High Court dismisses firm's Sh284.9M suit against Kenya Power

The High Court has dismissed a Sh284.9 million lawsuit filed against Kenya Power by Inter Tropical Timber Trading Ltd after finding that the company, and not the power utility, was responsible for breaching a contract to supply electricity distribution poles.

In a judgment delivered on July 3, Justice Freda Mugambi ruled that the supplier repeatedly failed to meet agreed delivery timelines despite being granted several extensions by Kenya Power.

The dispute stemmed from a 2012 contract under which Inter Tropical Timber Trading Ltd was awarded a tender worth KSh410.6 million to supply 29,500 treated wooden power distribution poles to Kenya Power.

The company argued that Kenya Power breached the agreement by changing delivery locations, suspending deliveries and eventually terminating the contract, leaving it with significant financial losses after investing in treatment plants, trucks, raw materials and staff.

However, the court found that the supplier had accepted the changes to the delivery location in writing, making them valid variations of the contract.

"It follows that the change of delivery destination was a valid, mutually agreed variation and neither party can found a claim for breach on that basis," Justice Mugambi ruled.

The judge further noted that Kenya Power granted the supplier multiple extensions after it repeatedly failed to deliver the outstanding poles within the agreed timelines.

According to the judgment, the supplier continued seeking more time even after previous extensions had expired.

Justice Mugambi found that Kenya Power had afforded the company every reasonable opportunity to fulfil its contractual obligations before eventually terminating the agreement.

"By this point, the Plaintiff had been afforded every reasonable opportunity to fulfil its contractual obligations and had no justifiable basis for any further default," the judge stated.

The court also rejected the company's argument that a later email from Kenya Power suspending deliveries revived the expired contract.

"The Plaintiff cannot, in these circumstances, seek to rely on a general communication addressed to all suppliers as a basis for reviving or extending a contract that had already lapsed through its own failure to perform," the judgment reads.

Inter Tropical Timber Trading Ltd had sought KSh284.9 million in damages, including payment for undelivered poles and compensation for losses allegedly incurred after investing in infrastructure and equipment.

But the court held that payment under the contract was only due upon actual delivery of the poles, while the claimed losses had not been sufficiently proved.