Andrew Nyoro Njenga t/a Diani Beach Hotel v Cosmosair PLC
The bottom line
#Kenya's High Court awarded a Diani Beach hotel £23,500 for lost revenue after a tour operator breached their accommodation contract, but rejected speculative claims.
What this practically means
#Executive summary
#Key legal issues
#Which party breached the hotel accommodation agreement
The defendant tour operator was in breach by withholding payments, failing to send rooming lists and failing to release unsold accommodation
The court found the plaintiff's letter of 16th September 1992 was primarily a demand letter, the eviction threat secondary and never executed. The defendant withheld payments, sent no rooming list and made no surrender as required, leaving the plaintiff bound to reserve accommodation. Payment was made only after summary judgment.
Recoverability and quantum of loss of revenue
Loss of revenue for 47 days at £12.50 per person per day for 40 people, totalling £23,500, was sustainable as directly connected with the breach
The court likened loss of revenue to loss of future earnings in personal injury claims, computed from past figures but falling under general damages. The claim was not remote, being directly connected with the breach, and the plaintiff could not mitigate without risking breach of the contract itself.
Whether the preferred-allocation nature of the contract defeated the claim
It did not; the defendant never communicated a release or surrender of unsold rooms, so the plaintiff remained bound to reserve the accommodation
The defence argued a preferred allocation contract imposes no obligation to fill the allocation and allows release of unsold rooms. The court held that absent any communication or surrender from the defendant, the plaintiff could not let the rooms to third parties and the question of a guaranteed contract did not arise.
Interest on the award
Interest at 14% per annum from the date of filing the suit, not commercial rates
The plaintiff produced Exhibit 2 but failed to establish that its business ran on an overdraft or loan subject to the interest charged. The court distinguished the position in the Sandev case where evidence showed a bank charging 17%, and fixed 14% as reasonable, accruing from filing since the money would have been received under the contract.
Legal principles established
#- Damages for breach of contract are those arising naturally from the breach or within the contemplation of both parties at the time of contracting (Hadley v Baxendale)
- Loss of revenue flowing directly from breach of an allocation contract is not remote and is recoverable as general damages
Court orders
#- 1.Judgment for the plaintiff in the sum of £23,500 or its equivalent in Kenya shillings as at the time of settling the decree
- 2.Costs of the suit to the plaintiff
- 3.Interest at 14% per annum on the award from the date of filing the suit
- Jurisdiction invoked
- Original civil jurisdiction of the High Court over the claim for loss of revenue following summary judgment under Order 35 of the Civil Procedure Rules
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Andrew Nyoro Njenga t/a Diani Beach Hotel v Cosmosair PLC", Case Analysis (1995). . Source:
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.