Hotelier loses fight for Sh30mn compensation by the KTDC

A hotelier who accused a State corporation of breach of contract after allegedly denying him a loan for the construction of a two-star hotel at Lake Nakuru National Park has failed in his bid to escalate the matter to the Supreme Court.

A bench of three judges of the Court of Appeal rejected the application by Sundowner Lodge Ltd to move the case to the Supreme Court, where it argued the top court should rule on whether general damages are not awardable for breach of contract cases.


The hotelier wanted to move to the Supreme Court after the Appellate court reversed a Sh30 million compensation slapped on Kenya Tourist Development Corporation (KTDC) for alleged breach of contract.

Sundowner Lodge had accused KTDC of unilaterally withdrawing a loan of Sh15 million in 1999, which it intended to construct a two-star hotel at Nakuru Park.

Justices Hannah Okwengu, John Mativo, and Grace Ngenye dismissed the case stating that the jurisdiction of the Supreme Court should not be invoked merely to rectify errors.

“In conclusion, upon evaluating the grounds cited in support of the plea for certification, we find and hold that the applicant has not discharged the burden of satisfying that his intended appeal to the Supreme Court raises matters of general public importance within the meaning of Article 163(4) (b) of the Constitution,” the judges said.

The court further said there was no confusion in the legal practice as the court did not misinterpret previous decisions of the court. The judges added that the general rule, general damages are not awardable for breach of contract except in exceptional circumstances, which have to be justified.

General damages

Supporting the application, Mr Samuel Warugu Kimotho said that the judgment in 2018 will affect the general public because it stated that general damages are not payable for breach of contracts.

He said the decision caused confusion in legal practice and it misinterpreted previous decisions of the Court of Appeal, resulting in conflicting decisions on award of damages in contracts.

The state corporation maintained that the development of Sundowner Lodge at the Lake Nakuru National Park was never approved as required.

Erick Ogola

High Court judge Erick Ogola had awarded Sundowner Lodge Sh30 million for the breach of contract after noting that KTDC withdrew from the deal signed in April 1996 three years later.

Originally published by Business Daily

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