Adsite Limited v Sports Kenya

2. The Plainti averred that vide a lease agreement dated December 2, 2016, it leased three billboard/ advertising locations from the Defendant within Nyayo stadium on LR No No 209/6347 for a renewable term of 5 years at an annual rent of ksh 1, 050,000/= with an increment of 5 % every 2 years. 3. It further contended that the Defendant has refused and or declined to perform its obligations thereof including giving the Plainti possession of the billboard locations and access to erect advertising structures thereon. 4. The Plainti averred that it learnt that the Defendant has allocated the same billboard locations to its competitor causing the Plainti to suer loss and to be deprived of income as each of the billboard structures cost ksh 10 million to fabricate and they would have generated an income of ksh 1.5 million in advertisement every month. 5. The Defendant failed to enter appearance and or participate in the suit despite being served. 6. On April 27, 2021, the matter proceeded for formal proof. PW1, Samir Ramesh Shah, the Plainti’s Chief Executive Ocer testied. His witness statement dated December 2, 2018 was adopted as part of his evidence. The Plainti’s bundle of documents dated December 2, 2018 were also produced as exhibits in this case. He stated that the Plainti does outdoor advertising. He produced a letter dated June 6, 2016 addressed by the Plainti to the Defendant seeking a lease of three billboard locations within Nyayo stadium. He also produced a letter dated June 30, 2016 which is a response from the Defendant conrming that the Plainti’s request for three billboard locations had been approved. 7. He told the court that they drew a lease which was signed by both parties in respect of three billboard locations on LR 209/6347 situated at Nyayo stadium. It was his testimony that after executing the lease, the Defendant failed to grant the Plainti access to the suit property and no explanation was given. He produced photographs showing the Defendant installed its own billboards. He further stated that the Plainti lost about ksh 4.8 million per month as well as business infrastructure of their billboards. 8. The Plainti led written submissions dated July 26, 2022.They raised the following issues for determination:a) Whether the Plainti and the Defendant have a binding enforceable contract, and if so, whether the Defendant breached the terms of the agreement. b) Whether the Defendant should be ordered to perform its contractual obligations. c) Whether the Plainti is entitled to damages as a result of the breach. 9. It was submitted that the Plainti has established that the lease between it and the Defendant was binding and enforceable since it meets the basic elements of a contract which are oer, acceptance, consideration, and the intention to create legal obligations. It relied on the cases of Omar Gorhan v Municipal Council of Malindi (Council Government of Kilifi) v Overlook Management Kenya Ltd [2020] eKLR,William Muthee Muthami v Bank Of Baroda (2014 eKLR and the case of Caleb Onyango Adongo v Bernard Ouma Ogur [2020] eKLR. 10. The Plainti also submitted that from the written correspondences between the parties herein, the letter dated June 30, 2016 amounted to an oer to the Plainti herein. It was further submitted that according to clause 13 of the lease agreement, the parties agreed that the Plainti would be allowed possession of the premises upon "delivery of a duly executed lease and upon compliance with the requirements herein..." .It was further submitted that the Plainti was also required to pay annual rent https://new.kenyalaw.org/akn/ke/judgment/keelc/2023/18470/eng@2023-03-16 2

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of Kshs 1,050,000/= thus the promise of possession of the suit premises in exchange for annual rent amounts to consideration, which became available after the contract was signed. 11. The Plainti relied on the case of William Muthee Muthami v Bank Of Baroda [2014] eKLR to submit that the contract was not repudiated because there is no proof of noncompliance or nonperformance on the part of the Plainti but the Defendant without due regard and lawful justication breached the lease agreement. 12. The Plainti also relied on the case of Kenya Power & Lighting Company Limited v Nathan Karanja Gachoka and Others [2016] eKLR, and Gichinga Kibutha v Caroline Nduku (2018) eKLR, to submit that it has proved its case despite the defendant’s failure to le a defence. 13. Relying on the case of Amina Abdul Kadir Hawa v Rabinder Nath Anand & Another [2021] eKLR, Ole Meikoki v Ole Sirere [1981] KLR 593 and Consolata Anyango Ouma v South Nyanza Sugar Co Ltd [2015] eKLR , the Plainti submitted that it is entitled to specic performance orders as damages alone may not be a sucient remedy. 14. It also submitted that once it made a disbursement of Kshs 100,000/- in accordance with the Defendant's instructions which payment was intended to reimburse the legal fees incurred by the rm of Ms Arusei and Company Advocates in drawing the lease agreement it begun the process of fabricating the three billboards with the purpose of mounting them following the execution of the contract. It added that it spent Kshs 30,000,000/- on the fabrication of the billboards, not considering labour and material expenditures and expected to make around Kshs 1,500,000/=in advertising revenue each month. 15. It was also submitted that the Plainti applied for development permission and licenses to erect billboards in accordance with the provisions of Physical Planning Act Cap 286 Laws of Kenya. 16. I have considered the pleadings and the evidence on record. I have also considered the written submissions led by the Plainti and the authorities cited. The issues for determination are:(i) Is the Plainti entitled to the prayers in the plaint? (ii) Who should bear costs of this suit? 17. From the evidence presented, the Plainti applied for advertising space within Nyayo National stadium premises vide its letter dated June 6, 2016. That application was considered by the Defendant who approved it vide its letter dated June 30, 2016.The Defendant also informed the Plainti that its appointed Advocates Arusei & Co Advocates would prepare the lease between the parties. 18. There is on record a lease dated December 2, 2016 between the Plainti and the Defendant drawn by M/S Arusei and Company Advocates and executed by the parties herein. Vide the lease, the Defendant granted the Plainti three advertising slots on LR No 209/6347 Lusaka Road Roundabout for a period of three (3) years commencing on December 1, 2016. 19. There is in evidence a cheque of kshs 100, 000/= paid to M/S Arusei & company Advocates by the Plainti. The Plainti averred that the said money was legal fees paid to said Advocates for drawing the lease herein. 20. I note that at clause 13 of the lease agreement dated 2nd December 2016, possession of the suit premises would be given to the plainti upon compliance of the terms of the said lease. Clause 7 of the lease provided that rent payable would be ksh 1, 050,000/= per annum for the rst one year of the term. There is no evidence that the said consideration was paid. https://new.kenyalaw.org/akn/ke/judgment/keelc/2023/18470/eng@2023-03-16 3

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21. In Reliable Electrical Engineers Ltd v Mantrac Kenya Limited (2006) eKLR, the court stated; “Specic performance like any other equitable remedy is discretionary and the Court will only grant it on well settled principles. The Jurisdiction of specic performance is based on the existence of a valid enforceable contract. It will not be ordered if the contract suers from some defect, such as failure to comply with the formal requirements or mistake or illegality, which makes the contract invalid or enforceable. Even when a contract is valid and enforceable, specic performance will however not be ordered where there is an adequate alternative remedy. In this respect damages are considered to be an adequate alternative remedy where the claimant can readily get the equivalent of what he contracted for from another source. Even when damages an adequate remedy specic performance may still be refused on the ground of undue inuence or where it will cause severe hardship to the defendant.” 22. Further, in Gurder Singh Birdi & Narinder Singh Ghatora as Trustees of Ramgharia Institute of Mombasa v Abubakar Madhbuti [1997] eKLR the court held; “When the Appellants came to Court seeking the relief of specic performance of the agreement, they had not performed their one essential part of the agreement. Namely; payment of the balance of the purchase price of the suit property. Indeed, right up to the conclusion of the proceedings in the superior court, they had not done so. In those circumstances, no court of equity properly directing its mind to the same would have considered it just and equitable of grant the equitable relief of specic performance of the agreement with a view to doing more perfect and complete justice”. 23. The contract herein suers for want of consideration. Therefore, an order of specic performance is not available to the Plainti who is in breach for failing to pay the rent due. 24. In conclusion, I nd that the Plainti has failed also to prove its case as against the Defendant. Whoever asserts must prove. 25. I nd that the Plainti has failed to prove that it complied with all its obligations in the said contract and that the Defendant is in breach. Section 107 of the Evidence Act has not been satised. 26. The upshot of the matter is that the Plainti has failed to prove its case as against the defendant on a balance of probabilities. I hereby dismiss the suit with no orders as to costs. DATED, SIGNED AND DELIVERED VIRTUARLLY AT KAJIADO THIS DAY 16TH OF MARCH 2023. ………………………. L. KOMINGOI JUDGE In the presence of:Mr. Wachira for the Plainti No appearance for the Defendant Mutisya- Court Assistant https://new.kenyalaw.org/akn/ke/judgment/keelc/2023/18470/eng@2023-03-16 4

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