The High Court of Kenya has ruled in favor of Fawn Wood Crest Limited, ordering a Nairobi-based car dealer, Kai & Karo Limited, and its director, Joseph Kairu, to refund Sh3.4 million for failing to deliver a 2017 Audi Q7 vehicle. The court's decision was made after the car dealer and his company failed to deliver the vehicle as agreed upon in an October 8, 2024, agreement. The agreement stated that the vehicle would be priced at Sh5.8 million, with a Sh2.2 million deposit paid by Fawn Wood Crest Limited.
As part of the agreement, the parties also agreed that the dealership would sell the buyer’s Subaru Outback and retain the Sh1.7 million proceeds towards the Audi purchase. This brought the amount held by Kai & Karo to Sh3.9 million. However, on October 28, 2024, the company informed the buyer that the 2017 model was unavailable and proposed a 2019 Audi Q7 at a revised price of Sh5.9 million. A fresh purchase agreement was signed on November 21, 2024.
Despite the agreements, the vehicle was never delivered to Fawn Wood Crest Limited, according to Muigai Githu. The respondents refunded Sh500,000 on May 2, 2025, leaving a balance of Sh3.4 million unpaid. Following this, Fawn Wood Crest Limited invoked the arbitration clause in the agreement. A sole arbitrator, Job Weloba, was appointed and issued procedural directions and a peremptory order after the respondents failed to appear or file a response.
The arbitration proceedings continued in the absence of the respondents, and the arbitrator published a final award on February 16, 2026. The award ordered Mr. Kairu and the car importation company to pay the Sh3.4 million balance, commercial interest, and Sh175,000 in arbitration costs. Fawn Wood Crest Limited then sought High Court recognition under the Arbitration Act to enforce the arbitral award.
The judge ruled that the buyer had supplied certified copies of the agreements containing the arbitration clause and the final award. The judge also noted that the respondents were given effective notice of the arbitral proceedings via their designated contractual email address. As a result, the judge was satisfied that the applicant had complied with the requirements of section 36 of the Arbitration Act.
The court's decree allows Fawn Wood Crest Limited to pursue payment of the Sh3.4 million from Kai & Karo Limited and Joseph Kairu. The court directed the respondents to pay the amount with commercial interest from February 28, 2025, until full payment. This ruling highlights the importance of adhering to agreements and the role of arbitration in resolving disputes.
The case demonstrates the significance of arbitration as a means of dispute resolution in commercial transactions. It also underscores the need for parties to fulfill their contractual obligations. The ruling sets a precedent for similar cases in Kenya, emphasizing the enforceability of arbitral awards.
Key points
- The High Court of Kenya has ordered Kai & Karo Limited and its director, Joseph Kairu, to refund Sh3.4 million to Fawn Wood Crest Limited for failing to deliver a 2017 Audi Q7 vehicle.
- The court's decision was made after the car dealer and his company failed to deliver the vehicle as agreed upon in an October 8, 2024, agreement.
- The decree allows Fawn Wood Crest Limited to pursue payment of the Sh3.4 million from Kai & Karo Limited and Joseph Kairu.
