JUDGMENT OF THE COURT
1. The appellant, Karuri Civil Engineering (K) Limited, is a construction company. At all material times, Contract No. 0741PP dated 20th March 2002 was signed between the appellant and the Office of the President for execution of a sewerage system rehabilitation works at Kenya Navy Mtongwe for the Department of Defence.
2. On 22nd May 2002, the respondent Bank, Equity Bank Limited, executed a performance bond in the sum of Ksh. 5,735,647.70 (Five Million Seven Hundred Thirty-Five Thousand Six Hundred Forty-Seven and Seventy Cents) in favour of the Department of Defence. In the Bond, the Bank was guarantor to the appellant for completion and performance of the sewerage rehabilitation contract. In the event the appellant failed to perform the contract, the Bank would pay the Department of Defence the Bond amount upon demand.
3. By a Plaint dated 25th November 2008 as amended on 20th June 2011, the appellant filed suit against the respondent Bank for breach of the Perf…