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ELCPartially AllowedE019 of 2022· [2025] KEELC 7921 (KLR)

Arfa Arfa Limited & another v Casamia Investments Limited & 2 others (Environment and Land Case E019 of 2022 & E078 of 2024 (Consolidated)) [2025] KEELC 7921 (KLR)

Environment and Land Court
14 November 2025
4,731 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~19 min to read original · ~4 min brief

The bottom line

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A Kenyan court ruled Covid-19 did not excuse a tenant's unpaid rent, ordering the tenant to pay arrears after its lease frustration claim failed.

What this practically means

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Executive summary

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Arfa Arfa Limited leased the 1st, 3rd and 4th floors of 20th Century Plaza from Casamia Investments Limited under a lease dated 6th March 2012, expiring 31st October 2023, paying KShs.9,200,000 as security deposit. Arfa sued in June 2020 seeking declarations that the lease was automatically terminated and discharged upon frustration by the Covid-19 pandemic and curfew directives, a new lease, and general damages. Casamia defended and counterclaimed, seeking forfeiture, eviction, restoration costs of KShs.15,898,960 and arrears of KShs.14,679,785.67 as at 31st May 2021 with contractual interest. A related suit by Casamia against Mohutniy Africa Limited, the subsequent occupier in arrears, was consolidated. The court dismissed Arfa's suit, holding that the doctrine of frustration had no application: the plaintiff was already in rent arrears when Covid-19 was declared, the lease contained no frustration clause, and, applying the Supreme Court's decision in Kwanza Estates, financial hardship from the pandemic does not automatically discharge rental obligations. The counterclaim was allowed only in part: Arfa was ordered to pay outstanding rent arrears, service charge and VAT as at 1st May 2020, to be set off against the KShs.9,200,000 deposit; the restoration costs claim failed as unpleaded. Casamia's plaint against Mohutniy was allowed as prayed, Mohutniy's admitted arrears being unrebutted. Costs of the suit and counterclaim went to Casamia.

Key legal issues

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01

Whether the Covid-19 pandemic frustrated the lease agreement

Holding

No. The plaintiff had rent outstanding before the pandemic, there was no frustration clause in the lease, and the court could not tell when the plaintiff resumed business or left the premises.

Reasoning

The court took judicial notice of the pandemic but found the plaintiff was already in arrears when the pandemic was declared. Following the Supreme Court's guidance in Kwanza Estates, frustration must be narrowly applied, discharges a contract entirely, and cannot rest on a party's own default. Most of the outstanding rent predated the pandemic and remained payable up to the February 2020 quarter.

p. 6
02

Whether restoration and repair costs of KShs.15,898,960 could be awarded on the counterclaim

Holding

No, because the claim was not specifically pleaded in the amended counterclaim.

Reasoning

The defendant sought restoration costs or an alternative payment in its counterclaim prayers, but the court found this head was not specifically pleaded. Unpleaded claims cannot be granted, so this head of the counterclaim failed even though the counterclaim otherwise succeeded.

p. 9
03

Whether the suit between Casamia and Mohutniy should be consolidated with the lead file

Holding

The plaint by Casamia against Mohutniy was allowed as prayed; Mohutniy's arrears were unexplained.

Reasoning

PW1 admitted Mohutniy was in rent arrears and had locked the premises without paying rent after taking over on 1st November 2022. The court found no correlation between the frustration issue in the lead file and Mohutniy's separate default, which was unrebutted since DW1 and DW2 were not cross-examined.

p. 9

Legal principles established

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  • The doctrine of frustration must be invoked cautiously and operates to discharge a contract entirely, not partially or temporarily; a party invoking it must prove the frustrating event occurred without their fault
  • Financial hardship caused by the Covid-19 pandemic does not automatically discharge a tenant's rental obligations
  • Where a party has pre-existing arrears before the alleged frustrating event, the contract is not frustrated

Court orders

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  1. 1.The plaint dated 8th June 2020 is dismissed
  2. 2.The 1st defendant in the counterclaim to pay all the outstanding rent arrears, service charge and VAT as at 1st May, 2020
  3. 3.Prayer (i) to be calculated against the deposit costs of KShs.9,200,000/-
  4. 4.Costs of the suit and of the counterclaim to Casamia
  5. 5.With regard to the plaint dated 27th February, 2024 between Casamia Investments Limited and Mohutniy Africa Limited, the same is hereby allowed as prayed
Jurisdiction invoked
Original civil jurisdiction over lease and contract disputes

Key timeline

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Practical implications

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Frequently asked questions

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Cite this brief

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Cite this brief

Caselaw, "Arfa Arfa Limited & another v Casamia Investments Limited & 2 others (Environment and Land Case E019 of 2022 & E078 of 2024 (Consolidated)) [2025] KEELC 7921 (KLR)", Case Analysis (2025). E019 of 2022. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2025/7921/eng@2025-11-14

Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.