Emerg Investment Limited v Skyline Sacco Limited (Environment and Land Case E048 of 2024) [2025] KEELC 5192 (KLR)
The bottom line
#What this practically means
#Executive summary
#Key legal issues
#Whether the fixed-term lease of 63 months was terminable by two months' notice under Section 57(4) of the Land Act
No. The lease was a fixed-term lease, not a periodic tenancy; the notice of termination was of no consequence and the Defendant could not validly terminate mid-term.
The court held that a dispute under a duly executed contract must be resolved on the express terms of the contract. The lease was for a fixed term of 63 months and contained no early termination clause. Section 57(4) of the Land Act permits termination by notice only for periodic tenancies. The Defendant's reliance on that provision was therefore misplaced.
Whether the doctrine of frustration excused the Defendant's termination on grounds of financial hardship arising from the COVID period
No. The lease was entered into on 30th May 2022, two years after COVID subsided; frustration was not established.
The court applied the test in Five Forty Aviation v Erwan Lanoe that frustration requires performance to become impossible or radically different without default of either party. Mere increased onerousness does not suffice. Since the pandemic predated the lease, it could not have affected the substratum of the agreement.
Whether the termination notice amounted to breach of the lease
Yes. Having no right to terminate before expiry, the notice constituted breach entitling the Plaintiff to damages.
Following Ramji Meghji Gudka v Kisii University, termination of a fixed-term lease is not forbidden but constitutes a breach for which the party at fault must pay damages. The court accordingly found the notice of 20th February 2024 to be a breach of contract.
What damages were payable for the breach
Rent for 10 months (March to December 2024) at Kshs. 430,000 per month, less the deposit held of Kshs. 1,496,400/=, totalling Kshs. 2,803,600/=.
Applying the mitigation principle and restitution in integrum, the court declined to award rent for the entire remaining lease term, holding it would be unfair and unjustly enriching since the Defendant vacated in April 2024 after giving notice. A reasonable award of 10 months' rent, less the deposit, was deemed fair and adequate compensation.
Legal principles established
#- A court cannot rewrite a contract between parties; parties are bound by its terms unless coercion, fraud or undue influence are pleaded and proved.
- Section 57(4) of the Land Act on termination by notice applies only to periodic tenancies, not to fixed-term leases.
- Mere financial hardship or increased onerousness of a contract does not give rise to frustration.
- Early termination of a fixed-term lease does not exclude termination but renders it a breach for which damages are payable.
Court orders
#- 1.Judgment entered for the Plaintiff against the Defendant in the sum of Kshs. 2,803,600/= being damages for breach of the lease (rent for 10 months at Kshs. 430,000 per month from 1st March 2024 to 31st December 2024, less deposit held of Kshs. 1,496,400/=).
- 2.The Defendant's counterclaim for refund of the security deposit is dismissed with costs.
- 3.The Plaintiff awarded costs of the suit and interest on the judgment sum.
- Jurisdiction invoked
- Original civil jurisdiction of the Environment and Land Court over a lease dispute concerning land parcel Nakuru Municipality Block 9/34 (Vickers House)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Emerg Investment Limited v Skyline Sacco Limited (Environment and Land Case E048 of 2024) [2025] KEELC 5192 (KLR)", Case Analysis (2025). not stated in the judgment as provided. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2025/5192/eng@2025-07-10
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.