NAIROBI, Kenya — The High Court has quashed a Sh62.7 million penalty imposed on Tononoka Rolling Mills over alleged price-fixing and output restrictions, ruling that electronic evidence relied on by the Competition Authority of Kenya (CAK) did not meet legal admissibility requirements.
Justice Moses Ado set aside the Competition Tribunal’s July 2025 decision that had upheld CAK’s determination and also quashed the regulator’s August 2023 decision, including the financial penalty and remedial orders.
The court found that electronic records relied upon by CAK, including emails and WhatsApp messages, lacked the certificate required under the Evidence Act for their admission as evidence.
Electronic Evidence At Centre Of Dispute
The case arose from a CAK investigation into alleged restrictive trade practices involving 13 steel-sector companies.
CAK investigators searched Tononoka’s premises in December 2021 and extracted electronic material that formed part of the evidence used to support the regulator’s case.
Justice Ado said Section 33(1) of the Competition Act requires evidence received by CAK to comply with applicable rules of admissibility.
The court further held that Section 106B of the Evidence Act requires a certificate before electronic records can be admitted as evidence.
CAK had argued that the certification requirement did not apply to electronic material obtained directly through its statutory search and seizure powers.
The High Court rejected that interpretation, holding that the Competition Act applies broadly to any statement, document, information or matter received by the authority.
Tribunal Faulted Over Electronic Records
The court also faulted the Competition Tribunal for relying on the electronic records after expunging CAK’s certificate of electronic evidence.
The certificate had been filed after the investigation had closed, leading the Tribunal to remove it from the record while still relying on the underlying electronic material.
Justice Ado found that approach to be an error of law.
With the electronic evidence excluded, the court concluded that there was insufficient independent evidence to establish that Tononoka Rolling Mills itself had participated in the alleged price-fixing or output restrictions.
The court noted that CAK had not identified sufficient non-electronic evidence, including sworn testimony, admissions or minutes of physical meetings, to sustain the finding against the company.
Court Distinguishes Tononoka Companies
The High Court also questioned the basis for imposing the penalty on Tononoka Rolling Mills when preliminary notices and demand letters had been addressed to Tononoka Steels Limited.
The court found no evidence of fraud, sham arrangements or circumstances that would justify piercing the separate legal identities of the two companies.
Tononoka Rolling Mills manufactures TMT reinforcement bars, while Tononoka Steels produces pipes, hollow sections and wire products.
The court found no evidence that the commercial decisions of one company were dictated by the other.
CAK Steel Cartel Crackdown
The case formed part of a wider CAK investigation into alleged collusion in Kenya’s steel industry.
In 2023, the regulator announced combined penalties of about Sh338.8 million against steel manufacturers over alleged price-fixing and output restrictions.
CAK said the alleged cartel conduct included collectively setting prices, coordinating price-adjustment timelines and limiting imports of certain steel components to create artificial shortages.
The regulator had linked the alleged practices to higher steel prices and increased construction costs.
