Affiliated Business Contractors Limited v Seyani Brothers & Company (K) Limited
The bottom line
#Kenya's Court of Appeal confirmed that contractors can be paid interim certificates without practical completion, and employers must challenge certificates promptly or lose the chance.
What this practically means
#Executive summary
#Questions the Court framed
#The issues the Court set itself to decide, in its own words.
- 1.Whether interim certificate no. 13 was properly raised as held by the trial court, absent a certificate of practical completion
- 2.Whether the learned judge erred in finding interim certificate no. 2 was not properly issued but deeming it valid if not re-evaluated within fourteen days
- 3.Whether the appellant's counterclaim was properly dismissed
- 4.Whether the trial court issued extraneous orders not captured in the pleadings
Key legal issues
#Whether interim certificate no. 13 was properly issued without a certificate of practical completion
It was properly issued; clause 34.4 requires a certificate of practical completion only where the certificate value is below the contractual minimum, which was not the case here.
Clause 34.4 speaks to when a certificate of practical completion is prepared, but only where the value is less than the minimum amount of a payment certificate stated in the appendix. Clause 41.0 likewise does not require practical completion before an interim certificate. The Architect issued the certificate under clause 34.3 after the Quantity Surveyor's valuation, and the appellant's consultants could have noted defects but did not.
Whether the trial judge erred in deeming interim certificate no. 2 valid if not re-evaluated within fourteen days
No error; the judge exercised her discretion judiciously, allowing the appellant to challenge the certificate per clause 34.8 within a limited period, which the appellant failed to use.
The trial court's order was inspired by clause 34.8 permitting correction or reduction of previously issued certificates. The buck stopped with the appellant and its consultants; the appellant never explained why re-evaluation within 14 days was difficult or inadequate. Having had the opportunity to comply and failed, the appellant could not complain that the certificate was converted into a final one.
Whether the counterclaim was properly dismissed
Yes; clause 43.1 required an Architect's written certificate that the works ought reasonably to have been completed, which was never adduced, and the sums claimed were mere conjecture.
Clause 43.1 conditions liquidated damages on the Architect certifying in writing that the works ought reasonably to have been completed. No such certificate, nor evidence of termination under clause 38, was placed before the trial court. The claimed figures, including loan interest, lacked empirical demonstration of how they were computed, so the grounds were bare.
Whether the trial court issued extraneous orders not pleaded
No; the judgment determined issues arising from the pleadings and the contract, and the orders were appropriate.
The dispute was founded on a contract with guidelines on preparation and verification of interim certificates. The contract was the basis of both claim and counterclaim determined by the judge. The omnibus prayer covered any relief, and the appellant itself had requested re-evaluation and final accounts, compelling the orders made.
Legal principles established
#- A certificate of practical completion is not a prerequisite to the issuance of an interim payment certificate under this form of construction contract.
- An interim certificate issued by the Architect on work inspected by the Quantity Surveyor is conclusive proof that the works were properly executed, absent contrary notation by the consultants.
- A first appellate court reconsideres and evaluates the evidence and draws its own conclusions, while making due allowance for not having seen or heard the witnesses.
- A court will not rewrite the contract between the parties.
Court orders
#- 1.Appeal dismissed
- 2.Costs of the appeal awarded to the respondent
The bench
#One judgment of the whole court — no separate or dissenting opinions.
- On appeal from
- High Court of Kenya at Nairobi
- HCCC No. 178 of 2013
- Jurisdiction invoked
- First appellate jurisdiction over the High Court (appeal as of right on facts and law)
Relief refused
#Setting aside the judgment of 15th August 2017
Appeal lacked merit; trial court findings on the certificates and counterclaim were sound
Allowance of the appellant's counterclaim
No Architect's certificate under clause 43.1 and no empirical evidence supporting the sums claimed
Costs
Appeal dismissed with costs to the respondent.
Quotable passages
#Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.
We thus find that the appellant misinterpreted the provision since a certificate of practical completion is not a pre-requisite to the issuance of an interim payment certificate.
In other words, the said certificate was conclusive proof that the works were properly executed.
Looking at clause 43.1 above, the appellant did not adduce a certificate by the Architect confirming that in his opinion, the works were not completed within the timelines set out in the construction agreement.
The upshot of our above analysis is that the present appeal lacks merit. It is hereby dismissed with costs to the respondent.
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Affiliated Business Contractors Limited v Seyani Brothers & Company (K) Limited", Case Analysis (2024). Civil Appeal 228 of 2019. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2024/1903/eng@2024-10-11
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.