Paragon Electronics Limited v Fatma Muses [2022] KEELC 444 (KLR)
The bottom line
#A Kenyan court refused to rewrite a signed settlement deed, dismissing a hotel's multimillion-shilling property claims because the deed bound the parties.
What this practically means
#Executive summary
#Questions the Court framed
#The issues the Court set itself to decide, in its own words.
- 1.Whether the Deed of Settlement dated the 11th July 2016 was freely and voluntarily entered into and executed by the Parties.
- 2.Whether the Deed of Settlement is binding on the Parties and whether same was varied by the subsequent correspondence in the manner alluded to by the Plaintiff.
- 3.Whether the Plaintiff is entitled to the Reliefs sought.
Key legal issues
#Validity of the Deed of Settlement
The Deed of Settlement dated 11th July 2016 was freely, willingly and knowingly executed and is not null and void
The Deed was prepared by the Plaintiff's own advocates, executed and attested by both parties, never challenged in any proceedings, and PW1 admitted the Plaintiff does not disown it. No allegation of fraud, coercion or undue influence was made. It was therefore concluded at arm's length to close the rescission dispute.
Whether the Deed was varied by subsequent email correspondence
The Deed was binding and was neither altered nor varied by the subsequent correspondence
The emails were without prejudice negotiations between advocates in CMCC No. 4406 of 2017, unrelated to this suit, and no settlement was concluded. Further, clause 2.5 required any variation to be in writing and duly executed, which the emails were not. The court cannot rewrite or imply terms into an explicit contract.
Entitlement to reliefs
The Plaintiff was not entitled to any relief outside the Deed of Settlement
Clauses 2.2, 2.3, 2.5 and 2.6 made the Deed the entire agreement, extinguished prior agreements and remedies, and confined remedies to retention of Kshs 1,000,000 and refund of Kshs 6,022,500. Claims premised on the letter of offer and reinstatement fell outside the Deed and could not stand.
Legal principles established
#- A court of law cannot re-write a contract between parties; parties are bound by its terms unless coercion, fraud or undue influence are pleaded and proved
- Extrinsic evidence is inadmissible to contradict, vary or add to the terms of a written contract or deed
- Where a contract is clear and explicit, the court cannot imply a term merely because it would have been reasonable
- Without prejudice correspondence exchanged in negotiation of another suit has no probative value unless a settlement is reached
Court orders
#- 1.The Plaintiff's suit be and is hereby dismissed with costs to the Defendant.
The bench
#One judgment of the whole court — no separate or dissenting opinions.
Wrote the judgment
- Jurisdiction invoked
- Original civil jurisdiction of the Environment and Land Court over the suit property (Apartment B1-9 on L.R No 330/355)
Relief refused
#Loss of rental income at Kshs 110,000 per month from 11th July 2016
The Deed of Settlement extinguished all remedies outside the Deed
Order for reinstatement of Apartment B1-9 to a four-bedroomed apartment
No binding contract for reinstatement was created by the email correspondence
Alternative declaration that the Deed of Settlement is null and void
The Deed was voluntarily, willingly and knowingly executed at arm's length
Payment of purchase price of Kshs 15,650,000 per the letter of offer with interest
Claims under the letter of offer were extinguished by clause 2.2 of the Deed of Settlement
Costs
The suit was dismissed with costs to the Defendant.
Quotable passages
#Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.
same be and is hereby Dismissed with costs to the Defendant
I find and hold that the Deed of Settlement was indeed binding on the Plaintiff and the Defendant
A Court of law cannot re-write a contract between the parties. The parties are bound by the terms of their contract, unless coercion, fraud or undue influence are pleaded and proved
No provision of this Deed may be changed, waived, discharged or terminated unless it is in writing and duly executed by and/or on behalf of the Parties
the Plaintiff herein is not entitled to any claim and/or relief outside clause 2.3 of the Deed of Settlement, which was freely and voluntarily executed by herself
Issues in the judgment
#The Plaint is dated 5th December 2019 but the witness statement is referred to variously as dated 5th and 6th December 2019
The refund figure is inconsistently stated as Kshs 6,022,000 and Kshs 6,022,500 in different paragraphs
The lower court case number is inconsistently cited as CMCC 4404 of 2017 and Nairobi CMCC NO 4406 of 2017
The Deed of Settlement clause references at paragraph 58 are garbled, reading 'Clauses 2.3, 2.3, 2.3, and 2.5'
The correspondence dated 30th October 2017 is written as '30 th October 20117'
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Paragon Electronics Limited v Fatma Muses [2022] KEELC 444 (KLR)", Case Analysis (2022). ELC No. 404 of 2019. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2022/444/eng@2022-04-20
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.