The case was dismissed by Justice Alfred Mabea who ruled that there was no sufficient evidence to prove the defamation claim.
Atwoli had wanted the court to award him damages amounting to Sh500 million after accusing Kambi of defaming him over the murder of former Kabete MP George Muchai.
Justice Mabea said that for one to be granted damages in a defamation case according to law, he or she must prove that the exact words complained of must exist in a publication.
The judge added that even if he was to find Kambi guilty of defamation, the orders sought by Atwoli were too general and ambiguous to grant.
Atwoli’s lawyer has indicated that he will be filing an appeal against the judgment delivered Friday morning.