AIA Architects formerly Adventis-Inhouse Africa Limited v Yooshin Engineering Corporation (Civil Suit 36 of 2019) [2026] KEHC 4264 (KLR) (26 February 2026) (Judgment) Neutral citation: [2026] KEHC 4264 (KLR) REPUBLIC OF KENYA IN THE HIGH COURT AT MOMBASA CIVIL SUIT 36 OF 2019 F WANGARI, J FEBRUARY 26, 2026 BETWEEN AIA ARCHITECTS FORMERLY ADVENTIS-INHOUSE AFRICA LIMITED ...................................................................................................... PLAINTIFF AND YOOSHIN ENGINEERING CORPORATION ................................... DEFENDANT JUDGMENT 1. The plaintiff filed this suit vide an Amended Plaint dated 31st May 2019 seeking judgment against the Defendant for a declaration that despite being lead consultants, lacked jurisdiction or authority to terminate the contract between the Plaintiff and the Kenya Ports Authority (KPA), to undertake or reassign the design, review, supervision, and construction of the first three berths and associated infrastructure at Lamu Port, Manda Bay, or to engage other foreign or local firms contrary to the tender award, in which the plaintiff was entitled to a 42% local component valued at Kshs. 413,900,005/=. 2. The Plaintiff further seeks declarations that the sub-contract dated 18th August 2017 and the Termination Notice dated 4th May 2019 are null and void, orders for payment of the outstanding Kshs. 53,085,830/= for completed design and review works, payment of Kshs. 413,900,005/= being the contractual entitlement, and orders permitting it to continue and/or exclusively undertake the project’s design review and construction supervision in accordance with the approved technical and financial proposals. The plaintiff also seeks damages equivalent to 14.5% of the project value for plagiarism or misuse of its designs or as may be determined by the court, together with costs of the suit and interest at court rate. 3. The Plaintiff’s case is that it entered into a mutual agreement with the Defendant to form a consortium to bid for and were subsequently awarded Tender No. KPA/057/2012-13/MD by the Kenya Ports Authority for consultancy services relating to the detailed design, review, and supervision https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/4264/eng@2026-02-26 1
page 1 of 18
of construction of the first three berths and associated infrastructure at the proposed Lamu Port, Manda Bay. 4. It was stated that the consortium comprised of two foreign firms, namely Yooshin Engineering Corporation and DY Engineering, and the Plaintiff as the local component, entitled to 42% of the tender award valued at Kshs. 413,900,005/=, while the foreign component was awarded 58%. The plaintiff contended that it met all tender requirements, submitted staff curricula vitae under the tender as their employees, substantially performed the design, review, and supervision works, and delivered approved designs to the Defendant. 5. The Plaintiff however stated that the Defendant, despite being lead consultants, coerced it into signing a sub-contract dated 18th August 2017 that unlawfully altered the tender terms, drastically reduced the Plaintiff’s entitlement to Kshs. 18,000,000/=, withheld payments amounting to Kshs. 53,085,830/ =, frustrated its performance, excluded it from the project, engaged other consultants contrary to the tender, concealed the final contract and variations with Kenya Ports Authority, and issued an unlawful Termination Notice dated 4th May 2019 to compel surrender of the Plaintiff’s copyrighted design soft copies. 6. The Plaintiff further alleged that the Defendant plagiarized and manipulated its designs, infringed their intellectual property rights, violated public procurement laws and the tender’s terms of reference, and acted in bad faith, rendering the sub-contract and termination null and void ab initio. Consequently, the Plaintiff maintain that its continued participation is fundamental to the validity of the contract with Kenya Ports Authority. 7. In opposition to this suit, the Defendant filed a Statement of Defence and Counter Claim dated 21st July 2023. In its defence, the Defendant denied all the averments contained in the Plaintiff’s Amended Plaint. The Defendant averred that it has extensive engineering expertise and bid for Tender No. KPA/057/2012-13/MD as a joint venture exclusively with DY Engineering, without the Plaintiff, who was neither a bidder nor a consortium partner but was later engaged solely as a sub-consultant. 8. It contended that the tender was awarded entirely to the Defendant–DY Engineering joint venture and that the Plaintiff had no contractual privity with Kenya Ports Authority, any entitlement to 42% of the tender award or to Kshs. 413,900,005/=, as the so-called “local component” merely referred to expenditure on locally sourced goods and services and did not vest rights in the Plaintiff. 9. The Defendant asserted that the Plaintiff’s role was limited to architectural review of building works under a duly negotiated sub-consultancy agreement dated 18th August 2017, for which the Plaintiff was entitled to Kshs. 18,000,000/= and was paid 70%, with the balance conditional upon submission of soft copy designs, which the Plaintiff failed or refused to deliver. The Defendant maintained that termination was lawfully effected pursuant to the sub-contract due to the Plaintiff’s non-performance. 10. It disputed all claims relating to supervision works, unpaid expenses, variation sums, threats, exclusion from the project, and damages, stating that the Plaintiff declined to submit quotations for supervision and that all agreed expenses were fully settled. The Defendant further maintained that the impugned designs belong to the Government of Kenya, having originated from Japanese Port Consultants Limited, and that any copyright vests in the procuring entity. 11. Consequently, the Defendant averred that the Plaintiff is not entitled to any of the reliefs sought, that the suit is incompetent for want of privity of contract, and that any procurement-related grievances fall outside the jurisdiction of the Court. https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/4264/eng@2026-02-26 2
page 2 of 18
12. In its Counter Claim, the Defendant sought judgment against the Plaintiff for declarations that the Plaintiff breached the sub-consultancy agreement dated 18th August 2018 by failing to submit the required Computer Aided Design (CAD) or soft copy drawings for the building works, thus the Plaintiff is not entitled to any outstanding contractual payments. 13. The Defendant also sought for an order of special damages amounting to Kshs 210,759,436.13 arising from the alleged breach, compensation for losses to be assessed following the injunctive orders issued by the Court on 31st May 2019, interest on the claimed sums at Court rates until payment in full, and costs of the suit. 14. The Defendant’s case was that the Plaintiff breached the sub-consultancy agreement dated 18th August 2017 by failing and refusing to submit the required Computer Aided Design (CAD) or soft copy drawings for the building works despite numerous reminders. It asserted that the agreement, particularly Clauses 3.1 and 3.7.1 read together with Schedule 2 and Appendix A, imposed strict timelines tied to the defendant’s contractual obligations to Kenya Ports Authority, including submission of final detailed designs in both hard and soft copy within six months. 15. The Defendant averred that the Plaintiff’s failure to deliver the CADs within the agreed timelines, despite being fully aware of their critical nature, compelled the Defendant to lawfully terminate the agreement pursuant to Clause 7.3. Consequently, the Defendant claims entitlement to compensation under Clause 7.6 and particularizes its losses arising from redesign and construction costs amounting to Kshs. 19,970,466/= inclusive of associated USD-denominated costs converted at the prevailing rate, with further damages to be assessed arising from injunctive orders granted on 31st May 2019, which were issued on the Plaintiff’s undertaking as to damages. 16. This matter proceeded to hearing where the plaintiff called one witness to ventilate its case, whereas the Defendant called one witnesses in support of its case. Plaintiff ’s Case 17. Mr. Mohammed Hamisi Munyanya a partner at AIA Architect Limited testified as PW1. He adopted his witness statement dated 15th November 2023 and as his evidence-in-chief and produced the documents in the Plaintiff’s Lists and Bundles of Documents dated 15th November 2023 as Plaintiff exhibits Nos. 1 to 19. 18. Mr. Munyanya testified that the Plaintiff’s claim is bona fide and arises from a series of contracts relating to a project of national importance that was advertised in 2012, for which it independently possessed the capacity to tender. However, the Plaintiff was subsequently approached by the Defendant, through the Office of the Vice President, to form a consortium for purposes of the tender, notwithstanding that it could have bid on its own. 19. PW1 stated that the Plaintiff formed and led a local consortium to bid for Tender No. KPA/057/2012-13/MD for consultancy services for the design, review, and supervision of construction of the first three berths and associated infrastructure at the proposed Lamu Port, and subsequently entered into a consortium arrangement with the Defendant and DY Engineering pursuant to email correspondence and formal documentation submitted to Kenya Ports Authority. 20. He referred to page 15 of the Plaintiff’s Bundle of Documents and further stated that the bid was expressly structured as a consortium, with the Plaintiff constituting the local component responsible for design and supervision works, contributing 42% of the workforce and expertise. The tender award dated 31st January 2013 allocated Kshs. 413,900,005/= to the local component and USD 5,693,044/= https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/4264/eng@2026-02-26 3
page 3 of 18
to the foreign component, in compliance with the mandatory local participation requirements under procurement law. 21. PW1 referred to pages 11, 48 & 97 of the Plaintiff’s Bundle of Documents and asserted that public procurement law required a minimum 40% local participation, which it fulfilled as the local company, and that the tender award dated 31st January 2013 expressly allocated Kshs. 413,900,005/= to the local component and USD 5,693,044/= to the foreign component, later rectified by correspondence. 22. He contended that after the award, the Defendant frustrated the Plaintiff’s participation, commenced works unilaterally, ignored correspondence, and later coerced the plaintiff into signing a subconsultancy agreement under duress that radically altered the tender terms, reduced the Plaintiff’s entitlement to Kshs. 18,000,000/=, restricted its scope of works, removed exclusivity, and imposed impracticable expense limitations. 23. Despite this, the Plaintiff substantially performed its contractual obligations by undertaking design reviews, preparing detailed designs, submitting hard copy drawings, supervising works, and attending site meetings as per the minutes at page 104 of the Plaintiff’s Bundle of Documents, but withheld soft copy designs due to non-payment, intellectual property concerns, and fear of exclusion from supervision works, which the award stipulated would be handed to Kenya Ports Authority upon completion and full payment. 24. PW1 claimed that the Defendant altered and passed off the Plaintiff’s designs as its own, withheld payments, threatened termination, and engaged other consultants contrary to the tender award, resulting in substantial financial loss and violation of procurement and constitutional principles. 25. Mr. Munyanya referred to pages 67 to 97 of the Plaintiff’s Bundle of Documents and contended that the alleged breach relied upon by the Defendants is unenforceable as it arises from a subconsultancy agreement which the Plaintiff terms as illegal, having been introduced after the tender award merely to facilitate bonding, despite the parties having already commenced work based on earlier arrangements recognizing the defendants as lead consultants and the plaintiff as a consortium partner. He therefore asserted that the Defendant’s actions have unlawfully deprived the Plaintiff of its contractual entitlement, frustrated attempts at amicable settlement, and justify the reliefs sought in the suit. 26. Upon cross-examination PW1 testified that the Plaintiff has been in existence for more than two decades and participated in Tender No. KPA/057/2012-2013 as part of a team led by the Defendant, although the Plaintiff had the capacity to tender independently. 27. He stated that the only lawful contract governing the project was the main consultancy agreement between Kenya Ports Authority (KPA) and the Defendant as lead consultant, which incorporated the Plaintiff as part of the consortium, while the sub-consultancy agreement dated 18th August 2017 was signed under coercion, was illegal, and fundamentally altered the tender structure by reducing the Plaintiff’s entitlement. 28. PW1 maintained that the Plaintiff did not contract directly with KPA and was not a signatory to the main contract, having relied on the Defendant as lead consultant to sign on behalf of the consortium, and that the Kshs. 413,900,005/= claimed represents the amount allocated to the local component under the tender award, which KPA has already paid to the Defendant. 29. He asserted that the Plaintiff substantially performed its obligations by undertaking design reviews, preparing detailed designs, submitting PDF and hard copy drawings, supervising works, and attending site meetings, but was not fully paid, prompting the filing of this suit. https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/4264/eng@2026-02-26 4
page 4 of 18
30. Mr. Munyanya acknowledged that the pleadings did not particularize breach, special damages, payment stages, or clauses of the main contract, and that some payments were made under the sub-consultancy agreement, which he nonetheless maintained was unlawful. He confirmed that the Plaintiff withheld editable soft copy designs due to non-payment and alleged alteration and plagiarism of its works by the Defendant, though no documentary proof of alteration was produced. 31. In re-examination, Mr. Munyanya explained that the soft copy designs referred to are those transmitted electronically and clarified that the claim for Kshs. 413 million represents the amount awarded to the local component under the tender, not special damages, whose meaning he stated he did not fully understand. 32. He emphasized that inclusion of a local component was a mandatory requirement under the tender documents to protect local practitioners, without which Kenya Ports Authority could not lawfully award the tender, and that the Plaintiff was the designated local component entitled to Kshs. 413 million. 33. PW1 stated that the Kshs. 18 million paid to the Plaintiff constituted only a partial payment, far below the value of the services rendered, noting that architectural drawing designs alone were valued at approximately Kshs. 32 million. He further stated that the Plaintiff undertook all required stages of work, including detailed design reviews, preparation of designs, site visits, supervision, and participation in meetings, but was not paid commensurately, which is the sole reason for instituting this suit. 34. He maintained that the Plaintiff raised concerns through correspondence about delays in being formally on-boarded and was coerced into signing the sub-consultancy agreement solely to access the Kshs. 413 million due under the tender award. The Plaintiff thereafter closed its case. Defendant’s Case 35. Mr. Woo Back Kee, a South Korean engineer, Vice President of the Defendant’s company, Team Leader and Project Manager for the Lamu Port project testified as DW1 with the aid of a Korean interpreter by the name Don Gyun Kang. He adopted his witness statement dated 2nd November 2023 as his evidence in chief and produced the documents in the Defendants List and Bundle of Documents dated 2nd November 2023 as defence exhibit No. 1-48. 36. Mr. Kee testified that the Defendant company was incorporated in South Korea in 1966, has extensive international experience in infrastructure and engineering projects. He stated that in July 2012, the Kenya Ports Authority (KPA) invited expressions of interest for consultancy services for the Lamu Port project, and due to the project’s scale, the Defendant bid as a joint venture with DY Engineering, with the Defendant acting as the lead firm. The joint venture was subsequently shortlisted in October 2012 and invited to submit a Request for Proposals. 37. He explained that the Plaintiff was approached to assist locally with preparation of tender documents and was onboarded as a sub-consultant, not a consortium partner. That although the Plaintiff initially believed it would be a consortium partner, it later formally agreed in November 2012 to participate as a sub-consultant and issued a letter of association confirming this role. 38. DW1 contended that under KPA’s procurement rules, any change to include a third partner would have required prior written consent, which was never sought or granted. The tender was eventually awarded solely to the Defendant’s joint venture, and the contract was executed exclusively between KPA and the Defendant, excluding the Plaintiff. He stated that following negotiations with KPA, the https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/4264/eng@2026-02-26 5
page 5 of 18
final contract included a local component of Kshs. 413,900,005/= and a foreign component of USD 5,693,044/=. 39. The local component was intended to cover locally procured expenses such as remuneration, reimbursables, training, office costs, taxes, and miscellaneous expenses, and not to be paid wholesale to any local consultant. Mr. Kee provided a detailed breakdown of this local component and clarified that it comprised remuneration, reimbursables, contingency fees, withholding tax, and VAT, with further internal allocations under these heads. 40. It was DW1’s testimony that after execution of the contract, the Defendant requested quotations from the Plaintiff for detailed design works, but none were provided. Instead the Plaintiff began asserting, contrary to the letter of association, that it was a consortium partner and therefore entitled to the local component. He further testified that when construction commenced in 2016, the parties agreed to reduce their relationship into a written sub-consultancy agreement executed in August 2017, under which the Plaintiff agreed to provide design review services for a fixed lump sum of Kshs. 18,000,000/ = plus Kshs. 1,000,000/= for expenses. 41. He asserted that the Plaintiff was paid up to 70% of this amount in accordance with agreed milestones. DW1 stated that although the Plaintiff submitted some drawings, it failed to provide the required editable soft-copy CAD files despite repeated requests, rendering the designs unusable for the contractor. Instead, the Plaintiff began making unfounded demands for payment of the entire local component of the tender. 42. He maintained that the Defendant repeatedly clarified that the Plaintiff’s only entitlement was the agreed sub-consultancy fee. He further stated that the Plaintiff also failed to submit quotations for the second phase of construction supervision and issued improper claims for additional disbursements contrary to the agreement. Mr. Kee asserted that due to the Plaintiff’s continued breach and refusal to perform its contractual obligations, the Defendant lawfully terminated the sub-consultancy agreement in May 2019. 43. On cross-examination DW1 confirmed that he understands, reads, and speaks English, though he sometimes has difficulty hearing certain words. He referred to page 11 of the Plaintiff’s Bundle of Documents and testified that he did not personally see the advertisement for the tender but learned of it from the company’s head office and confirmed that the project involved consultancy services for detailed design, review, and supervision over a five-year period. 44. He stated that the tender was open to both local and international firms, allowed joint ventures or consortiums, and required compliance with Kenyan procurement laws, including a 40% local component, though a local company was not mandatory to win the tender. Mr. Kee explained that the initial bid involved two Korean companies, Yooshin and DY Engineering, and that AIA was later engaged to assist in preparation of the bid documents as a sub-consultant. He stated that AIA provided professional CVs, regulatory input, and fee details during the bid preparation stage. 45. He denied that AIA was a consortium partner and maintained that the Defendant was the final bidding entity, explaining that KPA would have rejected the bid had there been inconsistencies. He referred to pages 12, 15, and 48 of the Plaintiff’s Bundle of Documents and acknowledged correspondence requesting the plaintiff to act as a sub-consultant, which the Plaintiff accepted prior to award. He also confirmed that the letter of award reflected a local component of approximately Kshs. 413 million but did not allocate this amount to specific local companies. 46. He further testified that DY Engineering eventually dropped out, thus the foreign component was not apportioned between the Defendant and DY Engineering. Mr. Kee stated that the local component https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/4264/eng@2026-02-26 6
page 6 of 18
was meant to pay for local services and that under the contract with KPA, the Defendant specified the Plaintiff as its sub-consultant. He referred to page 104 of the Plaintiff’s bundle of documents and explained that supervision involved site visits and meetings, attendance records of which were kept, and confirmed his own attendance at some meetings. 47. He testified that civil works commenced earlier and were handled by the Defendant, while architectural designs were handed over to Plaintiff for review and preparation of detailed designs based on original designs provided by KPA. Mr. Kee confirmed that the project has since been completed and that payments were made, including payments for designs after engaging other professionals, though he admitted he had no documentary proof of engaging those consultants. 48. DW1 referred to page 55 of the Defendant’s documents and reiterated that for building works, stating that the Plaintiff was the only sub-consultant engaged and that the main contract existed solely between the Defendant and KPA. He referred to contractual clauses requiring KPA’s approval for changes to personnel or terms and stated that such approval was obtained for the sub-consultancy with the plaintiff, though the approval document was not produced at the time and would be availed later. 49. He further testified that payments under the contract were made partly in USD for foreign expenses and in Kenya Shillings for local expenses, and that the total local component of approximately Kshs. 413 million was inclusive of taxes, training, and other local costs, with about 60% of that amount paid toward local obligations. 50. In re-examination, DW1 reiterated that at the time of bidding, the Defendant bid as a joint venture and did not have a consortium agreement with Plaintiff, maintaining that the Plaintiff’s role was always that of a sub-consultant. He referred to the sub-consultancy agreement appearing in the record and stated that the local component of the contract covered taxes, civil works, building works, training, and miscellaneous expenses. He confirmed that the Plaintiff was engaged only for building works, while mechanical, electrical, plumbing, and other design works were undertaken by other consultants. 51. Mr. Kee stated that payments were not shared with DY Engineering due to high costs. He further testified that civil works commenced in June 2016, building works began in 2019, and that approximately 95% of the project comprised civil works, including sea reclamation, while only about 5% involved building works. In the end, he asserted that the key personnel listed for the project were eleven individuals, all of whom were Korean staff, and that the Plaintiff was not included among the key personnel. 52. At the close of the Defendant’s case, the Court gave directions for the filing of written submissions. The Plaintiff’s submissions dated 20th August 2025 were filed by the law firm of Teddy & Company Advocates, whereas the Defendant’s submissions dated 4th June 2025 & 11th December 2025 were filed by the law firm of Mohammed Muigai LLP. 53. The Plaintiff submitted that its case turns on the proper interpretation of the term “local component” under Section 157(9) of the Public Procurement and Asset Disposal Act (PPADA), while the Defendant construed the local component to include remuneration, reimbursable expenses, training costs, miscellaneous operational expenses, contingency fees, and taxes. The Plaintiff contended that the local component refers strictly to the portion of the contract payable to the local contractor. Applying the Literal Rule of statutory interpretation, Section 157(9) mandates that at least forty percent of supplies in international tenders be sourced from citizen contractors, and when read together with the statutory definition of local contractor, a firm registered and operating in Kenya, the local component must necessarily be reserved for a local entity. https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/4264/eng@2026-02-26 7
page 7 of 18
54. Applying the Mischief Rule, the plaintiff argued that the said provision was enacted to cure the mischief of foreign entities monopolizing public procurement, in line with Article 227 of the Constitution and Part XII of the PPADA on preferences and reservations. The Plaintiff therefore maintained that interpreting the local component to include taxes and miscellaneous costs would defeat this purpose, as taxes are payable regardless of whether a contractor is local or foreign, and would undermine the statutory objective of directing public expenditure to local enterprises. 55. The Plaintiff maintained that it was the designated local partner in Tender No. KPA/057/2012-13/ MD for consultancy services relating to the Lamu Port project, as was held by Hon. PJ Otieno. J. in his ruling delivered on 29th September 2019, where the Court found that the Plaintiff and Defendant participated in the bid as a consortium, based on the letter of association dated 20th November 2012, which formed part of the bid documents submitted to the Kenya Ports Authority (KPA). 56. The Plaintiff argued that the said finding is binding and leaves only the question of whether the Plaintiff was the local component, which the evidence overwhelmingly confirms. The Plaintiff submitted that the Defendant in cross-examination stated that it had no other local partner. The bid documents bore the Plaintiff’s logo and professional details, and the Defendant expressly invited the Plaintiff to join the bid, an offer that the Plaintiff accepted to the exclusion of other potential consortia. In the premise, the Plaintiff asserted that the Defendant is estopped from denying the consortium relationship. 57. The Plaintiff relied in the Court of Appeal case of Mjengo Limited v Menengai Oil Refineries Limited (Civil Appeal No. 80 of 2019) [2025] KECA 85 (KLR) and submitted that the doctrine of promissory estoppel, is applicable in this case since the Defendant made a clear promise intended to create legal relations, knew the Plaintiff would act on it, and the Plaintiff did so by abandoning other bidding opportunities, thereby creating a legitimate expectation that the Defendant cannot now resile from without inequity. 58. As to the amount due, it was stated by the Plaintiff that the tender award letter dated 31st January 2013 unequivocally awarded Kshs. 413,900,005/= as the local component and USD 5,693,304/= as the foreign component, both inclusive of taxes and subject to negotiations. It argues that the evidence adduced including the executed contract and negotiation minutes, confirms that this figure was never varied. 59. The Plaintiff therefore stated that having established that it was the local component, demonstrated full performance of its obligations through detailed designs, review, and supervision of construction, a fact implicitly acknowledged by the Defendant through completion of the project, which could not have proceeded absent the plaintiff’s deliverables, the entire sum of Kshs. 413,900,005/= was due and payable to it. It argued that the Defendant’s failure to remit the said sum to the local component amounts to conversion. To buttress these submissions, the Plaintiff relied on the case of Charles Mutuma M’kanake v Diocese of Meru Trustees Registered [2021] KEHC 4941 (KLR). 60. In the end, the Plaintiff submitted that the Defendant’s reliance on the sub-consultancy agreement and alleged termination of the Plaintiff is untenable. It maintained that Clauses 3.5 & 4.2 of the primary contract with KPA expressly required prior written approval from the Authority for subcontracting or changes to key personnel, none of which was obtained. Therefore, the Plaintiff asserted that the subconsultancy agreement and the purported termination were illegal and unenforceable. 61. In its submissions, the defendant relied on the Supreme Court case of Jovet (Kenya) Limited v Bavaria NV [2025] KESC 27 (KLR) and submitted that its case is anchored on the doctrine of privity of contract, which bars a non-party from enforcing rights under a contract to which it is not privy. The Defendant therefore stated that the Plaintiff, not being a party to the consultancy agreement dated https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/4264/eng@2026-02-26 8
page 8 of 18
29th November 2013 between it and Kenya Ports Authority (KPA), cannot enforce any alleged rights thereunder. 62. It argued that the Plaintiff’s attempt to circumvent privity by alleging the existence of a “consortium” fails for want of evidence, as no consortium agreement, memorandum of understanding, or joint bid submission was produced, nor does the term “consortium” appear in either the consultancy agreement or the sub-consultancy agreement (hereinafter referred to as a SCA). Instead, the only operative contract governing the parties’ herein relationship is the SCA dated 18th August 2017, reinforced by the letter of association which expressly defined the relationship as one of sub-consultancy. 63. The Defendant referred to the doctrine of pacta sunt servanda, as upheld by the Court of Appeal in the case of National Bank of Kenya Ltd v Pipeplastic Samkolit (K) Ltd & another [2001] KECA 362 (KLR) and further submitted that the sub-consultancy agreement is valid and enforceable and since the Plaintiff failed to discharge the heavy burden required to vitiate a contract on grounds of coercion or economic duress. 64. It then cited the Court of Appeal case of LTI Kisii Safari Inns Ltd & 2 others v Deutsche InvestitionsUnd Entwicklungsgesellschaft (DEG) & others [2011] KECA 1 (KLR) which set out the factors for establishing duress, including protest, absence of alternatives, lack of independent advice, and prompt repudiation and asserted that these factors were neither pleaded with particularity nor proven. 65. On the contrary, the Defendant argued that the Plaintiff negotiated the sub-consultancy agreement over several months, obtained substantial benefit by receiving 70% of the contract sum, performed under the agreement, and only raised allegations of duress nearly two years later following termination for cause. 66. On the claim of intellectual property infringement, the Defendant relied on the Supreme Court case of Communications Commission of Kenya & 5 others v Royal Media Services Ltd & 5 others [2014] KESC 53 (KLR) and submitted that the Plaintiff failed to plead or prove any actionable cause. He contended that allegations of “plagiarism,” even if assumed, do not in themselves found a civil or criminal claim. Any sustainable claim would lie in copyright infringement under Section 35 of the Copyright Act, yet the plaintiff neither pleaded ownership of copyright nor demonstrated unauthorized use. 67. The Defendant cited the Court of Appeal case of Mount Kenya Sundries Ltd v Macmillan Kenya (Publishers) Ltd [2016] KECA 377 (KLR) and argued that the evidence adduced before this Court shows that the original port designs belonged to KPA, with the Plaintiff merely revising them pursuant to the sub-consultancy agreement. He further stated that the Plaintiff neither proved ownership nor adduced the allegedly infringed drawings for the Court’s assessment. 68. It was submitted by the Defendant that the Plaintiff’s reliance on the tort of conversion, is an impermissible departure from the pleadings and should be rejected for violating the settled principle that parties are bound by their pleadings affirmed by the Court of Appeal in the case of Independent Electoral and Boundaries Commission & another v Mule & 3 others [2014] KECA 890 (KLR). He further submitted that under Order 2 Rules 4 &10 of the Civil Procedure Rules, a tort such as conversion must be specifically and particularly pleaded, which the plaintiff failed to do, as the Amended Plaint contains no reference or particulars of conversion. 69. He cited the Court of Appeal cases of DT Dobie & Co (Kenya) Ltd v Muchina & another [1980] KECA 3 (KLR) and Atogo v Agricultural Finance Corporation [1991] KECA 11 (KLR) and argued that even if entertained, the claim fails substantively because conversion applies only to tangible property, not contractual rights or debts. https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/4264/eng@2026-02-26 9
page 9 of 18
70. On promissory estoppel, the Defendant cited the Court of Appeal case of Mjengo Limited v Menengai Oil Refineries Limited (supra) and contended that the Plaintiff failed to establish any clear and unequivocal promise that it would be treated as a consortium partner or entitled to a share of the contract sum. The Defendant referred to the Court of Appeal case of Nguruman Limited v Jan Bonde Nielsen & 2 others [2014] KECA 606 (KLR) and argued that interlocutory observations by Hon. P.J. Otieno J. did not conclusively determine the existence of a consortium, as findings at the interlocutory stage are provisional. 71. The Defendant maintained that the tender documents disclosed a joint venture between the Defendant and DY Engineering but no consortium with the Plaintiff, and the Plaintiff, acting under a Power of Attorney in preparing the tender documents, was fully aware of this. He asserted that estoppel cannot arise where the promisee knew or ought to have known the true facts. 72. Regarding illegality, the Defendant submitted that the Plaintiff misconceived the concept by equating breach of a contractual clause with illegality. Illegality arises from contravention of statute, common law, or public policy, as explained by the Court of Appeal in the case of Kenya Airways Limited v Satwant Singh Flora [2013] KECA 545 (KLR). 73. It argued that the plaintiff has identified no statutory or public policy violation rendering the subconsultancy agreement void. At most, failure to obtain KPA approval would amount to a breach of the consultancy agreement enforceable only by KPA, which never objected to or challenged the said agreement. Consequently, the Defendant asserted that the Plaintiff’s illegality argument is untenable. 74. In the end, the Defendant submitted that the Plaintiff is not entitled to any of the reliefs sought. Declaratory reliefs premised on the consultancy agreement are barred by privity, the request to void the agreement and termination notice is unsupported by proof of duress, and the claim for special damages under a contract the Plaintiff simultaneously seeks to repudiate, offends the principle against approbation and reprobation. 75. The Defendant further submitted that the plaintiff’s claim for Kshs. 413,900,005/= as the “local component” misconceives Section 157(9) of the Public Procurement and Asset Disposal Act, which concerns sourcing of local goods and services, not automatic payment of funds to a single local consultant. Additionally, claims for damages for plagiarism equally fail for lack of proof of loss, consistent with the principle in the case of Macmillan Kenya (Publishers) Limited v Mount Kenya Sundries Limited, [2024] KEHC3680 (KLR) which requires damages to be tied to demonstrable loss such as diminished sales or profits. Analysis 76. I have considered and analyzed the evidence above in line with the pleadings filed, together with the written submissions by Counsel for the parties. The issues that arise for determination are – i. Whether the Plaintiff and the Defendant bid as a consortium or whether the Plaintiff was merely a sub-consultant; ii. Whether the Plaintiff has privity of contract with Kenya Ports Authority so as to enforce rights arising from the consultancy agreement dated 29th November 2013 and whether Section 157(9) of the Public Procurement and Asset Disposal Act conferred upon the Plaintiff any direct entitlement to the “local component”; iii. Whether the sub-consultancy agreement dated 18th August 2017 is valid, lawful, and enforceable; https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/4264/eng@2026-02-26 10
page 10 of 18
iv. Whether the Defendant lawfully terminated the sub-consultancy agreement and whether the Plaintiff substantially performed its contractual obligations under the agreement; v. Whether the Plaintiff is entitled to any outstanding payments, including the claimed sum of Kshs. 413,900,005/=, or whether its entitlement, if any, is limited to the sums stipulated under the sub-consultancy agreement; vi. Whether the Plaintiff’s claim founded on the tort of conversion is properly pleaded and sustainable in law; vii. Whether the doctrine of promissory estoppel is applicable in this case; viii. Whether the Plaintiff proved infringement of intellectual property rights; ix. Whether the Plaintiff’s allegations of illegality render the sub-consultancy agreement void ab initio, or whether any alleged non-compliance amounts only to a contractual breach enforceable, if at all, by Kenya Ports Authority; and x. Whether the Defendant is entitled to the reliefs sought in the Counterclaim. Whether the plaintiff and the defendant bid as a consortium or whether the plaintiff was merely a sub-consultant. 77. The Plaintiff’s case is that it participated as part of a consortium and constituted the local component required by law, while the Defendant insists the bid was a joint venture between it and DY Engineering, with the Plaintiff engaged only as a sub-consultant. 78. It is manifest from the evidence adduced that the Plaintiff’s involvement was not peripheral or incidental. The Plaintiff’s logo, professional credentials, curricula vitae, and technical input formed part of the bid documents submitted to Kenya Ports Authority. Furthermore, the Plaintiff in an email sent to the Defendant on 25th October 2012 produced as Plaintiff exhibit No. 5 informed the Defendant the position and understanding that their participation in the bid for the subject tender was as a consortium hence why they withdrew their bid and focused their energy in supporting the Defendant’s bid. 79. This evidence was neither denied nor controverted by the Defendant and/or its witness and was followed by the letter of association dated 20th November 2012, produced as Plaintiff exhibit No. 6 which the Defendant does not deny formed part of the bid documentation for the subject tender, expressly associated the Plaintiff with the tender. 80. Additionally, the Defendant’s own witness conceded that the Plaintiff was the only local firm involved in the bid and that the tender documentation reflected compliance with the statutory local participation requirement. Upon perusal on the tender award dated 31st January 2013 produced by the Plaintiff as Plaintiff exhibit No. 14, it is manifest that the tender award expressly distinguished between a local component and a foreign component, allocating Kshs. 413,900,005/= to the former. 81. This Court opines that the said distinction would be meaningless if the plaintiff’s role was limited to post-award sub-consultancy. In the circumstances, this Court is persuaded that the Plaintiff’s participation went to the heart of tender eligibility and responsiveness, rather than being a later commercial convenience. 82. This Court notes that while it is true that no formal consortium agreement was executed, public procurement practice does not elevate form over substance. What matters is how the bid was https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/4264/eng@2026-02-26 11
page 11 of 18
structured, evaluated, and awarded. On the evidence adduced before this Court, the Court finds that the Plaintiff and Defendant participated in the tender as a consortium in substance, with the Plaintiff constituting the local component, and not merely as a sub-consultant engaged after award. Whether the plaintiff has privity of contract with Kenya Ports Authority so as to enforce rights arising from the consultancy agreement dated 29th November 2013 and whether Section 157(9) of the Public Procurement and Asset Disposal Act conferred upon the plaintiff any direct entitlement to the “local component”. 83. The Defendant’s principal defence rests on privity of contract. There is no dispute that the consultancy agreement dated 29th November 2013 was executed between KPA and the Defendant as lead consultant. It is however now well settled that privity is not an inflexible doctrine and must be examined in context. Section 157(9) of the Public Procurement and Asset Disposal Act states that – “ For the purpose of ensuring sustainable promotion of local industry, a procuring entity shall have in its tender documents a mandatory requirement as preliminary evaluation criteria for all foreign tenderers participating in international tenders to source at least forty percent of their supplies from citizen contractors prior to submitting a tender.” 84. It is now trite law that the provisions of Section 157(9) of the Public Procurement and Asset Disposal Act are not read in isolation but together with Article 227 of the Constitution and Part XII of the PPADA. Upon examination of the aforesaid provisions, this Court is of the considered view that they are not merely procedural but substantive. Its purpose is to ensure meaningful participation and benefit of local firms in public procurement. 85. Accordingly, this Court rejects the Defendant’s narrow construction that the local component refers merely to taxes, reimbursable, and miscellaneous expenses, as such an interpretation would defeat both the text and purpose of the statute. Taxes are payable regardless of the nationality of the contractor and cannot, by any rational construction, constitute “local participation”. 86. It is now well settled that the mischief the provisions of Section 157(9) of the Public Procurement and Asset Disposal Act read together with Article 227 of the Constitution and Part XII of the PPADA sought to cure was exclusion of local enterprises from large public projects, not their inclusion in name only. Upon perusal of the evidence adduced by the parties herein, it is clear that it demonstrates that the Plaintiff was the identified local entity through which the statutory requirement under Section 157(9) of the Public Procurement and Asset Disposal Act was satisfied and the defendant benefitted from that representation to secure the award. Having done so, this Court is persuaded that the defendant cannot now retreat behind privity to deny the Plaintiff the very benefit that made the bid compliant. 87. Accordingly, this Court finds that while the Plaintiff was not a signatory to the main consultancy agreement, it has sufficient legal nexus arising from statute, tender documentation, and conduct of the parties to enforce its entitlement to the local component. Whether the sub-consultancy agreement dated 18th August 2017 is valid, lawful, and enforceable. 88. The Plaintiff challenges the sub-consultancy agreement on grounds of coercion, economic duress, illegality, and contravention of procurement law. In the case of LTI Kisii Safari Inns Ltd & 2 others v Deutsche Investitions-Und Enwicklungsgellschaft (‘Deg’) & others (supra) cited by the Defendant, https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/4264/eng@2026-02-26 12
page 12 of 18
the Court of Appeal listed the necessary factors to prove a claim of economic duress and/or coercion as follows – The relevant factors in determining whether economic duress has been established include whether the victim protested, whether there existed an effective alternative remedy, the availability of independent advice, the benefit received and the speed with which the victim sought to avoid the contract (see Pao on –Vs- Lau Yiu [1979] .3 ALL ER 65 p. 78, 79). 89. It is not in contest that the sub-consultancy agreement was executed more than four years after the tender award, long after substantive works had commenced, and after the Plaintiff had already rendered services in reliance on its role under the tender. 90. On perusal of the evidence adduced by the Plaintiff, it is evident that Plaintiff exhibit No. 16 comprises of protest letters from the Plaintiff to the Defendant and the Kenya Ports Authority, seeking to reconfirm the Plaintiff’s status as joint partners/consultants, ranging from 10th February 2014 with the last letter dated 19th May 2017 approximately three months before the date of the sub-consultancy agreement. From the said letters, it is manifest that the Plaintiff was experiencing issues with the Defendant with respect to its position and participation in the subject tender. 91. On perusal of the terms under the sub-consultancy agreement, it is evident that it drastically altered the Plaintiff’s scope, stripped it of exclusivity, and reduced its entitlement from hundreds of millions to Kshs. 18 million. This in my view, was not a mere commercial renegotiation but a fundamental reconfiguration of the tender structure. 92. Upon perusal of Clauses 3.5 & 4.2 of the main consultancy agreement dated 29th November 2013 produced by the Defendant as Defence exhibit No. 15 it is evident that it required prior written approval of the Kenya Ports Authority for subcontracting or changes affecting key personnel. 93. Further, it is not disputed that the Defendant neither alleged nor demonstrated seeking and getting such approval. The Defendant’s assertion that the said approval existed but was not tendered cannot suffice. Illegality, once raised, shifts the evidentiary burden to the party asserting legality. Accordingly, this Court finds that the Defendant failed to discharge its burden of proving that it sought approval from the Kenya Ports Authority to enter into a sub-consultancy agreement with the plaintiff as enshrined under the provisions of Sections 107, 108 & 109 of the Evidence Act. 94. In view of the foregoing, this Court finds that the sub-consultancy agreement dated 18th August 2017 was inconsistent with the tender award, undermined statutory local participation requirements, and was introduced to regularize a situation that had already departed from the procurement framework. To that extent, the agreement is tainted by illegality and cannot be enforced to defeat rights arising from the tender. Whether the defendant lawfully terminated the sub-consultancy agreement and whether the plaintiff substantially performed its contractual obligations under the agreement. 95. The Defendant’s justification for termination of the sub-consultancy agreement rests on the Plaintiff’s failure to submit editable CAD drawings. The Plaintiff does not deny withholding such drawings but explains that this was due to non-payment, intellectual property concerns, and fear of exclusion from supervision works. 96. This Court opines that the obligation to submit CAD drawings cannot be viewed in isolation, payment and performance are reciprocal obligations. Since the Defendant does not dispute withholding substantial sums under the sub-consultancy agreement while simultaneously demanding deliverables https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/4264/eng@2026-02-26 13
page 13 of 18
that would permanently divest the Plaintiff of control over its work, the Court is persuaded that the Plaintiff’s withholding of editable files was not unreasonable. 97. In addition to the foregoing, this Court is persuaded that termination founded on an agreement the Court has already found to be illegal, cannot stand. In the circumstances, the Court is persuaded that the termination notice dated 4th May 2019 is wrongful and unlawful. Whether the plaintiff is entitled to any outstanding payments, including the claimed sum of Kshs. 413,900,005/=, or whether its entitlement, if any, is limited to the sums stipulated under the sub-consultancy agreement. 98. The Defendant argued that the sum of Kshs. 413,900,005/=, claimed by the Plaintiff is in the nature of a special damage. It is trite law that special damages must be specifically pleaded and strictly proved. The Plaintiff’s witness on cross-examination confirmed that they did not plead special damages in the sum of Kshs. 413,900,005/=. The Defendant’s position is that since this sum was not specifically pleaded, the Plaintiff is not entitled to it. 99. It is however noteworthy from the pleadings filed by the Plaintiff that it is claiming the sum of Kshs. 413,900,005/= in its capacity as the local component in the subject tender, which was expressly provided for in the tender award letter dated 31st January 2013. I am therefore persuaded that the sum claimed is not pleaded as special damages for loss, but as a liquidated entitlement arising from the tender award and statutory local component. 100. From the evidence adduced by the parties herein, it is demonstrably manifest that the Plaintiff substantially performed its obligations through design review, preparation of detailed designs, site attendance, and supervision. Further, the Defendant’s witness acknowledged that the project was completed satisfactorily, without the inclusion or participation of a different local component, a fact that strongly corroborates performance. 101. In the circumstances, this Court is satisfied that the Defendant could not plausibly have delivered the project without the Plaintiff’s technical input and expertise. Having found that the Plaintiff constituted the local component under the tender and that the local component was valued at Kshs. 413,900,005/=, this Court finds that the Plaintiff is entitled to payment of Kshs. 413,900,005/=, less any sums already paid. The Defendant’s attempt to limit entitlement to Kshs. 18 million under the sub-consultancy agreement therefore fails. Whether the plaintiff’s claim founded on the tort of conversion is properly pleaded and sustainable in law. 102. The tort of conversion was defined by the Supreme Court of Canada in the case of Boma Manufacturing Ltd v Canadian Imperial Bank of Commerce, 1996 CanLII 149 (SCC), cited by the Court in the case of Impulse Developers Company Limited v Barkat Developers Limited & 6 others [2023] KEHC 24302 (KLR) as hereunder – The tort of conversion involves a wrongful interference with the goods of another, such as taking, using or destroying these goods in a manner inconsistent with the owner's right of possession. The tort is one of strict liability, and accordingly, it is no defence that the https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/4264/eng@2026-02-26 14
page 14 of 18
wrongful act was committed in all innocence. Diplock L.J. asserted this principle in Marfani & Co. v. Midland Bank, Ltd., [1968] 2 All E.R. 573, at pp. 577-78: ‘... the moral concept of fault in the sense of either knowledge by the doer of an act that is likely to cause injury, loss or damage to another, or lack of reasonable care to avoid causing injury, loss or damage to another, plays no part …’ If the customer is not entitled to the cheque which he delivers to his banker for collection, the banker, however, innocent and careful he might have been, would at common law be liable to the true owner of the cheque for the amount of which he receives payment, either as damages for conversion or under the cognate cause of action, based historically on assumpsit, for money had and received.” The fact that liability for the tort of conversion is strict suggests that the respondent's submission that the appellants were contributorily negligent must fail. The matter was raised before the Court of Appeal, and was dismissed without reasons. While this argument would be available in an action for negligence, the notion of strict liability involved in an action for conversion is prima facie antithetical to the concept of contributory negligence. 103. The Plaintiff framed part of its grievance as conversion. Strictly speaking, conversion traditionally applies to tangible property. However, modern jurisprudence recognizes that wrongful deprivation of property or funds held for another may ground relief even if the label is imperfect. That said, this Court finds that the Plaintiff’s entitlement is sufficiently vindicated in contract and equity. The failure to remit funds earmarked for the local component constitutes wrongful withholding. Whether termed as conversion or breach, the substance of the wrong is established. Whether the doctrine of promissory estoppel is applicable in this case. 104. It is trite that promissory estoppel arises where a party, through words or conduct, makes a clear and unequivocal representation or assurance intended to affect the legal relationship between the parties and to be relied upon. Once the other party relies on that representation and acts upon it, the maker of the promise is precluded from resiling from it and reverting to the former legal position as though no such representation had been made. 105. In the case of Central London Property Trust Ltd v High Trees House Ltd [1947] KB 130 cited by the Court of Appeal in Mjengo Limited v Menengai Oil Refineries Limited [2025] KECA 85 (KLR) Justice Denning (as he then was) summed up the applicable principles in cases of promissory estoppel in the following words …a promise was made which was intended to create legal relations and which, to the knowledge of the person making the promise, was going to be acted on by the person to whom it was made and which was in fact so acted on. 106. In this case, it is evident from the evidence adduced that the Defendant made a clear representation that the plaintiff was part of the bid and would constitute the local component. In the premises, I am persuaded that the Defendant knew the Plaintiff would rely on that representation and evidently from the pleadings filed and evidence adduced, more specifically the letter of association dated 20th November 2012 produced as Plaintiff exhibit No. 6, the Plaintiff did so by committing resources and foregoing other opportunities. 107. Accordingly, this Court is persuaded that the elements of promissory estoppel are present in the circumstances of this case. Therefore, it would be inequitable to permit the Defendant to resile from that position after securing the tender. https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/4264/eng@2026-02-26 15
page 15 of 18
108. In light of the foregoing, this Court finds that the Defendant is estopped from denying the consortium relationship between it and the Plaintiff and the Plaintiff’s entitlement to the sum of Kshs. 413,900,005/= provided for in the subject tender award for the local component. Whether the plaintiff proved infringement of intellectual property rights. 109. The Plaintiff alleged misuse and plagiarism of its designs. While it is not disputed that ownership of the underlying port master designs may vest in Kenya Ports Authority as the procuring entity, the evidence before the Court demonstrates that the Plaintiff was responsible for the preparation of original derivative architectural works, including detailed building designs, layouts, and design adaptations produced in the course of performing the consultancy services. 110. These derivative works involved the exercise of skill, judgment, and creative input distinct from the original port designs, and therefore qualify for protection as original works under the Copyright Act. From the record, it is evident that the defendant did not controvert the plaintiff’s evidence that such works were prepared by the plaintiff, nor did it satisfactorily rebut the assertion that the designs continued to be used after the plaintiff’s exclusion from the project. 111. It is trite law that copyright protection subsists automatically upon the creation of an original work and does not depend on registration or licensing. Unlike industrial property rights such as patents or trademarks, copyright arises by operation of law once originality and authorship are established. Accordingly, a claimant claiming infringement of its copyright, is not required to prove registration of the work, but must demonstrate authorship, originality, and unauthorized use. 112. In this case, the Plaintiff adduced evidence showing that it authored the architectural drawings and design adaptations, that the Defendant had access to and possession of those works, and that the works were used in furtherance of the project without its consent following its exclusion. This Court is persuaded that this evidentiary threshold is sufficient to establish infringement. 113. In light of the above, I am persuaded that the Plaintiff proved infringement of its intellectual property rights. 114. However, this Court is mindful that damages for infringement must be compensatory rather than punitive. The Plaintiff must demonstrate a rational basis for quantification of loss, such as loss of fees, loss of opportunity, or unjust enrichment attributable to the unauthorized use. In this case, while the Plaintiff established infringement sufficient to warrant relief, the assessment of damages must be reasonable, proportionate, and anchored in evidence, taking into account the nature of the works, the extent of use, and the surrounding contractual context. 115. Having found that the Plaintiff is entitled to the to the sum of Kshs. 413,900,005/= provided for in the subject tender award for the local component, I am not persuaded that the Plaintiff has made a case for entitlement to further damages for infringement of its intellectual property right by the defendant, since payment of the sum provided for in the subject tender suffices as compensation for use of the Plaintiff’s impugned intellectual property. Whether the plaintiff ’s allegations of illegality render the sub-consultancy agreement void ab initio, or whether any alleged non-compliance amounts only to a contractual breach enforceable, if at all, by Kenya Ports Authority. 116. The Plaintiff’s plea of illegality is not founded on a mere allegation of breach of contract but on a more fundamental challenge grounded in statutory non-compliance and constitutional values governing public procurement. Public procurement in Kenya is not a purely private commercial arrangement, https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/4264/eng@2026-02-26 16
page 16 of 18
it is a constitutionally regulated process anchored in Article 227 of the Constitution and implemented through the Public Procurement and Asset Disposal Act. Once a tender is awarded on the basis of defined eligibility criteria, including mandatory local participation, those conditions go to the legality of the award itself and cannot be altered at the whim of contracting parties without undermining the procurement framework. 117. The evidence before the Court shows that the Plaintiff’s participation as the local component was a material consideration in meeting the statutory and tender requirements at the time of the award. The subsequent restructuring of the Plaintiff’s role after award, through the introduction of a subconsultancy agreement that radically reduced its scope, removed exclusivity, and effectively divested it of the benefit of the local component, amounted to a substantive variation of the tender terms. 118. Such post-award restructuring had the effect of defeating the statutory objective of promoting meaningful local participation and converting what was intended to be a protected local benefit into a nominal or illusory arrangement. 119. Public policy does not permit parties to achieve indirectly, through private agreements, what the law prohibits directly. Therefore, to allow the Defendant to rely on a post-award private contract to negate the very condition that rendered the tender compliant would be to sanction a circumvention of procurement laws. Courts have consistently held that contracts or arrangements that undermine statutory procurement safeguards are void to the extent of their inconsistency, regardless of the parties’ consent or subsequent performance. 120. This Court therefore finds that the impugned restructuring was not a lawful commercial adjustment, but a departure from the procurement framework under which the tender was awarded. Such illegality goes to the root of the transaction and offends public policy. It therefore follows that the Defendant cannot sanitize or legitimize that conduct by invoking freedom of contract, as that principle yield where a contract or arrangement is inconsistent with statute or the Constitution. Whether the defendant is entitled to the reliefs sought in the Counterclaim. 121. The Defendant’s Counter Claim is wholly anchored on the validity of the sub-consultancy agreement and the alleged breach thereof. Having found that the sub-consultancy agreement is unenforceable and the termination unlawful, the counterclaim automatically fails and/or collapses. 122. The upshot is that the Plaintiff’s suit against the Defendant is merited. The Defendant’s Counter Claim is dismissed. 123. Section 27 of the Civil Procedure Act provides that costs follow the event, therefore the Plaintiff having succeeded in this suit is awarded costs of the suit in the main suit and in the Counter Claim. 124. Before making the final conclusion, I take this opportunity to express my gratitude to all the counsels for their eloquence and well researched submissions, which had an invaluable assistance to this court in reaching a just determination of the dispute. Determination 125. In the circumstance this court makes the following orders – i. A declaration is hereby issued that the Plaintiff was a consortium partner and constituted the local component in Tender No. KPA/057/2012-13/MD; ii. A declaration is issued that the sub-consultancy agreement dated 18th August 2017 and the termination notice dated 4th May 2019 are null and void; https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/4264/eng@2026-02-26 17
page 17 of 18
iii. Judgment is entered for the Plaintiff for payment of Kshs. 413,900,005/=, less any sums already paid, together with interest at Court rates from the date of filing suit until payment in full; iv. The Defendant’s Counter Claim is dismissed; and v. Costs of the suit and the Counter Claim are hereby awarded to the Plaintiff. Orders accordingly. DATED AND DELIVERED VIRTUALLY AT MOMBASA ON THIS 26TH DAY OF FEBRUARY, 2026. …………………………… HON. F. WANGARI JUDGE OF THE HIGH COURT In the presence of; Mr. Teddy Ochieng Advocate for the Plaintiff Ms. Brenda Oganyo h/b for Mr. Makone Advocate for the Defendant Ms. Salwa, Court Assistant https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/4264/eng@2026-02-26 18
page 18 of 18