Butali Sugar Mills Limited v Frodak Kenya Limited T/A Frodak Cleaning Services

3. The Plaintiff pleaded that the terms and conditions forming the contract agreement were solely designed by the Defendant and that as such, any construction thereof was to be construed contra proferentum. 4. The Plaintiff further pleaded that Clause 4 of the contract provided for the Terms and Conditions for the Labour Contract as follows: “ Payments to the Contractor shall be made subject to the agreement between the Contractor and the Company from time to time with respect to the nature of the work a). The Contractor shall be paid Ksh.55/- per staff for the services rendered. b). The Contractor shall be paid every month before 5th to cater for his casual and permanent workers.” 5. The Plaintiff pleaded that at all times material to the suit, it kept and observed its obligations under the above clause without any default and/or delay. 6. The Plaintiff further pleaded that Clause 5 of the contract agreement provided for Legal Requirements as follows: “ The Contractors shall be responsible for all legal requirements of the employees. The Contractor shall be responsible for all the statutory payment of the relevant Government authorities. These shall include payments for VAT, P.A.Y.E, H.H.I.F, N.S.S.F, Training levy and withholding tax and produce Certificates and receipts of payments. Withholding tax documentation will be vice versa.” 7. The Plaintiff stated that Clause 5, Schedule A of the contract agreement provided the Obligations to be fulfilled by the Contractor as follows: “ 1. Deduct and remit the actual NSSF deductions of the employees on his register to the government statutory body by the 15th of every month. A copy of the remittance list will be filed by Butali Sugar Mills-HRD. 2. Deduct and remit the actual NHIF deductions of the employees on his register to the government statutory body by the 9th of every month. A copy of the remittance list will be filed by the Contractor. 3. Should register with Occupational Health and Safety Officer (OSHO). 4. Make timely reports of all accidents with the District Labour Officer and Occupational Safety and Health Officer in case of any noticeable occupational disease. 5. Deduct and remit monthly PAYE to KRA, NSSF, NHIF will be done by the Contractor. 6. Submit monthly ETR receipt to Butali Sugar Mills Limited of onward payments to Contractor. 7. The client shall not during the subsistence of this contract, or one year of termination thereof; https://new.kenyalaw.org/akn/ke/judgment/kehc/2025/18897/eng@2025-11-20 2

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8. a) Knowingly offer employment in any capacity to any person who shall be or shall have been in the employment of the Company during the subsistence of this contract and who shall have worked on services to the client hereunder. b) Knowingly employ any form or Company promoted, managed or controlled by persons which offer similar services to be provided by the Company hereunder. 8. Compute monthly payroll. 9. Be in charge of all court cases concerning mill cane, winch and seed cane loaders. 10. Take full cover of insurance for the mill cane, winch and seed cane loaders.” The Plaintiff pleaded that clause 7 of the contract agreement was in respect of Provision of Staff and was as follows: “ a. The Contractor shall provide his own employees with identification cards and job cards, which shall be submitted to the Company when each employee enters the Company. b. The Contractor shall ensure all its employees are well disciplined and behaved while in the Company premises. c. The Contractor shall ensure that all its employees who are medically fit adults (over 18 years of age) to work in the factory. d. Any employee found to misbehave within the factory shall be removed by the Company Security Personnel. e. The Company reserves the right to reject any employee of the Contractor without assigning any reasons. f. The Contractor shall supply safety gears/uniforms to his employees. g. The Contractor shall supply pictures and photocopies of IDs for his employees to the Company. h. The Contractor shall ensure that all employees produce a certificate of good conduct. i. The Contractor will be held responsible for any theft of Company (Butali Sugar Mills Limited) property by the Contractors employees.” 9. The Plaintiffs position as pleaded in the plaint was that the Defendant abided by the obligation of the contract by making available for the Plaintiff’s labour needs several workers who were engaged as mill cane, winch and seed cane loaders at the Plaintiffs premises. The Plaintiff stated that workers were employees and agents of the Defendant for whose actions and conduct the Defendant was responsible. 10. The Plaintiff averred that between 2nd May, 2017 and 4th May, 2017, during the subsistence of the agreement, the Defendant’s employees at the Plaintiff’s establishment went on strike thereby paralyzing the operations of the Plaintiff for that period. https://new.kenyalaw.org/akn/ke/judgment/kehc/2025/18897/eng@2025-11-20 3

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11. The Plaintiff averred that the conduct of the Defendant’s employees and/or agents amounted to breach of the agreement, particularly Clause 7(b), which provided that the Defendant was required to provide labourers to support the operations of the Plaintiff and that the Defendant was responsible and had the obligation to ensure civil conduct of its said employees and/or agents so as to specifically obviate any disruption of the Plaintiff’s operations. 12. The Plaintiff pleaded the particulars of breach of contract as attributable to the Defendant as follows: “ i). Failure to reign in and stop disruptive conduct of its agents and employees resulting in paralyzing the Plaintiff’s operations between 2nd May, 2017 and 4th May, 2017.” 13. The Plaintiff stated that it operated a sugar manufacturing plant with a daily capacity of 2,500 tonnes, which operated on a 24-hour, 7-day week cycle, except the days under maintenance once a year. 14. The Plaintiff averred that during the period of the strike, the production of sugar at the Plaintiff’s mills was disrupted while the Defendant’s agents and/or employees prevented the Plaintiff’s carrier trucks and tractors from entering and/or leaving the Plaintiff’s factory. 15. The Plaintiff further pleaded that during the period of the disruption by the Defendant’s agents and/ or employees, it suffered significant financial losses amounting to Ksh.29,489,431/-, which the Plaintiff claims vide the instant suit, whose particulars the Plaintiff provided as follows: Particulars of Loss Kshs. Cost of Production on sugar per 50kg bags 3,470.00 (For the period leading up to the disruption – Month of April 2027) Gross contribution of sugar per 50kg bag Average net price during the disruption period 6,638.00 (Less) Average direct cost per 50kg bag as above. (3,470.00) 3,168.00 Average sugar bags before and after disruption Average sugar bags sold per day for two (2) weeks before and after disruption period (18th April to 1st May and 5th May to 15th May) 2,327.00 Gross Loss: Average gross income from a single bag of 50kg bag 3,168.00 Average bags sold on a daily basis for the period 2,237.00 Disruption period – days 4 Gross Loss 29,489,431.00 16. The Plaintiff pleaded that the Defendant refused and/or neglected to make good its claim despite demand and notice of intention to sue having been made, necessitating the present suit. https://new.kenyalaw.org/akn/ke/judgment/kehc/2025/18897/eng@2025-11-20 4

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17. The Defendant resisted the Plaintiff’s claim by filing a statement of defence dated 22nd September, 2022 in which it admitted entering into the agreement with the Plaintiff and further admitted the Plaintiff’s description in the plaint of the several clauses of the agreement, but denied the claim by the Plaintiff that terms and conditions forming the agreement were solely designed by the Defendant. 18. In its defence, while admitting that the Defendant’s employees went on a strike that the Defendant termed as illegal between 2nd May 2017 and 4th May, 2017, the Defendant generally denied the following, and put the Plaintiff to strict proof of its allegations: i. That the Plaintiff kept and observed its obligations under the above clauses without any default and/or delay. ii. That the Defendant made available workers who were employees and agents of the Defendant for whose actions and conduct the Defendant was responsible. iii. That the conduct of the Defendant’s employees and/or agents of striking amounted to breach of the agreement on the part of the Defendant. iv. That the Defendant’s agents and/or employees prevented the Plaintiff’s carrier trucks and tractors from entering and/or leaving the Plaintiff’s factory. v. That the production of sugar at the Plaintiff’s mills was disrupted during the period of the strike. vi. That the Plaintiff operated a sugar manufacturing plant with a daily capacity of 2,500 tonnes, which operated on a 24-hour, 7-day week cycle, except the days under maintenance once a year. vii. That the Plaintiff suffered significant financial losses amounting to Ksh.29,489,431/-, that is attributable to the Defendant and denied the particulars of loss as were set out by the Plaintiff in the plaint. viii. That demand and notice of intention to sue were made by the Plaintiff. 19. The Defendant pleaded in the alternative and without prejudice to the above denials that its employees planned and executed the strike without the Defendant’s notice and that the Defendant could therefore not foresee the damage caused by the strike. 20. The Defendant further pleaded in the alternative and without prejudice to the above denials that if the alleged strike occurred, it took measures to stop the disruptive conduct of its agents and employees by talking to them in order to resolve the issues and further held a meeting that was chaired by the Kakamega Labour County Officer which the representatives of the Plaintiff attended and that it ultimately resolved to terminate the employment contracts of the employees due to their uncouth behaviour and unwillingness to listen. 21. While admitting the jurisdiction of this court to determine the instant claim, the Defendant denied the Plaintiff’s averment that there is no other suit pending and that there have been no previous proceedings in any court between the Plaintiff and the Defendant over the same subject matter as instant. 22. The Defendant prayed that the Plaintiff’s suit be dismissed with costs. https://new.kenyalaw.org/akn/ke/judgment/kehc/2025/18897/eng@2025-11-20 5

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C. Third Party Proceedings. 23. 24. Vide various applications filed herein, the Defendant commenced third party proceedings against its erstwhile 123 employees who are alleged to have gone on strike during the period material to this suit. The applications were all allowed and the 123 joined as Third Parties. However, despite being served with the third-party notices to the satisfaction of the court, none of the 123 entered appearance. On 31st October, 2023, my sister Shariff J. rendered the following ruling: “ 1. This court has considered the affidavit of service filed herein on 17th September, 2023 by the Defendant and given that no appearance has been entered by the Third Parties, they are hereby deemed to have admitted the claim against them by the Defendant. 2. The Defendant is directed to serve the requisite request for judgement on that account. 3. This matter is certified ready for hearing. 4. Hearing is fixed for 26th March, 2023. The hearing shall be physical.” On 20th September, 2024, upon considering the request for judgement dated 6th November, 2023, filed by the Defendant, Shariff J. rendered herself as follows: “ I have considered the request for judgement dated 6th November, 2023 made against the 1st to 123rd Third Parties and I have also considered the affidavit of service of Judith Opiyo Orengo sworn on 15th September, 2023 and the copy of advertisement made through the Standard Newspaper on 21st day of July, 2023 annexed as Plaintiff’s (sic) annexture JAO-1 and I am satisfied that the 1st to 123rd Interested Parties (sic) were duly served with summons to enter appearance (sic) by way of the aforesaid substituted service and have notwithstanding that failed to enter appearance within the requisite time frame or at all where I do hereby enter judgement against them for a liquidated sum of Ksh.29,489,431/-.” 25. The judgment of Shariff J. as against the 123 Third Parties as determined above, remains undisturbed. D. The Plaintiff ’s Case. 26. The Plaintiff called Daniel Kiyondi Nyarunda, who described himself as the Plaintiff’s Financial Manager, as its witness. The witness testified and adopted the contents of his statement dated 16th July, 2021. 27. In his statement, the Plaintiff’s witness stated that the Plaintiff and the Defendant entered into the agreement dated 4th July, 2016 whereby the Plaintiff engaged the Defendant to provide contracted labour at the Plaintiff’s establishment – a sugar production factory, on the refined terms as contained in the agreement. 28. The Plaintiff’s witness stated that the Defendant, in line with the terms of the agreement, provided personnel designated as mill cane, winch and seed cane loaders to work at the Plaintiff’s factory. 29. The witness stated in his statement that the workers that the Defendant provided under the contract went on strike on 2nd May, 2017, citing poor working conditions, lack of protective gear and nonpayment of salaries, which strike lasted until 4th May, 2017. The witness stated that the strike was occasioned by the Defendant’s breach of the agreement between the parties by failing to reign in and https://new.kenyalaw.org/akn/ke/judgment/kehc/2025/18897/eng@2025-11-20 6

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stop disruptive conduct of the Defendant’s employees, who prevented the Plaintiff’s carrier trucks and tractors from entering the Plaintiff’s premises. 30. The witness further stated that as a result of the strike, the Plaintiff’s operations were paralyzed resulting in losses quantified in an auditor’s report at Ksh.29,489,431/-. He stated that the Defendant was vicariously liable for the losses that the Plaintiff incurred as a result of the acts of the Defendant’s employees, adding that the primary relationship that the Plaintiff had was with the Defendant and not the Defendant’s employees. The witness stated that under the agreement, the Defendant was under a contractual obligation to provide the Plaintiff with disciplined employees and to maintain the discipline of those employees. 31. The Plaintiff’s witness stated that demand and notice of intention to sue that were issued to the Defendant did not elicit any response, which then necessitated this suit. 32. The Plaintiff’s witness produced the following documents in support of the Plaintiff’s case:Agreement dated 4th July, 2016.Memo from the Defendant to all its staff dated 3rd May, 2017 terminating all the Defendant’s staff following their involvement in the strike.Letter from the Defendant dated 8th May, 2017 to the Plaintiff informing the latter of the actions taken by the former following the strike and stating that the Defendant was not responsible for the strike.Audit Report on the computation of losses resulting from the strike prepared by RSM (Eastern Africa) Consulting Limited.Inventory of sample daily sales from 15th April, 2017 to 13th May, 2017.Average sales price for the period of 29th April, 2017 to 9th May, 2017.Sample invoices for the period 29th April, 2017 to 9th May, 2017. 33. Upon being cross examined by learned Counsel for the Defendant, the Plaintiffs witness told the court that under the agreement, the Defendant provided loaders and cleaners to work at the Plaintiff’s sugar factory. He stated that during the period of the strike, the Defendant’s employees gained ingress into the Plaintiff’s premises and barricaded the entrance. The witness told the court that no prior notice of the strike was served upon the Plaintiff by the Defendant or its employees. 34. The Plaintiff’s witness further told the court that the Defendant took measures in an attempt to quell the strike by engaging the workers and that he attended the mediation talks and learnt that among the issues the Defendant’s employees complained of were that their statutory deductions were not being remitted after collection. 35. In his further evidence upon cross examination, the Plaintiff’s witness stated that the Defendant’s employees walked out of the mediation talks and the District Labour Officer declared the strike as being illegal. 36. The Plaintiff closed its case at that stage. E. The Defence Case. 37. The Defendant called George Onyango, its Administrative Manager as a witness. The witness adopted the contents of his statement recorded on 23rd September, 2022. 38. In his statement, the Defendant’s witness admitted that the parties herein entered into the agreement dated 4th July, 2016 whose term was to commence on 1st July, 2016 and was to expire on 30th June, 2017 vide which the Defendant was to provide the Plaintiff with mill cane loaders, winch loaders, seed cane loaders, cleaners and off loaders and which the Defendant did. 39. The witness stated and admitted that its workers went on strike and became rowdy between 2nd May, 2017 and 4th May, 2017 but added that the same was without any notice to the Defendant. That following the strike, the Defendant called in the police and engaged the Kakamega County Labour https://new.kenyalaw.org/akn/ke/judgment/kehc/2025/18897/eng@2025-11-20 7

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Officer, who was unable to meaningfully engage the striking workers as they were rowdy. The matters raised by the employees were later resolved save for their demand that they be directly employed by the Plaintiff, which issue was beyond the Defendant’s reach. As a result, a return-to-work formula was not reached. 40. The witness stated that following the steps taken by the Defendant, the Kakamega County Labour Officer prepared a report on the meeting that was held on 2nd May, 2017 declaring the strike as illegal. On that basis, the Defendant proceeded to terminate the employment contracts of all its employees who were working at the Plaintiff’s factory under the agreement. Resultantly, the agreement was terminated. 41. The Defendant’s witness produced the following documents in support of the Defendant’s case:Report of the Kakamega County Labour Officer.Internal memo issued by the Defendant terminating its employees’ contracts following the strike.Payroll.Sample of the Defendant’s employees’ employment contract. 42. The Defendant blamed its erstwhile employees (the Third Parties) for the losses that the Plaintiff suffered and stated that they should be held liable for the same. 43. The Defendant closed its case. 44. The court directed that the parties file their respective submissions and the Plaintiff and the Defendant complied. 45. In its submissions, the Plaintiff stated that as the loss was occasioned by the Defendant’s employees who were acting within the contract and in respect of whom the Plaintiff had no control, the Defendant was vicariously liable for its employees’ actions. 46. The Defendant on the other hand opined that as its employees went on strike without notice, which violated Section 76 of the Labour Relations Act, Cap 233 Laws of Kenya, the Defendant cannot be held vicariously liable for their actions and that if anything, the Kakamega County Labour Officer declared the strike as illegal. F. Issues For Determination. 47. Having considered the pleadings, the evidence adduced, and submissions by both counsel, the following issues arise for determination: i. Whether the Defendant was in breach of the labour-supply agreement dated 4th July 2016. ii. Whether the Defendant is vicariously liable for the acts of its employees during the strike of 2nd May, 2017 to 4th May, 2017. iii. Whether the Plaintiff suffered loss and damage as a result of the alleged breach, and if so, whether such loss is recoverable from the Defendant. iv. What is the effect of the judgment entered against the 123 Third Parties? v. Whether the Plaintiff is entitled to the remedies sought in the plaint. vi. Who should bear the costs of the suit. G. Analysis And Findings. 48. The present claim is a civil dispute for breach of contract. The applicable standard is the civil standard of proof on a balance of probabilities. https://new.kenyalaw.org/akn/ke/judgment/kehc/2025/18897/eng@2025-11-20 8

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49. In William Kabogo Gitau v George Thuo & 2 Others [2010] eKLR, the court restated this standard, noting that proof in civil cases is satisfied where the party bearing the burden tilts the scale even slightly in its favour. 50. In that case, Kimaru J. (as he then was) stated as follows: “ In ordinary civil cases a case may be determined in favour of a party who persuades the court that the allegations he has pleaded in his case are more likely than not to be what took place. In percentage terms, a party who is able to establish his case to a percentage of 51% as opposed to 49% of the opposing party is said to have established his case on a balance of probabilities. He has established that it is probable than not that the allegations that he made occurred.” 51. Thus, the Plaintiff must show that it is more probable than not that its version of events is true, in order to be successful. 52. I will proceed to address the issues seriatim. 53. The first issue for determination is whether the Defendant was in breach of the labour-supply agreement dated 4th July, 2016. It is common ground that the Plaintiff and the Defendant entered into an agreement dated 4th July, 2016 under which the Defendant undertook to supply labour, including mill cane loaders, winch loaders, seed cane loaders, cleaners and other personnel to support the Plaintiff’s sugar-processing operations. 54. The agreement imposed upon the Defendant several obligations, key among them the duty to provide disciplined employees, ensure their good conduct within the Plaintiff’s premises and maintain discipline so as to avoid disruption of the Plaintiff’s operations (Clauses 7(b) and 7(i)). These clauses clearly placed responsibility for the behaviour of the Defendant’s employees on the Defendant. 55. Although the Defendant sought to rely on the fact that the disruptive conduct occurred immediately outside the Plaintiff’s main gate, such a narrow and literal interpretation of the phrase “within the premises” cannot be sustained. The Defendant’s employees were deployed for the sole purpose of facilitating ingress and egress of cane and other materials necessary for the continuous running of the factory. The area immediately outside the gate was directly connected to, and integral for, the performance of their assigned duties. 56. I take the view that contractual terms in a commercial agreement must be construed in a manner that gives effect to their commercial purpose. A construction that limits disciplinary responsibility strictly to conduct inside the four walls and/or within the precincts of the factory, while ignoring acts at the gate that completely paralyzed operations, would defeat the very purpose for which the labour-supply contract was entered. 57. Furthermore, the Defendant’s responsibility for the discipline and conduct of its employees did not depend solely on their physical location at the material time but on the nature of their engagement and the connection between their conduct and the performance of the contract. Vicarious liability attaches where employees act in the course of their employment, even if the specific act occurs outside the employer’s premises. This principle was affirmed in Joseph Cosmas Khayigila v Gigi & Co Limited https://new.kenyalaw.org/akn/ke/judgment/kehc/2025/18897/eng@2025-11-20 9

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& Another [1995–1998] 2 EA 333, where the Court held that wrongful acts closely connected with assigned duties still attract employer liability. The court held as follows: “ An employer is liable for the negligence of his employee committed in the course of his employment, even where the employee acts contrary to his instructions, so long as he is doing what he was employed to do, although in a wrongful or unauthorized manner.” 58. Here, the strike, barricade and obstruction were directly linked to the very work for which the Defendant supplied the employees. Their decision to blockade the main gate did not remove their connection to their employment nor the Defendant’s contractual obligation to maintain discipline and ensure uninterrupted operations. The Defendant therefore remains liable notwithstanding the precise physical location of the disruption. 59. The evidence on record shows, and the Defendant admitted, that its employees went on a strike from 2nd May to 4th May, 2017. During this period, the Defendant’s employees who were working at the Plaintiff’s sugar factory acted in a manner that obstructed the Plaintiff’s operations and barricaded the factory entrance. 60. The Defendant argues that the strike was illegal under Section 76 of the Labour Relations Act and that it had no notice of the workers’ intentions. Nonetheless, the legality of the strike under statute does not, of itself, absolve the Defendant from contractual obligations voluntarily undertaken. 61. However courts have held that parties are bound by the terms of their contract and that courts cannot rewrite contracts for them. This principle is now trite and was affirmed in National Bank of Kenya Ltd v Pipeplastic Samkolit (K) Ltd & Another [2001] eKLR, where the Court of Appeal stated: “ A court of law cannot rewrite a contract between the parties. The parties are bound by the terms of their contract, unless coercion, fraud or undue influence are pleaded and proved.” 62. Similarly, in Pius Kimaiyo Langat v Co-operative Bank of Kenya Ltd [2017] eKLR, the Court of Appeal reiterated that courts cannot vary or depart from terms freely chosen by contracting parties. The court observed as follows: “ We are alive to the hallowed legal maxim that it is not the business of Courts to rewrite contracts between parties. They are bound by the terms of their contracts, unless coercion, fraud or undue influence are pleaded and proved.” 63. The contract did not make the Defendant’s obligations conditional on prior notice of unrest, nor was there any clause exempting the Defendant from liability for labour unrest. The obligation was strict: to ensure discipline and prevent disruptive conduct. By its own admission, the Defendant neither anticipated nor controlled the conduct of its employees. That inability amounted to a failure to meet the contractual standard. 64. I therefore find that the Defendant breached the agreement by failing to provide disciplined labour and to prevent disruption of the Plaintiff’s operations. 65. The second issue for me to determine is whether the Defendant is vicariously liable for the acts of its employees during the strike of 2nd May, 2017 to 4th May, 2017. The principle applicable is straightforward: where a contractor undertakes to supply labour and remains the employer of the labourers, he bears responsibility for their actions in the course of performing the contract. https://new.kenyalaw.org/akn/ke/judgment/kehc/2025/18897/eng@2025-11-20 10

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66. In the instant case, it is the Defendant that supplied its workers to the Plaintiff’s factory under the agreement. The Plaintiff did not employ the workers; the Defendant did. The Defendant was required to provide the workers with identification cards, processed their payroll, handled statutory remittances and later terminated their employment. All these confirm the existence of the employer–employee relationship between the Defendant and the striking workers. 67. Notably, the strike occurred during the subsistence of the contract and in the course of the workers’ engagement at the Plaintiff’s premises under the terms of the contract. The conduct complained of - barricading entrances, preventing operations, abandoning duties - was directly connected with the very work for which the Defendant supplied the employees. The Defence witness did not deny such conduct and as a matter of fact, admitted by stating that the workers were rowdy to an extent that the police had to be called in. 68. In such a setting, vicarious liability flows from the employer unless there is a contractual or statutory exemption, none of which was pleaded or proved by the Defendant. 69. The Defendant’s argument that the illegality of the strike absolves it is in my most respectful view misconceived: an employer whose employees commit tortious or disruptive acts in the course of employment does not escape liability merely because the employees acted unlawfully. To accept such an argument would be to undermine the very purpose of the labour-supply contract. 70. The doctrine of vicarious liability imposes liability on an employer for the acts of its employees committed in the course of employment. The principle was authoritatively stated in the case of Muwonge v Attorney General [1967] EA 17 in which the Court of Appeal of East Africa held that an employer remains liable even where the employee acts unlawfully, provided the act occurs in the course of employment. The court observed as follows: “ The master is liable for the acts of his servant committed in the course of his employment, even if the acts are done contrary to the master’s orders, and even if they are criminal.” 71. The court continued: “ The test is not whether the act was done for the benefit of the master, but whether it was done in the course of the servant’s employment.” 72. We have seen above that in Joseph Cosmas Khayigila (supra) that the Court held that an employer is liable for wrongful acts committed in the course of duty even if such acts are expressly prohibited. 73. It is not in dispute that the strike occurred during the subsistence of the contract and arose directly from the workers’ engagement at the Plaintiff’s premises. Their conduct - though disorderly and perhaps even illegal - was committed in the course of employment and in relation to the work for which the Defendant supplied them. The Defendant is in the premises liable for acts connected to its employees’ assigned duties. 74. Illegality does not severe the vicarious liability relationship. As the Court of Appeal observed in Tabitha Nduhi Maina v Samuel Muganda [2014] eKLR, the fact that an employee commits a wrongful or unlawful act does not, by itself, absolve the employer. The court stated as follows: “ The principle of vicarious liability is an anomaly in our law because it imposes strict liability on an employer for the delict of its employee in circumstances in which the employer is not https://new.kenyalaw.org/akn/ke/judgment/kehc/2025/18897/eng@2025-11-20 11

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itself at fault. An employer will be held to be vicariously liable if its employee was acting within the course and scope of employment at the time the delict was committed.” 75. The result I then reach is that the Defendant is vicariously liable for the acts of its employees during the strike. 76. The third issue that I am tasked to determine is whether the Plaintiff suffered loss and damage as a result of the breach, and if so, whether such loss is recoverable from the Defendant. 77. The Plaintiff operated a sugar-production factory with daily processing capacity of 2,500 tonnes, as per the evidence of its witness, which was largely unchallenged by the Defendant. Evidence presented through the Plaintiff's Financial Manager, supported by the audit reports, the sample invoices and daily sales data, demonstrated that the three-day paralysis of operations caused significant loss of production and revenue. 78. Although the Defendant disputed these figures, it did not produce alternative computations nor challenge the audit methodology. The Plaintiff’s evidence therefore stands uncontroverted. 79. The losses claimed - Ksh.29,489,431/- - were directly tied to the preventable stoppage of operations attributable to the Defendant’s breach of contract. 80. The amount claimed - Ksh.29,489,431 - is in the nature of special damages, being a quantified financial loss arising from stoppage of sugar production during the period of the strike by the Defendant’s employees. 81. The law requires that special damages must be specifically pleaded, and strictly proved. The Court of Appeal in Hahn v Singh [1985] KLR 716 stated that: “ Special damages must not only be specifically claimed (pleaded) but also strictly proved … for they are not the direct natural or probable consequence of the act complained of and may not be inferred from the act. The degree of certainty and particularity of proof required depends on the circumstances and nature of the acts themselves.” 82. In Coast Bus Service Ltd v Murunga [1992] LLR 318 (CAK) affirmed that special damages must be particularized and proved with precision. The court held as follows: “ We would restate the position. Special damages must be pleaded with as much particularity as circumstances permit and in this connection it is not enough to simply aver in the plaint … that the particulars of special damages were to be supplied at the time of trial. If at the time of filing suit … the particulars of special damages were not known, then those particulars can only be supplied at the time of trial by amending the plaint to include the particulars which were previously missing. It is only when the particulars of the special damages are pleaded in the plaint that a claimant will be allowed to proceed to strict proof of those particulars …” 83. The Plaintiff pleaded the amount it claimed in the plaint and produced: an independent audit report by RSM (Eastern Africa) Consulting Limited, sample invoices, daily sales records and production capacity details, all demonstrating how the three-day stoppage translated into the claimed financial loss. 84. The Defendant offered no counter-evidence, no alternative computation and no expert challenge to the audit. On the balance of probabilities (51% versus 49% as per the case of William Kabogo Gitau (supra), the Plaintiff’s evidence stands. https://new.kenyalaw.org/akn/ke/judgment/kehc/2025/18897/eng@2025-11-20 12

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85. I however note that the quantification of the losses as done by the auditor was on the basis of a disruption period of four days, yet the evidence of both the Plaintiff’s and the Defendant’s witnesses was that the strike commenced on 2nd May, 2017 and lasted until 4th May, 2017 – a period of three days. Thus then, on the basis of the same calculations, a three-day disruption would amount to losses of Ksh.22,117,073.25/-. 86. The loss was the natural and foreseeable result of labour disruption in a continuous-process sugar factory. The Hadley v Baxendale principle applies: losses that arise naturally from a breach or are within the parties’ contemplation at contracting are recoverable. 87. Under well-established principles of contract law, a party in breach is liable for losses that arise naturally from the breach or that were within the contemplation of the parties at the time of contracting. 88. Given the nature of the Plaintiff’s continuous production operations and the critical role of loaders and support staff, interruption of labour necessarily entailed stoppage of production. The loss was therefore foreseeable and recoverable. 89. I accordingly find that the Plaintiff suffered loss amounting to Ksh.22,117,073.25/- and that such loss is recoverable from the Defendant. 90. The fourth issue for determination is the effect that the judgment entered against the 123 Third Parties has on the parties herein? 91. The court (Shariff J.) entered judgment against the 123 Third Parties for the same sum claimed in this suit on the basis of their default of appearance. As I have stated above, that judgment remains undisturbed. 92. That judgment does not, however, extinguish or diminish the Plaintiff’s claim against the Defendant. The Plaintiff was not a party to the third-party proceedings, which were initiated by the Defendant for indemnity or contribution. The Defendant cannot therefore deflect primary liability on the basis of the judgment against the Third Parties. 93. The effect of the judgment is simply that the Defendant has a right of indemnity or contribution from its former employees, but its liability to the Plaintiff remains intact. The Defendant reserves the right to pursue its former employees but is not shielded from the liability to the Plaintiff. I therefore find that the judgment against the Third Parties does not affect or absolve the Defendant’s liability to the Plaintiff. 94. The fifth issue relates to the reliefs that should follow the findings above. Having found that: the Defendant breached the agreement; the Defendant is vicariously liable for the conduct of its employees; and that the Plaintiff suffered recoverable loss; the Plaintiff is entitled to the reliefs sought. H. Disposition. 95. The upshot then is that I enter judgement for the Plaintiff against the Defendant for: a. Special damages – Ksh.22,117,073.25/- as having been pleaded and strictly proved. b. Interest shall accrue at court rates from 6th August, 2021, being the date of filing suit, until payment in full. c. On costs, the same, under Section 27 of the Civil Procedure Act, follow the event. The Plaintiff is therefore awarded costs of the suit. https://new.kenyalaw.org/akn/ke/judgment/kehc/2025/18897/eng@2025-11-20 13

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d. 96. The Defendant’s rights, if any, against the 123 Third Parties remain governed by the separate judgment already entered by the court and shall not affect the present decree against the Defendant. This file is hereby closed. DELIVERED (VIRTUALLY), DATED & SIGNED THIS 20TH NOVEMBER, 2025. JOE M. OMIDO JUDGE For Plaintiff: Mr. Mukuha For Mr. Bwire. For Defendant: Mr. Maonga. For The 123 Third Parties: No Appearance. Court Assistants: Mr. Ngoge & Mr. Juma. Mr. Maonga: I seek 30 days stay of execution to get instructions from my client. Mr. Mukuha: 14 days are sufficient for getting instructions. Court: Stay of execution is granted for 30 days. https://new.kenyalaw.org/akn/ke/judgment/kehc/2025/18897/eng@2025-11-20 14

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