Court blocks Sh62m fine on steel firm Tononoka for price fixing

The High Court has overturned a Sh62.7 million fine imposed on steel manufacturer Tononoka Rolling Mills Ltd by the Competition Authority of Kenya (CAK) over alleged price fixing and manipulation of construction material prices.

The court on set aside the Competition Tribunal’s decision upholding the penalties, ruling that CAK had relied on electronic evidence including emails that did not meet the mandatory admissibility requirements under the Evidence Act.

The judge also faulted the competition watchdog for imposing liability on Tononoka Rolling Mills based on the alleged conduct of another legally distinct company within the same corporate group.

In its judgment, the court held that electronic records relied upon by CAK must be accompanied by the required certificate of electronic evidence to establish their source, authenticity, custody and handling.

The judge rejected CAK’s argument, which was adopted by the Tribunal, that the certification requirement applied only to information obtained from third parties and not electronic records seized directly from companies during investigations.

"In the present case, I am unable to accept the Respondent's submission... that section 33(1) of the Act is confined to material received from third parties and does not extend to material obtained directly by the Respondent through search and seizure," the court ruled on October 22, 2026.

It added that the purpose of the certificate was to guard against manipulation of electronic records, a risk that could not be overlooked merely because the investigating authority had obtained the material itself.

"The requirement of electronic certificate is not merely procedural and technical," the judge said, emphasising that the document was necessary to establish the source, process and delivery of electronic evidence before it could be admitted.

The court noted that the Tribunal had, in a ruling delivered on November 21, 2024, expunged the only certificate of electronic evidence presented by CAK for having been produced out of time and in violation of the law.

However, the Tribunal subsequently relied on the same electronic records in its final judgment without explaining how they met the statutory requirements.

"It could not, consistently with that ruling, proceed in its final Judgment to rely upon the very electronic records whose foundational certificate no longer formed part of the record," the court said.

The judge found that emails and electronic communications marked as evidence 1, 2, 8, 23 and 36 could not support the finding of liability against Tononoka Rolling Mills.

"Once the electronic evidence is excluded for want of the mandatory certificate, the residual evidentiary basis... does not appear sufficient to sustain the finding of liability against the Appellant," the court ruled.

The decision followed a challenge by Tononoka Rolling Mills, which had faulted CAK's findings, arguing that the authority failed to establish an agreement, concerted practice or decision involving the company to restrict competition.

In August 2023, CAK fined the manufacturer Sh62.72 million for allegedly participating in alleged price fixing and colluding with other steel manufacturers to manipulate the prices of construction materials. Eight other steel manufacturers were also fined.

The company challenged the decision before the Competition Tribunal, but its case was dismissed in July 2025.

In its appeal, Tononoka Rolling Mills argued that CAK had failed to demonstrate how its conduct amounted to an infringement of Section 21 of the Competition Act, which prohibits agreements or concerted practices that restrict competition.

"The Respondent failed to establish the essential ingredients required under Section 21 of the Act, including the existence of any agreement, concerted practice, or decision," the company submitted.

It also accused the watchdog of denying it a fair hearing by failing to provide an opportunity to cross-examine those who prepared the Market Intelligence Report and conducted searches at its premises.

Fair hearing

The company further questioned the impartiality of the proceedings, arguing that some officials who participated in the investigations also sat on the adjudicative panel.

"The issue therefore is not whether the Respondent (CAK) had the power to investigate, charge, and adjudicate, but whether, in exercising those powers, it respected the Appellant's constitutional right to a fair and impartial hearing," it said.

The court also rejected CAK's attempt to assign liability between Tononoka Rolling Mills and Tononoka Steels Limited, finding that the two were legally distinct entities with different commercial operations.

While Tononoka Rolling Mills manufactures TMT reinforcement bars, Tononoka Steels Limited produces pipes, hollow sections and wire products.

The judge said CAK had failed to demonstrate that either company lacked autonomy in its commercial decisions or that one dictated the other's conduct.

"The Respondent cannot therefore treat the entities as a single economic unit to attribute liability while simultaneously treating them as independent competitors to find a violation of section 21," the court ruled.

The judge consequently found that the Tribunal had erred in upholding penalties against an entity distinct from the party investigated.

The court set aside the Tribunal's judgment delivered on July 9, 2025, and quashed CAK's determination of August 17, 2023, including all financial penalties and remedial directions issued against Tononoka Rolling Mills.

The judge observed that the severity of sanctions imposed by CAK required evidence capable of withstanding scrutiny in a court of law, regardless of who collected it.

"Such consequences are visited upon an undertaking only on the strength of evidence that would withstand scrutiny in a court of law, irrespective of who gathered it," the court said.

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