P. Mulwa, J. v Healthy Limited & 2 others

HCCOMM NO. E090 OF 2023 P. MULWA, J. from the 1st Defendant at a contract price of USD 180,000. The 1st Defendant introduced the 2nd Defendant as its authorized supplier and instructed that all payments be made directly to the 2nd Defendant. On June 1, 2020, the 2nd Defendant issued an invoice demanding a 45% advance of the total purchase price, with the remaining balance payable before shipment. 3. The Plaintiff states that it transferred USD 81,000 to the 2 nd Defendant on June 2, 2020, and later received an Airway Bill from the 2nd Defendant, purportedly issued by the 3 rd Defendant, showing the shipment was scheduled for Mumbai, India. Based on the Airway Bill and its verification on the 3 rd Defendant's website, the Plaintiff paid the remaining USD 99,000 on June 11, 2020, completing the full payment. The 1 st Defendant breached the contract by failing to deliver the goods or refund the payment, while the 2 nd Defendant failed to ensure their delivery. 4. The Plaintiff contend that despite the receipt of the full purchase price, the Defendants failed to deliver the masks or refund the purchase price prompting the Plaintiff to lodge complaints at Mumbai, India. The Plaintiff has suffered substantial financial damage, diminished liquidity, and currency-related losses. The Plaintiff attributes liability jointly and severally to the Defendants. 5. The Defendants failed to enter appearance or file their defence within the stipulated timelines, and default judgment was entered on 8th August 2023. Page 2 of 9

page 2 of 9

HCCOMM NO. E090 OF 2023 P. MULWA, J. 6. The matter proceeded for formal proof. Tarun Vig a partner of the Plaintiff company, testified as Pw1. He adopted his witness statement dated 27th February 2023 and a list of documents filed on 27th February 2023. He confirmed the averments in the Plaint. 7. The Plaintiff thereafter filed written submissions dated 21 st April 2026. 8. The Plaintiff argues that a binding contract was concluded when it offered to purchase 100,000 units of 3M N95 masks from the 1st Defendant at USD 1.8 per unit. The 2nd Defendant, acting as the 1st Defendant's appointed agent, accepted the offer by issuing an invoice, and the Plaintiff furnished consideration by paying the agreed purchase price of USD 180,000. It submits that all essential elements of a valid contract, offer, acceptance and consideration, were satisfied. It relied on Charles Mwirigi Miriti v Thananga Tea Growers SACCO Ltd & Another [2014] eKLR, Tanathi Water Services Board v Pasha Enterprises Ltd [2020] eKLR, and Fidelity Commercial Bank Ltd v Kenya Grange Vehicle Industries Ltd [2017] eKLR. 9. The Plaintiff submits that it specifically proved its claim for USD 180,000 as special damages. It further argues that the Defendants' oppressive and fraudulent conduct justifies an award of general and exemplary damages for the reputational loss, liquidity challenges and financial harm occasioned by the breach. The Plaintiff therefore urges the court to enter judgment for the pleaded sums together with Page 3 of 9

page 3 of 9

HCCOMM NO. E090 OF 2023 P. MULWA, J. interest and costs. Among other authorities, it relies on Gideon Mutiso Mutua v Mega Wealth International Ltd [2012] eKLR, Hadley v Baxendale, and Consolata Anyango Auma v South Nyanza Sugar Co. Ltd [2015] eKLR. Analysis and determination 10. I have carefully considered the Plaintiff's pleadings, the evidence adduced during formal proof, and the written submissions. The issues for determination are as follows: i. Whether there existed a binding contract between the Plaintiff and the Defendants. ii. Whether the Defendants breached the contract. iii. Whether the Plaintiff is entitled to the reliefs sought. Whether there existed a binding contract 11. The Plaintiff contends that a binding contract was concluded when it offered to purchase 100,000 units of 3M N95 8210 masks from the 1st Defendant at a contract price of USD 180,000, the 2nd Defendant, acting as the 1st Defendant's appointed agent, accepted the offer by issuing an invoice, and the Plaintiff furnished consideration by paying the agreed purchase price in full. 12. It is trite law that a valid contract requires offer, acceptance, consideration and an intention to create legal relations. In Charles Mwirigi Miriti v Thananga Tea Growers SACCO Ltd & Another [2014] eKLR, the Court of Page 4 of 9

page 4 of 9

HCCOMM NO. E090 OF 2023 P. MULWA, J. Appeal held that a valid contract is founded upon offer, acceptance and consideration. 13. In the present case, I find that the essential elements of a valid contract were satisfied. The Plaintiff made a definite offer to purchase the masks at USD 1.8 per unit. The 2 nd Defendant, on behalf of the 1 st Defendant, issued an invoice on 1st June 2020 which constituted an unequivocal acceptance of that offer. The Plaintiff provided consideration by remitting USD 81,000 on 2 nd June 2020 as a 45% advance payment and subsequently paying the balance of USD 99,000 on 11th June 2020, thereby settling the entire purchase price of USD 180,000. The parties' conduct clearly demonstrated a meeting of the minds and mutual assent to the contractual terms. 14. I am therefore satisfied that a valid and binding contract was concluded between the Plaintiff and the 1st Defendant. Whether the Defendants breached the contract 15. The Plaintiff paid the full purchase price of USD 180,000 in two instalments: USD 81,000 on 2 nd June 2020 and USD 99,000 on 11th June 2020. In return, the Defendants were obligated to deliver 100,000 units of 3M N95 8210 masks to the Plaintiff in Mumbai, India. The 2nd Defendant issued an Airway Bill allegedly by the 3rd Defendant, indicating that the consignment had been scheduled for shipment. The Plaintiff relied on the Airway Bill and its verification on the 3 rd Defendant's website in making the balance payment. Page 5 of 9

page 5 of 9

HCCOMM NO. E090 OF 2023 16. P. MULWA, J. The evidence before the court establishes a clear and fundamental breach of contract by the 1 st and 2nd Defendants. Having accepted payment, they were obliged either to deliver the contracted goods or refund the purchase price. They did neither. 17. Conversely, although the Plaintiff alleges misrepresentation by the 3rd Defendant, no evidence was tendered to prove that the Airway Bill was false, forged or improperly issued by the 3 rd Defendant, or that the 3 rd Defendant participated in the contractual arrangements between the Plaintiff and the 1st and 2nd Defendants. The mere failure by the 3rd Defendant to enter appearance does not relieve the Plaintiff of the burden of proving the pleaded allegations against it. I therefore find that liability has been established only against the 1st and 2nd Defendants. Whether the Plaintiff is entitled to the reliefs sought 18. The Plaintiff seeks the sum of USD 180,000 as special damages, general and punitive damages for unjust enrichment, costs of the suit, and interest. The claim of USD 180,000 is a liquidated claim. 19. The Plaintiff has adduced evidence of the remittances made of USD 81,000 made on 2nd June 2020 followed by USD 99,000, made on 11th June 2020. The law requires that special damages must be specifically pleaded and strictly proved (See Hahn v Singh [1985] KLR 716). Page 6 of 9

page 6 of 9

HCCOMM NO. E090 OF 2023 20. P. MULWA, J. The Plaintiff has satisfied this requirement. I therefore find that the Plaintiff has proved its claim for USD 180,000 to the required standard. 21. The Plaintiff also seeks general and punitive damages. The general principle is that general damages are not awardable for breach of contract, and are only awarded in exceptional circumstances. The object of damages for breach of contract is compensatory and is intended to place the innocent party in the position it would have occupied had the contract been performed - See Kenya Tourism Development Corporation v Sundowner Lodge Ltd [2018] eKLR. 22. Although the conduct of the 1st and 2nd Defendants was plainly dishonest and commercially unacceptable, the Plaintiff's loss is fully compensable through recovery of the purchase price together with interest. The Plaintiff did not lead sufficient evidence to justify departure from the settled principle that general damages are ordinarily unavailable for breach of contract, nor did it establish circumstances warranting an award of exemplary damages. 23. Accordingly, the prayers for general and punitive damages fail. 24. On the issue of interest, Section 26(1) of the Civil Procedure Act provides that: Page 7 of 9

page 7 of 9

HCCOMM NO. E090 OF 2023 P. MULWA, J. Where and in so far as a decree is for the payment of money, the court may, in the decree, order interest at such rate as the court deems reasonable to be paid on the principal sum adjudged from the date of the suit to the date of the decree in addition to any interest adjudged on such principal sum for any period before the institution of the suit, with further interest at such rate as the court deems reasonable on the aggregate sum so adjudged from the date of the decree to the date of payment or to such earlier date as the court thinks fit. 25. I accordingly order that interest on the principal sum of USD 180,000 shall accrue at court rates from the date of filing suit, being 27th February 2023, until payment in full. 26. On costs, Section 27(1) of the Civil Procedure Act provides that costs follow the event. The Plaintiff has been successful in its claim. I therefore award costs of the suit to the Plaintiff, to be taxed or agreed upon. 27. In the result, judgment is entered against the 1st and 2nd Defendants jointly and severally, and the suit against the 3rd Defendant is dismissed. I make the following orders: i. Judgment is entered for the Plaintiff against the 1st and 2nd Defendants jointly and severally in the sum of USD 180,000. Page 8 of 9

page 8 of 9

HCCOMM NO. E090 OF 2023 ii. P. MULWA, J. The said sum shall attract interest at court rates from the date of filing the suit until payment in full. iii. The Plaintiff's claims for general damages and punitive damages are declined. iv. The Plaintiff shall have the costs of the suit as against the 1st and 2nd Defendants. It is so ordered. JUDGMENT delivered virtually, dated and signed at NAIROBI This 13th day of August 2026. PETER M. MULWA JUDGE In the presence of: Mr. Muya for Plaintiff Court Assistant: Sharon Page 9 of 9

page 9 of 9