Kooba Kenya Limited v County Government of Mombasa [2022] KEHC 1631 (KLR)

REPUBLIC OF KENYA

IN THE HIGH COURT OF KENYA

AT MOMBASA

CONSTITUTIONAL & HUMAN RIGHTS DIVISION

CONSTITUTIONAL PETITION NO. 12 OF 2017

IN THE MATTER OF: THE ALLEGED CONTRAVENTION OF RIGHTS OF FUNDAMENTAL

FREEDOMS UNDER ARTICLE 47 OF THE CONSTITUTION OF KENYA 2010

AND

IN THE MATTER OF:   THE COUNTY GOVERNMENT ACT 2012

AND

IN THE MATTER OF:  PHYSICAL PLANNING ACT, CHAPTER OF THE LAWS OF KENYA

AND

IN THE MATTER OF:  THE FAIR ADMINISTRATIVE ACTION ACT, 2015

KOOBA KENYA LIMITED.........................................................................................PETITIONER

VERSUS

COUNTY GOVERNMENT OF MOMBASA...........................................................RESPONDENT

JUDGEMENT

Introduction & Background

1. The Petitioner’s case on record is with regard to the construction of data centres which was the original business the Applicant intended to carry out in Mombasa.  A Carrier Neutral Data Colocation Centre, such as the one the Petitioner sought to establish is important to multinationals, content providers, government and bank/financial customers who at present are forced to use centres located in Europe and elsewhere.  The Petitioner having been a pioneer in the development of Data & Internet Infrastructure in East Africa for the last twenty-five (25) years recognized this gap in the market and hence embarked on developing such a facility first in Mombasa with a view to constructing multiple such facilities across the East Africa Region.

2. At the time of developing the project there was only one other competitor likely to build a competing facility.  The industry experts who looked at the project agreed that there was room for two competing data centres.  However, it was viewed that it would be critical that they both started operations at or about the same time.  If one were to start significantly ahead of the other, then they would likely obtain an unassailable competitive advantage.  Based on the agreed construction schedule of the contractors, the Petitioner’s Data Centre would have been ready by end of June 2017.  The competing data centre was scheduled for completion in April 2017 and would have begun operations in August 2017.  This was however, not possible due to delay occasioned by the respondent herein in approving the required ground infrastructure. That failure led to the ruling of this Petition on the 17^th of February 2017, where the petitioner sought the following orders:

i. A Declaration that the Respondent has violated the Petitioner’s rights under Article 47 of the Constitution;

ii. An order compelling the Respondent to stamp and return the Petitioner’s building plans;

iii. An order compelling the Respondent to issue a Certificate of Approval;

iv. An order for compensation for the amount of US$ 1,338,105 with respect to damages incurred;

v. Such other and/or further relief as this Honourable Court may deem fit and just to grant; and

vi. The costs of and occasioned by this Petition be provided for.

3. By a judgment delivered on 13^th April, 2017 this Court inter alia found and held that the Respondent had violated the Petitioner’s rights under Article 47 of the Constitution and made Orders compelling the Respondent to stamp and return the Petitioner’s building plans and to issue a Certificate of Approval.  The court found and held, inter alia:

“...The conduct of the Respondent herein is that of a party who does not care. Its conduct radiates an “I don’t care” attitude which is not good for business, and is indeed a very old business practice.... The prudent thing for the Respondent to do would be to fast track the process so that the intended project can take off as soon as possible and that investors are not unduly delayed from commencing commercial activities and recovering their investments as soon as possible. The Respondent is a government. It should not be seen as encouraging factors which unnecessarily slow down business and frustrate investors when there is no need for such.”

4. In finding in favour of the petitioner, this Court made the Order that

“If need be, the parties to set a date for submissions on damages and compensation.”

5. In this regard parties have filed their respective submissions dated the 18^th of June 2019 for the petitioner and 29^th October 2019 for the respondent, which I have carefully considered.

Determination

6. The only issue is the amount of quantum the petitioner is entitled to.

7. Notably, the petitioner seeks a sum of Kshs 848,574,741 which it submits constitutes sufficient vindication. The Petitioner further seeks a sum of between Kshs 10-20 Million as aggravated/exemplary damages citing the failure of the respondent to obey directions/orders of court; arguing that there was no justification for the respondent’s impugned inaction and the refusal by the respondent to give the petitioner reasons for the inaction even after its advocates issued a demand letter.

8. On the other hand, the respondent submitted that special damages have to be specifically pleaded and strictly proved and taking into account the fact that the Petitioner has failed to strictly prove the actual loss suffered, the court should not grant the Petitioner any damages since the same will amount to unjust enrichment of the Petitioner at the expense of the tax-payers and the residents of Mombasa County. In this regard, the respondent observes that the amount of Kshs 848,574,741 as demanded by the petitioner, is a projection of the present value of future profits purely based on speculative calculations and this Court should not grant the same.

9. Courts have held, rightly so, that an award of compensation against the State is an appropriate and effective remedy for redress of infringement of a fundamental right under the Constitution. See Kisilu Mutua v Republic Petition No. 91 of 2015. It is in this regards that the court in Edward Akong'o Oyugi & 2 others v Attorney General [2019] eKLR, observed that:

“The purpose of public law is not only to civilize public power but also to assure the citizens that they live under a legal system which aims to protect their interests and preserve their rights. Therefore, when the court molds the relief by granting 'compensation' in proceedings under Article 23 of the constitution or seeking enforcement or protection of fundamental rights, it does so under the public law by way of penalizing the wrongdoer and fixing the liability for the public wrong on the State which has failed in its public duty to protect the fundamental rights of the citizen. The payment of compensation in such cases is not to be understood, as it is generally understood in a civil action for damages under the private law but in the broader sense of providing relief by an order of making 'monetary amends' under the public law for the wrong done due to breach of public duty, by not protecting the fundamental rights of the citizen or by subjecting the citizen to acts which amount to infringement of the constitution.”

10. A similar position was established by the Constitutional Court of South Africa in Dendy vs University of Witwatersrand, Johannesburg & Others - [2006] 1 LRC 291 where it held that:

“...The primary purpose of a constitutional remedy was to vindicate guaranteed rights and prevent or deter future infringements. In this context an award of damages was a secondary remedy to be made in only the most appropriate cases.

“…The primary object of constitutional relief was not compensatory but to vindicate the fundamental rights infringement and to deter their future infringement. The test was not what would alleviate the hurt which plaintiff contended for but what was appropriate relief required to protect the rights that had been infringed. Public policy considerations also played a significant role. It was not only the plaintiff's interest, but the interests of society as a whole that ought as far as possible to be served when considering an appropriate remedy.”

11. Flowing from the above, it is clear that courts can award damages where there has been a breach and or infringement of bill of rights. The damages serve as a form of compensation and redress for the violation or infringement of a right. This is because a violation of a constitutional right must of necessity find a remedy in one form or another, including a remedy in the form of compensation in monetary terms. See M W K v another v Attorney General & 3 others [2017] eKLR. The quantum of compensation will, however, depend upon the facts and circumstances of each case. In principle however, such claim is distinct from, and in addition to remedy in private law for damages for tort.

12. As enumerated in the Edward Oyugi case (supra), the award of damages entails exercise of judicial discretion, judicially, and upon reason and principle devoid of vagaries, caprice, whimsies or personal opinion. See Mbogo & Another vs Shah [1968] EA 93.

13. The jurisprudence that has emerged in cases of violation of fundamental rights has undoubtedly cleared the doubts about the nature and scope of this public law remedy. In particular, the Supreme Court of India in Smt. Nilabati Behera Alias Lalit .. vs State Of Orissa And Ors, AIR 1993 SC 1960 laid down the following principles that should be taken into consideration by Courts in awarding compensation for contravention of human rights and fundamental freedoms by State and its agencies:

i. Monetary compensation for violation of fundamental rights is now an acknowledged remedy in public law for enforcement and protection of fundamental rights;

ii. Such claim is distinct from, and in addition to remedy in private law for damages for tort;

iii. This remedy would be available when it is the only practicable mode of redress available;

iv. Against claim for compensation for violation of a fundamental right under the constitution, the defence of Sovereign immunity would be inapplicable.

14. Arriving therefore at the award of damages is not an exact science for no monetary sum can erase, cure or effectively address the indignity and or even loss of business arising from the violations of a particular right(s). The court must therefore in the exercise of this constitutional jurisdiction, be concerned with upholding or vindicating, the constitutional right which has been contravened so that if the person wronged has suffered damage, courts should be inclined to award compensation. Similarly, where in the opinion of court compensation is not needed, a declaration by the court will suffice. In circumstances where the court deems it fit to grant both, it must do so, but judicially and fairly.

15. It is for this reason that the court in M W K v another v Attorney General & 3 Others (Supra), observed that:

“An award of compensation will go some distance towards vindicating the infringed constitutional right. How far it goes will depend on the circumstances, but in principle it may well not suffice. The fact that the right violated was a constitutional right adds an extra dimension to the wrong. An additional award, not necessarily of substantial size, may be needed to reflect the sense of public outrage, emphasize the importance of the constitutional right and the gravity of the breach, and deter further breaches. All these elements have a place in helping the court arrive at a reasonable award. The court must consider and have regard to all the circumstances of the case.”

16. The challenge that this court finds, and which has been acknowledged by this court before and courts of similar status, is the assessment of compensation for an injury or loss that is neither physical and is also not necessarily financial. This presents special problems for the judicial process which aims to produce results objectively justified by evidence, reason and precedent. Subjective feelings of upset, frustration, worry, anxiety, mental distress, fear, grief, anguish, humiliation, unhappiness, stress, depression and so on and the degree of their intensity are incapable of objective proof or of measurement in monetary terms. See MWK & another vs Attorney General (supra).

17. In the instant case, the petitioner seeks a sum of Kshs 848,574,741 and a further 10-20 Million as special damages which it submitted constitutes sufficient vindication. The petitioner argued that the said sum of Kshs 848,574,741 is the value of the investment to the promoters had the business been allowed to proceed according to the plan, and matured for sale in 2021. On the other hand, the respondent submitted that the petitioner is not entitled to a single penny as compensation as the same would amount to unjust enrichment. I do not agree with either. As noted above, the purpose of compensatory damages is to provide the monetary amount necessary to replace what was lost and nothing more. Furthermore, it must be taken into account the fact that in constitutional matters the primary purpose of constitutional remedy is not compensatory or punitive but rather to vindicate the rights violated and to prevent or deter any future infringements. With this in mind, I find the sum of Kshs 848,574,741 to be an unavailable measure of the loss suffered by the Petitioner.

18. I note from the statement of Andrew Brown, the petitioner’s witness that initial shareholders equity invested was about Kshs 224 million to launch the project and undertake initial development costs including purchase of the land for the project among other things. Furthermore, Mr. Brown noted that there was contract for the construction of the data Centre with Flexenclosure Sweden and related civil works with Bulkon Limited which were in execution version. However, it is clear that the contracts were never executed and the works not done. Consequently, no losses were suffered in this regard. Furthermore, I note that the debt guarantees by GuarantCo of Kshs 850 Million and the long-term debt facility of approximately Kshs 1.05 Billion by Dutch bilateral bank FMO and German development Bank DEG was never utilized as the same were under consideration and had only received initial approval. This cannot therefore form a basis to claim compensation.

19. It therefore seems that the amount invested to date by the petitioner is approximately Kshs 224 million that was given by investors to undertake initial costs of the project. Furthermore, there is every indication that there is a further amount of Kshs 1,190,160 as site security being costs of site security from November 2016 – July 2017. This in my opinion constitutes what was lost by the petitioner and which it is entitled to as compensation. But even then, the respondent in a Constitutional Petition cannot be held liable to every loss in a transaction. The remedy given by the Court is such as only to acknowledge the wrong doing by the respondent and to punish such wrong doing so as to minimize its future occurrence.

20. The compensation is never meant to make the petitioner recover every penny lost. In the circumstance and considering that the actual monetary loss suffered by the petitioner translates to about Kshs 225 million, which included purchase for land and given that the said land was not lost, I am satisfied that a sum of Kshs 151,000,000 would be adequate punishment to the respondent.  In my view, the petitioner has proved that it is entitled to some compensation which I have assessed as due.

21. In the upshot, I make judgement as follows:

i. The Petitioner is hereby awarded Kshs 151,000,000 as compensation against the respondent.

ii. Interest thereon at court rates from date of judgment.

iii. Costs for the Petition.

22. It is so ordered.

DATED, SIGNED AND DELIVERED AT ELDORET THIS 10^TH OF MARCH,  2022

E. K. OGOLA

JUDGE