Agni Enterprises Limited v Apex Steel Limited

was defective, no contract existed between the parties, finding judgment in favour of the Plaintiff/ Respondent and upholding a bizarre claim of interest. 5. It was prayed that the appeal be allowed, the Judgment of the trial court be set aside. 6. The appeal was canvassed by way of written submissions. Both parties complied by filing their rival submissions dated 11/09/2024 by the Appellant and 17/10/2024 by the Respondent. Analysis 7. This Court has considered the pleadings, evidence, submissions and authorities relied on. The issues that falls for this Court’s determination are; a. Whether the appeal has merits b. Who bears the costs 8. This being a first Appeal, the Court should with judicious alertness re-evaluate the evidence, and consider arguments by parties and apply the law thereto, and, make its own determination of the issues in controversy. Except however, that it should give allowance to the fact that it neither saw nor heard the witnesses’ testimonies. (See Selle & Another vs. Associated Motor Board Company Ltd. [1968] EA 123) 9. I have perused the Memorandum of Appeal and the entire record of the Trial Court and I am alive to the fact that my task is to re-evaluate the evidence in order to establish whether or not the Trial Court erred its finding. 10. On the issue of the Respondent failing to file a valid verifying affidavit, Order 4 Rule (1) and (2) of the Civil Procedure Rules provides as follows; (1) (2) 11. The plaint shall contain the following particulars— (a) the name of the court in which the suit is brought; (b) the name, description and place of residence of the plaintiff, and an address for service; (c) the name, description and place of residence of the defendant, so far as they can be ascertained; (d) the place where the cause of action arose; (e) where the plaintiff or defendant is a minor or person of unsound mind, a statement to that effect; and (f) an 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 and that the cause of action relates to the plaintiff named in the plaint. The plaint shall be accompanied by an affidavit sworn by the plaintiff verifying the correctness of the averments contained in rule 1(1)(f) above. The Appellant submitted that the Respondent only verified the correctness of paragraphs 6 and 7 of the Plaint, but not the rest of the averments in the Plaint hence the suit was not properly filed. On the https://new.kenyalaw.org/akn/ke/judgment/kehc/2025/19548/eng@2025-11-13 2

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other hand, the Respondent submitted that the Plaintiff was only required to verify the correctness of the averments contained in rule (1) (f). 12. I have perused through the verifying affidavit by the Plaintiff. I paragraph 2, the Plaintiff verified the averments contained in paragraph 6 and 7 of the Plaint which reads as follows; (6) The cause of action relates to the Plaintiff named herein (7) There’s no other suite pending and there have been no previous proceedings in any court between the plaintiff and the defendant 13. From the above, the Plaint and the Verifying Affidavit are in compliance with Order 4 Rule 2 of the Civil Procedure Rules. 14. As to whether there was a contract between the parties, the Respondent states that there was an oral contract between it and the Appellant. The Appellant in its Statement of Defence has admitted that there was a verbal agreement between the parties for the supply of steel by the Respondent to the Appellant. The goods would be paid for after delivery. The business relationship ran from year 2009 to 2018. 15. There is no written contract between the parties. The contract may be inferred from the conduct of the parties. In the Court of appeal case of Ali Abid Mohamed v Kenya Shell & Company Limited (2017) eKLR, it was held as follows; “ It therefore follows that a contract can exist where no words have been used but where it can be inferred from the conduct of the parties that a contract has been concluded. See Timoney and King v King 1920 AD 133 at 141. In the circumstances of the instant case, there existed an enforceable contract between the parties by reason of Conduct. Indeed, it was not disputed by the respondent that it supplied petroleum products to the appellant at a specific amount per liter and for a certain period of time.” 16. In addition to the admission of the existence of an oral contract by the Defendant, the conduct by the parties infer that there was a contract that had been concluded between the parties. I find that there was a valid contract between the parties. 17. The next issue for determination is whether the court erred in finding that the Appellant owed the Respondent the money as claimed. It is not in dispute that the Respondent supplied steel to the Appellant. What is in dispute is whether or not the steel was fully paid for. The Respondent produced the delivery notes and corresponding invoices as proof that the steel was delivered. It was explained why some delivery notes did not bear the stamp of the Appellant. 18. The Respondent further produced a statement of account showing how the payments were made and the balance due. On the other hand, the Appellant disputed some documents produced like LPOs, but none were produced for purposes of comparison, for the court to discern if the documents relied on by the Respondent was genuine or not. 19. In the absence of documentary evidence challenging that of the Respondent, I do concur with the findings of the trial court that the Respondent had proved on a balance of probabilities that goods were supplied and not paid for. I find that the Respondent is entitled to the principal amount as claimed. 20. As for the interest, the Respondent claimed an interest rate of 3% per month for the outstanding amount. The Defendant did not mention anything to do with the interest rates. I have perused the https://new.kenyalaw.org/akn/ke/judgment/kehc/2025/19548/eng@2025-11-13 3

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demand notices to the Appellant by the Respondent. The claim of 3% as interest of the outstanding balance was demanded. 21. The Appellant submits that there is no evidence to show that he parties had agreed on a 3% interest penalty on the principal amount. The agreement between the parties was verbal. The invoices indicated an interest rate of 3%. I find no fault by the trial court in upholding the claim of the interest as claimed. (See Devcon Group Limited v Timsales Limited [2016] where the court on appeal failed to interfere with the interest rates as agreed by the parties). 22. The above notwithstanding, I cannot ignore the fact that the amount claimed as penalty interest is more than double the principal amount claimed. By allowing the claim which has accumulated to exorbitant levels would be exposing the Appellant to be exploited by the Respondent. This is a ripe case where the in duplum rule which has been extended to non-financial institutions, would come to the aid of the Appellant. The total amount claimed as penalty interest should not exceed the principal amount claimed. Judgement on interest is hereby set aside and substituted with Judgment for interest capped at Kshs. 3,200,996.51. 23. On costs, the appeal having been partially successful, each party is to bear its own costs. Determination 24. In the upshot, I make the following orders: a. b. Judgment of the lower court in favor of the Plaintiff/ Respondent is hereby set aside and substituted with Judgment in favor of the Plaintiff/ Respondent for; i. Kshs. 3,200,996.51 being the principal amount ii. Interest of (i) above capped at Kshs. 3,200,996.51 iii. Cost of the lower court suit to the Plaintiff Each party to bear its own costs on this appeal It is so ordered. DATED, SIGNED AND DELIVERED AT MOMBASA ON 13TH DAY OF NOVEMBER, 2025. F. WANGARI JUDGE In the presence of; Mr. Ochieng Advocate the Appellant Ms. Lelu Advocate for the Respondent Ms. Salwa, Court Assistant https://new.kenyalaw.org/akn/ke/judgment/kehc/2025/19548/eng@2025-11-13 4

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