Nairobi, Kenya.
The Court of Appeal in Kenya has delivered a significant breakthrough for businesses entangled in contract disputes arising from the COVID-19 pandemic. This decision establishes a legal precedent, offering respite to companies affected by unforeseen circumstances that were beyond their control. Among the beneficiaries is Jomo Kenyatta University of Agriculture and Technology (JKUAT), which has been spared from paying a substantial sum to its former landlord after the closure of its Nakuru campus due to the pandemic.
The Court of Appeal, comprising a panel of three judges, reached a unanimous decision in favor of JKUAT, affirming that the closure of their Nakuru campus was an unanticipated and unavoidable consequence of the pandemic.
JKUAT had contested a prior ruling that had ordered them to pay Kwanza Estates over 70 million Kenyan shillings. This sum was accompanied by an additional 40 million shillings for renovation costs, as a result of breaching a lease contract. The university had cited financial challenges and a decline in self-sponsored students as the reasons behind the campus closure, thus leading to the breach of the agreement.
The court acknowledged the COVID-19 pandemic as a force majeure event—a circumstance beyond the control of the parties involved, hindering the fulfillment of contractual obligations. It recognized that the government-imposed lockdown measures had impacted all institutions, including JKUAT. Consequently, the court deemed it unreasonable and unjust to impose the burden of fulfilling the lease agreement on the university in light of these unforeseen circumstances.
