Sony Holdings Limited, seeks the enforcement of a commercial lease agreement and its corresponding guarantees.
3. The 1st Defendant is the principal tenant. The 2nd, 3rd, 4th, and 5th Defendants are sued in their capacities as guarantors.
4. At the outset, the Court takes note of the procedural posture of this matter. On 18th January, 2023, an interlocutory judgment was entered against the 1st and 2nd Defendants for the sums claimed.
Background Facts
5. The present proceedings solely concern the enforcement of the guarantees against the 3rd, 4th, and 5th Defendants.
6. The Plaintiff is the registered proprietor of the commercial building known as "Westgate Shopping Mall" situated in Nairobi.
7. By a Lease Agreement dated 10th January, 2019, the Plaintiff leased premises within the mall to the 1st Defendant. The lease was for a term of six (6) years.
8. The 2nd, 3rd, 4th, and 5th Defendants executed the Lease Agreement as Guarantors under Clause 7. They jointly and severally guaranteed the payment of rent and other sums payable under the Lease.
9. The 1st Defendant took possession of the premises and commenced operations. However, it subsequently fell into arrears.
10. Despite numerous demands and reminders issued by the Plaintiff, the default persisted. The Plaintiff ultimately exercised its right of re-entry on 12th November, 2020.
11. The Plaintiff instituted this suit seeking the following primary reliefs:
a) A Declaration that the 1st Defendant breached the Lease Agreement dated 10th January 2019 entered into between the parties.
b) Special damages in the sums of USD 776,381.10 and Kshs. 25,033,021.95.
c) An order that the Defendants are jointly and severally liable to pay Interest on the above amounts at the rate of LIBOR plus 8% for the amounts in USD and 24% per annum for the amounts in Kenya Shillings as stipulated under clause 4.17 of the lease from the date of default until payment in full.
d) Costs.
12. The contract breached is the Lease Agreement dated 10th January, 2019.
13. The particulars of breach expressly pleaded by the Plaintiff include:
a) Despite the clear payment obligations imposed on the 1st Defendant during the term of the lease, the 1st Defendant unequivocally failed to remit the rent & AC amortization charges, service charge, promotion fund, the outgoings and utilities including electricity bills as and when they fell due and continues to be in such default;
b) Despite numerous reminders vide letters dated 4th November, 2019, 26th February, 2020 and 1st April, 2020, the 1st Defendant failed, declined, refused and/or ignored to execute and forward to the Plaintiff the Maintenance contracts in place with various suppliers in respect of the Plaintiff’s chattels including the maintenance contract with Ultra Equipment Limited;
c) Despite demand, the 1st Defendant failed to carry out regular and routine repair and/or maintenance works in regard to the Plaintiff's chattels;
d) Despite the 1st Defendant failing to pay the rent or any other sum due under the Lease within seven (7) days of the due date, the Defendants have jointly and severally failed, ignored and/or neglected to pay the interests which continue to accrue.
14. The 3rd, 4th, and 5th Defendants entered an appearance and filed a Statement of Defence.
15. They admitted that the 1st Defendant entered into the lease with the Plaintiff on 10th January, 2019. They also explicitly admitted joining the lease as guarantors.
16. Their main lines of defence were threefold:
(i) First, they averred that the suit against them was immature and incompetent as they were merely guarantors to the 1st Defendant.
(ii) Second, they pleaded that the 1st Defendant was unable to fulfil its obligations due to an Act of God and force majeure, specifically the advent of the COVID-19 pandemic and subsequent government directives that forced the closure of gymnasiums.
(iii) Third, they alleged that partial payments amounting to USD 428,712.55 and Kshs. 16,172,291.20 were made to the Plaintiff, alongside Kshs. 17,872,126.52 paid to the Plaintiff's agents, which ought to have been credited to the 1st Defendant's account.
17. The trial of this matter took a distinct trajectory. The 3rd, 4th and 5th Defendants' advocates on record applied to cease acting. The Court allowed this application on 5th May, 2025. It thereafter directed that the 3rd, 4th and 5th Defendants be served with a hearing notice by substituted service using an International Courier service.
18. When the matter came up for hearing, the Defendants failed to attend.
19. Despite having filed a joint Statement of Defence and a Witness Statement by one Schalk James Burger Hugo, the 3rd, 4th, and 5th Defendants did not call any witnesses to testify. They did not participate in the trial.
20. The Plaintiff's case proceeded undefended. The Plaintiff called its sole witness, Mr. Alex Trachtenberg (PW-1).
Issues for Determination
21. Upon analysing the pleadings, the uncontroverted evidence on record, and the written submissions by the Plaintiff’s Counsel, the Court frames the following three (3) main issues for determination:
a) What is the evidential effect of the 3rd, 4th, and 5th Defendants' failure to attend trial and tender evidence in support of their Statement of Defence?
b) Whether the Plaintiff is entitled to enforce the Guarantees against the 3rd, 4th, and 5th Defendants under the Lease Agreement dated 10th January 2019.
c) What are the appropriate reliefs to grant?
Analysis
22. The Court notes that though a defence was filed the Defendants did not participate in the actual trial.
a) What is the evidential effect of the 3rd, 4th, and 5th Defendants' failure to attend trial and tender evidence in support of their Statement of Defence?
23. The 3rd, 4th, and 5th Defendants filed a Statement of Defence and a bundle of documents. They also filed a witness statement. However, they abandoned the trial.
24. It is trite law that pleadings do not constitute evidence. A party who pleads a fact must prove it.
25. By failing to attend Court and call a witness to adopt their statement and produce their documents, the Defendants' bundle of documents remained merely marked for identification.
26. The Court is guided by the binding decision of the Court of Appeal in Kenneth Nyaga Mwige v Austin Kiguta & 2 others [2015] KECA 334 (KLR). It was authoritatively held that the mere marking of a document for identification does not dispense with its formal proof. A document marked for identification only becomes part of the evidential record when formally produced as an exhibit by a witness.
27. The High Court in Mukaba Investments Limited v Quadco Two Hundred & Forty-Four Limited [2024] KEHC 15486 (KLR) affirmed this principle. It ruled that a Court cannot interrogate the contents of a bundle of documents if they do not form part of the evidence. Consequently, the Defendants' unproduced documents carry zero evidential weight.
28. Regarding the unproven Statement of Defence, this Court finds refuge in the persuasive holding of Trust Bank Limited V Paramount Universal Bank Limited & 2 Others [2009] KEHC 4030 (KLR). The Court held that where a party fails to call evidence in support of its case, that party's pleadings remain mere statements of fact. In doing so, the party fails to substantiate its pleadings.
29. Similarly, in Motex Knitwear Limited V Gopitex Knitwear Mills Limited [2009] KEHC 4017 (KLR), the Court observed that the failure to adduce any evidence means that the evidence tendered by the Plaintiff stands uncontroverted and unchallenged.
30. The result is fatal to the defence. The averments concerning force majeure (COVID-19) and uncredited payments remain mere unproven allegations. The balance of probabilities tilts entirely in favour of the Plaintiff whose evidence stands unchallenged.
b) Whether the Plaintiff is entitled to enforce the Guarantees against the 3rd, 4th, and 5th Defendants under the Lease Agreement dated 10th January 2019.
31. The Court now turns to the core of this suit; the enforcement of the guarantees against the 3rd, 4th, and 5th Defendants.
32. Clause 7.1 of the Lease Agreement dated 10th January, 2019 is clear and unambiguous. It states that the Guarantors will pay the rents and make good to the Landlord on demand against all losses, damages, costs, and expenses arising as a result of such non-payment, non-performance, or non-observance.
33. A guarantee is an accessory contract where the surety undertakes to ensure the principal performs their obligations.
34. The 3rd, 4th, and 5th Defendants pleaded that the suit against them was immature. This argument is legally flawed.
35. The Court of Appeal in Kenindia Assurance Company Limited v First National Finance Bank Limited [2008] KECA 91 (KLR) was emphatic that a guarantor's obligation to pay is established upon default by the principal debtor and upon a demand of payment being made.
36. The High Court in Ebony Development Company Ltd V Standard Chartered Bank Ltd [2008] KEHC 1363 (KLR) further cemented this, stating that a guarantor becomes liable upon default by the principal debtor. That it is not the guarantor's role to see that the borrower complies, but rather to pay the guaranteed sum on demand.
37. The evidence before the Court confirms that the Plaintiff served final demand notices upon the Guarantors, including the demand letter dated 30th October, 2020.
38. Since interlocutory judgment was already entered against the 1st Defendant (the principal debtor) on 18th January 2023, the liability is crystallized. The 3rd, 4th, and 5th Defendants are therefore jointly and severally liable to the Plaintiff for the outstanding debt.
c) What are the appropriate reliefs to grant?
39. The Plaintiff has specifically pleaded and proved its claim for special damages.
40. Through PW-1, the Plaintiff established that upon the 1st Defendant vacating the premises, the outstanding rent and AC Amortization charges, service charge, promotion fund, and electricity bills amounted to USD 776,381.10 and Kshs. 25,033,021.95.
41. The Defendants failed to adduce any evidence to rebut these figures.
42. The Plaintiff also seeks contractual interest at the rate of LIBOR plus 8% for the USD amounts and 24% per annum for the Kenya Shillings amounts, as stipulated under Clause 4.17 of the Lease. Parties are bound by the four corners of their commercial agreements. The Court cannot rewrite a contract where the interest rates were expressly agreed upon. It has not been pleaded that the interest rates are illegal, excessive, oppressive, predatory or unconscionable. The Court of Appeal decision in National Bank of Kenya Ltd v Pipeplastic Samkolit (K) Ltd & another [2001] KECA 362 (KLR) has pronounced itself on this.
43. The Plaintiff has discharged its burden of proof on a balance of probabilities. The Defendants' failure to participate in the trial renders their defence unsubstantiated.
44. As to costs, the same lie at the discretion of this Court and ordinarily follow the event. The same are awarded to the successful Plaintiff.
Determination
45. The Court proceeds to enter Judgment for the Plaintiff against the Defendants, jointly and severally, as follows:
a) A Declaration is HEREBY issued that the 1st Defendant breached the Lease Agreement dated 10th January, 2019 entered into between the parties.
b) Special Damages are HEREBY awarded to the Plaintiff in the sums of USD 776,381.10 and Kshs. 25,033,021.95.
c) Interest is HEREBY awarded on the said sums at the rate of LIBOR plus 8% for the USD amount, and 24% per annum for the Kenya Shillings amount, calculated from the date of default until payment in full.
d) The Costs of this suit are HEREBY awarded to the Plaintiff.
46. It is so ordered.
DATED, SIGNED AND DELIVERED AT MILIMANI THIS 15TH DAY OF SEPTEMBER, 2026
NJOROGE BENJAMIN K.
JUDGE
In the presence of:
Mr William Ochieng for the Plaintiff.
N/A for the 1st and 2nd Defendants.
N/A for the 3rd, 4th and 5th Defendants.
Mr. John Paul - Court Assistant.
2. The Plaintiff, Sony Holdings Limited, seeks the enforcement of a commercial lease agreement and its corresponding guarantees.
3. The 1st Defendant is the principal tenant. The 2nd, 3rd, 4th, and 5th Defendants are sued in their capacities as guarantors.
4. At the outset, the Court takes note of the procedural posture of this matter. On 18th January, 2023, an interlocutory judgment was entered against the 1st and 2nd Defendants for the sums claimed.
Background Facts
5. The present proceedings solely concern the enforcement of the guarantees against the 3rd, 4th, and 5th Defendants.
6. The Plaintiff is the registered proprietor of the commercial building known as "Westgate Shopping Mall" situated in Nairobi.
7. By a Lease Agreement dated 10th January, 2019, the Plaintiff leased premises within the mall to the 1st Defendant. The lease was for a term of six (6) years.
8. The 2nd, 3rd, 4th, and 5th Defendants executed the Lease Agreement as Guarantors under Clause 7. They jointly and severally guaranteed the payment of rent and other sums payable under the Lease.
9. The 1st Defendant took possession of the premises and commenced operations. However, it subsequently fell into arrears.
10. Despite numerous demands and reminders issued by the Plaintiff, the default persisted. The Plaintiff ultimately exercised its right of re-entry on 12th November, 2020.
11. The Plaintiff instituted this suit seeking the following primary reliefs:
a) A Declaration that the 1st Defendant breached the Lease Agreement dated 10th January 2019 entered into between the parties.
b) Special damages in the sums of USD 776,381.10 and Kshs. 25,033,021.95.
c) An order that the Defendants are jointly and severally liable to pay Interest on the above amounts at the rate of LIBOR plus 8% for the amounts in USD and 24% per annum for the amounts in Kenya Shillings as stipulated under clause 4.17 of the lease from the date of default until payment in full.
d) Costs.
12. The contract breached is the Lease Agreement dated 10th January, 2019.
13. The particulars of breach expressly pleaded by the Plaintiff include:
a) Despite the clear payment obligations imposed on the 1st Defendant during the term of the lease, the 1st Defendant unequivocally failed to remit the rent & AC amortization charges, service charge, promotion fund, the outgoings and utilities including electricity bills as and when they fell due and continues to be in such default;
b) Despite numerous reminders vide letters dated 4th November, 2019, 26th February, 2020 and 1st April, 2020, the 1st Defendant failed, declined, refused and/or ignored to execute and forward to the Plaintiff the Maintenance contracts in place with various suppliers in respect of the Plaintiff’s chattels including the maintenance contract with Ultra Equipment Limited;
c) Despite demand, the 1st Defendant failed to carry out regular and routine repair and/or maintenance works in regard to the Plaintiff's chattels;
d) Despite the 1st Defendant failing to pay the rent or any other sum due under the Lease within seven (7) days of the due date, the Defendants have jointly and severally failed, ignored and/or neglected to pay the interests which continue to accrue.
14. The 3rd, 4th, and 5th Defendants entered an appearance and filed a Statement of Defence.
15. They admitted that the 1st Defendant entered into the lease with the Plaintiff on 10th January, 2019. They also explicitly admitted joining the lease as guarantors.
16. Their main lines of defence were threefold:
(i) First, they averred that the suit against them was immature and incompetent as they were merely guarantors to the 1st Defendant.
(ii) Second, they pleaded that the 1st Defendant was unable to fulfil its obligations due to an Act of God and force majeure, specifically the advent of the COVID-19 pandemic and subsequent government directives that forced the closure of gymnasiums.
(iii) Third, they alleged that partial payments amounting to USD 428,712.55 and Kshs. 16,172,291.20 were made to the Plaintiff, alongside Kshs. 17,872,126.52 paid to the Plaintiff's agents, which ought to have been credited to the 1st Defendant's account.
17. The trial of this matter took a distinct trajectory. The 3rd, 4th and 5th Defendants' advocates on record applied to cease acting. The Court allowed this application on 5th May, 2025. It thereafter directed that the 3rd, 4th and 5th Defendants be served with a hearing notice by substituted service using an International Courier service.
18. When the matter came up for hearing, the Defendants failed to attend.
19. Despite having filed a joint Statement of Defence and a Witness Statement by one Schalk James Burger Hugo, the 3rd, 4th, and 5th Defendants did not call any witnesses to testify. They did not participate in the trial.
20. The Plaintiff's case proceeded undefended. The Plaintiff called its sole witness, Mr. Alex Trachtenberg (PW-1).
Issues for Determination
21. Upon analysing the pleadings, the uncontroverted evidence on record, and the written submissions by the Plaintiff’s Counsel, the Court frames the following three (3) main issues for determination:
a) What is the evidential effect of the 3rd, 4th, and 5th Defendants' failure to attend trial and tender evidence in support of their Statement of Defence?
b) Whether the Plaintiff is entitled to enforce the Guarantees against the 3rd, 4th, and 5th Defendants under the Lease Agreement dated 10th January 2019.
c) What are the appropriate reliefs to grant?
Analysis
22. The Court notes that though a defence was filed the Defendants did not participate in the actual trial.
a) What is the evidential effect of the 3rd, 4th, and 5th Defendants' failure to attend trial and tender evidence in support of their Statement of Defence?
23. The 3rd, 4th, and 5th Defendants filed a Statement of Defence and a bundle of documents. They also filed a witness statement. However, they abandoned the trial.
24. It is trite law that pleadings do not constitute evidence. A party who pleads a fact must prove it.
25. By failing to attend Court and call a witness to adopt their statement and produce their documents, the Defendants' bundle of documents remained merely marked for identification.
26. The Court is guided by the binding decision of the Court of Appeal in Kenneth Nyaga Mwige v Austin Kiguta & 2 others [2015] KECA 334 (KLR). It was authoritatively held that the mere marking of a document for identification does not dispense with its formal proof. A document marked for identification only becomes part of the evidential record when formally produced as an exhibit by a witness.
27. The High Court in Mukaba Investments Limited v Quadco Two Hundred & Forty-Four Limited [2024] KEHC 15486 (KLR) affirmed this principle. It ruled that a Court cannot interrogate the contents of a bundle of documents if they do not form part of the evidence. Consequently, the Defendants' unproduced documents carry zero evidential weight.
28. Regarding the unproven Statement of Defence, this Court finds refuge in the persuasive holding of Trust Bank Limited V Paramount Universal Bank Limited & 2 Others [2009] KEHC 4030 (KLR). The Court held that where a party fails to call evidence in support of its case, that party's pleadings remain mere statements of fact. In doing so, the party fails to substantiate its pleadings.
29. Similarly, in Motex Knitwear Limited V Gopitex Knitwear Mills Limited [2009] KEHC 4017 (KLR), the Court observed that the failure to adduce any evidence means that the evidence tendered by the Plaintiff stands uncontroverted and unchallenged.
30. The result is fatal to the defence. The averments concerning force majeure (COVID-19) and uncredited payments remain mere unproven allegations. The balance of probabilities tilts entirely in favour of the Plaintiff whose evidence stands unchallenged.
b) Whether the Plaintiff is entitled to enforce the Guarantees against the 3rd, 4th, and 5th Defendants under the Lease Agreement dated 10th January 2019.
31. The Court now turns to the core of this suit; the enforcement of the guarantees against the 3rd, 4th, and 5th Defendants.
32. Clause 7.1 of the Lease Agreement dated 10th January, 2019 is clear and unambiguous. It states that the Guarantors will pay the rents and make good to the Landlord on demand against all losses, damages, costs, and expenses arising as a result of such non-payment, non-performance, or non-observance.
33. A guarantee is an accessory contract where the surety undertakes to ensure the principal performs their obligations.
34. The 3rd, 4th, and 5th Defendants pleaded that the suit against them was immature. This argument is legally flawed.
35. The Court of Appeal in Kenindia Assurance Company Limited v First National Finance Bank Limited [2008] KECA 91 (KLR) was emphatic that a guarantor's obligation to pay is established upon default by the principal debtor and upon a demand of payment being made.
36. The High Court in Ebony Development Company Ltd V Standard Chartered Bank Ltd [2008] KEHC 1363 (KLR) further cemented this, stating that a guarantor becomes liable upon default by the principal debtor. That it is not the guarantor's role to see that the borrower complies, but rather to pay the guaranteed sum on demand.
37. The evidence before the Court confirms that the Plaintiff served final demand notices upon the Guarantors, including the demand letter dated 30th October, 2020.
38. Since interlocutory judgment was already entered against the 1st Defendant (the principal debtor) on 18th January 2023, the liability is crystallized. The 3rd, 4th, and 5th Defendants are therefore jointly and severally liable to the Plaintiff for the outstanding debt.
c) What are the appropriate reliefs to grant?
39. The Plaintiff has specifically pleaded and proved its claim for special damages.
40. Through PW-1, the Plaintiff established that upon the 1st Defendant vacating the premises, the outstanding rent and AC Amortization charges, service charge, promotion fund, and electricity bills amounted to USD 776,381.10 and Kshs. 25,033,021.95.
41. The Defendants failed to adduce any evidence to rebut these figures.
42. The Plaintiff also seeks contractual interest at the rate of LIBOR plus 8% for the USD amounts and 24% per annum for the Kenya Shillings amounts, as stipulated under Clause 4.17 of the Lease. Parties are bound by the four corners of their commercial agreements. The Court cannot rewrite a contract where the interest rates were expressly agreed upon. It has not been pleaded that the interest rates are illegal, excessive, oppressive, predatory or unconscionable. The Court of Appeal decision in National Bank of Kenya Ltd v Pipeplastic Samkolit (K) Ltd & another [2001] KECA 362 (KLR) has pronounced itself on this.
43. The Plaintiff has discharged its burden of proof on a balance of probabilities. The Defendants' failure to participate in the trial renders their defence unsubstantiated.
44. As to costs, the same lie at the discretion of this Court and ordinarily follow the event. The same are awarded to the successful Plaintiff.
Determination
45. The Court proceeds to enter Judgment for the Plaintiff against the Defendants, jointly and severally, as follows:
a) A Declaration is HEREBY issued that the 1st Defendant breached the Lease Agreement dated 10th January, 2019 entered into between the parties.
b) Special Damages are HEREBY awarded to the Plaintiff in the sums of USD 776,381.10 and Kshs. 25,033,021.95.
c) Interest is HEREBY awarded on the said sums at the rate of LIBOR plus 8% for the USD amount, and 24% per annum for the Kenya Shillings amount, calculated from the date of default until payment in full.
d) The Costs of this suit are HEREBY awarded to the Plaintiff.
46. It is so ordered.
DATED, SIGNED AND DELIVERED AT MILIMANI THIS 15TH DAY OF SEPTEMBER, 2026
NJOROGE BENJAMIN K.
JUDGE
In the presence of:
Mr William Ochieng for the Plaintiff.
N/A for the 1st and 2nd Defendants.
N/A for the 3rd, 4th and 5th Defendants.
Mr. John Paul - Court Assistant.