Court Orders JKUAT to Pay Sh53.8 million After Nakuru Campus Closure

Court Orders JKUAT to Pay Sh53.8 million After Nakuru Campus Closure.

Jomo Kenyatta University of Agriculture and Technology (JKUAT) has been directed to pay Kwanza Estates Limited three months’ rent and renovation costs amounting to Sh53.8 million after shutting down its Nakuru Campus in January 2021. The Supreme Court upheld the payment following a dispute over breach of contract.

The Supreme Court ruled in favor of Kwanza Estates, awarding the company three months’ rent of Sh13.8 million and reaffirming an earlier Sh40 million payment for renovation costs. The case was presided over by a five-judge bench led by Justice Mohamed Ibrahim.

The judges determined that a breach of contract occurred when JKUAT terminated the lease 14 months before its expiry. They noted that where parties disengage without mutual agreement, such actions amount to a breach.

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However, they clarified that compelling a tenant to stay in premises they no longer wish to occupy would be unconscionable, and the remedy should involve rent due up to the date of vacating and damages for the breach.

Court Orders JKUAT to Pay Sh53.8 million After Nakuru Campus Closure

Case Background

The dispute began when JKUAT closed its Nakuru Campus in January 2021, citing declining student enrolment and financial constraints caused by the Covid-19 pandemic.

Lease Agreement: JKUAT had leased the premises from Kwanza Estates in 2016 for six years.
Reasons for Closure:
1. Reduced student enrolment.
2. Financial struggles stemming from reduced government support.
3. Severe losses incurred by the campus.
Landlord’s Claim: Kwanza Estates, a firm linked to businessman Geoffrey Asanyo, sued the university for breaching the lease agreement by terminating it prematurely.

Court Journey

High Court Ruling

The High Court initially ordered JKUAT to pay Sh110 million, covering both rent for the unexpired lease term and renovation costs.

Appeal Court Decision

The Court of Appeal revised the amount, directing JKUAT to pay only Sh40 million for renovations. It ruled that the Covid-19 pandemic, being beyond the university’s control, justified the termination.

Supreme Court Verdict

Unhappy with the appellate court’s decision, Kwanza Estates escalated the matter to the Supreme Court. The Supreme Court adjusted the final award to include three months’ rent. After deducting the security deposit of Sh11.3 million, JKUAT was ordered to pay Sh2.45 million in addition to the renovation costs.

Key Takeaways from the Ruling

Court Level	Outcome	Amount Awarded
High Court	Ordered full payment for unexpired lease and costs	Sh110 million
Court of Appeal	Limited payment to renovation costs only	Sh40 million
Supreme Court	Added three months’ rent to prior award	Sh53.8 million (total)

This ruling sets a precedent on lease agreements during unforeseen circumstances like the Covid-19 pandemic. While tenants may not be compelled to pay for the entire lease term after vacating, they remain liable for accrued rent and damages for breach of contract.