Sichuan Huashi Enterprises Corporation East Africa (ea) Limited v Trans-kenya Investments Limited

b. The balance of Kshs. 61,007,474/- in six installments commencing 30.11.2016 and subsequently on 30.10.2016, 30.11.2016, 31.12.2016, 31.1.2017, 28.2.2017, 30.3.2017 and 30.4.2017. 5. The plaintiff indicated that the defendant paid the initial Kshs. 10,000,000/- and a subsequent Kshs. 5,000,000/- on 1.12.2016 but thereafter defaulted. That it issued the defendant with a reminder to settle the outstanding balance of Kshs. 59,597,823.63/- on 22.8.2017. That on 23.8.2017, the defendant responded seeking more time to settle the debt. 6. The plaintiff further indicated that the defendant persisted with the default leading to the issuance of a demand letter of 26.8.2019 which was also not complied with, precipitating this suit. 7. From this backdrop, the plaintiff therefore seeks entry of judgment against the defendant for: a. Kshs. 79,448,476.42 b. Interest on (a) at the rate agreed by the parties in the settlement agreement (i.e. at Kenya Commercial Bank interest rates until payment in full). c. Costs of the suit. d. Any other remedy that the court may deem fit to award. Response 8. In opposition to the claim, the defendant filed a statement of defence dated 15.2.2025. It urged the court to dismiss the suit for want of merit. 9. The defendant denied the claim. It asserted that the plaintiff breached the agreement through subcontracting or assigning its strict obligations. It also contended that a preliminary lay inspection of the building revealed substantial defects. 10. The defendant stated that its representatives severally raised concerns with the plaintiff and other professionals involved during meetings held between the parties involved in the construction. 11. The defendant disputed the plaintiff’s invoices and contended that the plaintiff does not deserve payment of the amount demanded as the breach led to poor workmanship. 12. The defendant specifically denied that it entered into the debt settlement agreement or that any payment agreement 13. However, the defendant indicated that various oral agreements had been made with the plaintiff allowing it additional time to pay. It also indicated that it always informed the plaintiff of its financial status. 14. The defendant added that any payment agreement that was entered into has been varied on numerous occasions with the consent of the parties and further discussions were to take place between the parties to deal with all the outstanding issues and to factor in all the defects. Evidence 15. The trial commenced on 18.7.2022 before Hon. Chepkwony’ J. The plaintiff called Duan Yang’ (Mr. Yang’) as PW1. He adopted his witness statement dated 12.7.2022, similar to the plaint, as his evidence in chief. He also produced the plaintiff’s bundle of documents dated 17.12.2017. https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/1168/eng@2026-01-29 2

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16. Mr. Yang stated that he joined the company as a site engineer in 2007 and has been working for the company for 15 years. He indicated that the company’s sole director was also not in Kenya. He thus substituted Mr. Cau Zheng’ who left the plaintiff’s employment and the country. 17. Upon cross-examination, Mr. Yang’ acknowledged that he did not play an active role in the subject construction project. However, he claimed that he had all the information about it as he is in management. 18. Mr. Yang’ denied that there were disagreements between the parties according to the notice of site suspension on 29.2.2016. He also stated that no disagreements were referred to an arbitrator in accordance with clause 45.1 of the contract. He stated that despite the dispute not being submitted to the arbitrator there was a debt settlement agreement between the parties specifying how much would be paid and how the same would be settled. 19. Mr. Yang’ admitted that he was not involved in the negotiations and the agreement. He also admitted that the agreement was not given a specific date, just the year 2016. He could not recall the date of the agreement. 20. Mr. Yang’ claimed that the date of the agreement is not necessary if parties sign the agreement. He maintained that the construction works were not completed but suspended. 21. On its part, the defendant called its administration manager, Mr. John Kavila. He adopted his witness statement dated 22.4.2022, reflective of the defence, as his evidence. He also produced the defendant’s bundle of documents dated 22.4.2022, marked as DExh D1 and 2. 22. At cross examination, Mr. Kavila confirmed that the dispute was never submitted to arbitration. He admitted that the reason that the debt settlement agreement was not honoured was due the financial constraints faced by the defendant and there was evidence of progress reports by the defendant explaining why the debt had not been paid and efforts undertaken. 23. Mr. Kavila intimated that the defendant has identified a suitable financial investor and approval given to them on how the defendant shall pay the amount owed which includes principal and interest. Submissions 24. Through written submissions dated 14.2.2023, the plaintiff urged the court to allow its claim with costs. It highlighted that during trial, the defendant’s witness acknowledged the debt. It asserted that the debt settlement agreement was clear and unambiguous. It also contended that the defendant cannot deny the validity of the agreement yet it made payments under it. 25. The plaintiff submitted that the agreement was drafted by the defendant’s advocates and was properly executed. 26. According to the plaintiff, the principal amount owed is Kshs. 56,007,474.00/- and the accrued interest of Kshs. 50,223,700 as of 9.2.2023. 27. The plaintiff relied on: 1. Shah v Shah [1988] KLR 2. Garvey v Richards [2011] JMCA 16 3. Omar Gorhan v Municipal Council of Malindi (Council Government of Kilifi) v Overlook Management Kenya Ltd [2020] eKLR https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/1168/eng@2026-01-29 3

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4. Jiwaji v Jiwaji [1968] E. A. 547 5. Automotive Solutions (Nairobi) Ltd v Business Partners International (K) Ltd [2017] eKLR 6. Republic v Institute of Certified Public Secretaries of Kenya Ex-parte Mundia Njeru Geteria [2010] eKLR 7. Behan & Okero Advocates v National Bank of Kenya [2007] 8. National Bank of Kenya v Pipe Plastic Samkolit (K) Ltd (2002) 2 E. A. 503, (2011) eKLR 9. Pius Kimaiyo Langat v Co-operative Bank of Kenya Ltd [2017] eKLR 10. Mugunga General Stores v Pepco Distributors Ltd [1987] eKLR 28. Through written submissions dated 21.3.2023, the defendant urged the court to dismiss the plaintiff’s claim for want of merit with costs. It argued that it should be allowed to pay the debt in installments as its financial position has not improved. 29. The defendant submitted that the plaintiff did not exercise the due standard of care and professionalism in the execution of its obligations under the agreement and conditions of contract for building works dated 8th July 2015. It faulted the plaintiff for seeking enforcement of contract while it was in breach of the contract. 30. The defendant also faulted the plaintiff for failing to disclose numerous concerns raised during the construction period. It submitted that it has approached the issue in good faith and sought the court’s intervention. 31. The defendant relied on: 1. Hildegard Ndalut v Lelkina Dairies Ltd & another [2005] eKLR 2. Diamond Star General Trading LLC v Ambrose D. O. Rachier carrying on business as Rachier Amollo Advocates [2018] eKLR 3. Sifa Steel Rolling Mills v Jubilee Insurance Company Limited 4. Rodah Cheptonui Lang’at v Aggrey Watindi & 2 others [2021] eKLR 5. John Njue Nyaga v Nicholas Njiru Nyaga & Another [2013] eKLR 6. Kay Construction Company Limited v Eco Bank Kenya Ltd & 6 others [2015] eKLR Analysis and Determination 32. I have considered the pleadings, the evidence, the submissions and the authorities cited. The issues for determination are whether the plaintiff has proved its case on a balance of probabilities and whether it is entitled to the prayers sought. 33. Section 107 of the Evidence Act provides as follows: “ 107. Burden of Proof (1) Whoever desires any court to give judgment as to any legal right or liability dependent on the existence of facts which he asserts must prove that those facts exist. https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/1168/eng@2026-01-29 4

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(2) When a person is bound to prove the existence of any fact it is said that the burden of proof lies on that person.” 34. I have examined the deed of acknowledgment and settlement of 2016. At trial, the defendants witness admitted the debt and the outstanding payments due. He also admitted that he was the author of the letter dated 2.10.2016 which acknowledged the debt. 35. Although it does not bear a specific date, it was drafted by the defendant’s advocates Messer’s Kimani & Michuki Advocates. it is executed by Mr. Mwaura Ngaari, the chairperson defendant’s board of directors. Mr. Ngaari confirmed signing the agreement in his letter dated 23.8.2017 and conceded that the defendant had been unable to make the pending payments. 36. I have also read the letter of 3.10.2016 acknowledging the debt of Kshs. 71,007,474/-. 37. Despite alleging that the plaintiff breached the conditions of the construction contract, the defendant did not adduce any evidence to support this claim leaving it at a very high level of generalization. 38. On the basis of the evidence tendered, the court finds that the plaintiff has proved its claim against the defendant on a balance of probabilities. Interest 39. Although the plaintiff claimed interest at Kenya Commercial Bank interest rates, from my reading, the agreement does not specify the interest rate to be at Kenya Commercial Bank interest rates. 40. Nonetheless, the plaintiff is entitled to interest. Disposition 41. In conclusion, I hereby enter judgement for the plaintiff against the defendant, in the following terms: (a) Kshs. 71,007,474/-. (b) Interest on (a) at court rates from the date of filing of the suit until payment in full. (c) Costs of the suit. DATED, SIGNED AND DELIVERED THROUGH APPLICATION THIS 29TH DAY OF JANUARY, 2026 MICROSOFT TEAMS ONLINE ------------------F. GIKONYO M JUDGE In the presence of: Kamara for Applicant Gakunga for Owino for defendant CA- Kinyua https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/1168/eng@2026-01-29 5

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