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Court of AppealOtherNot stated in the judgment· [1988] KECA 123 (KLR)

Gitahi & another v Warugongo [1988] KECA 123 (KLR)

Court of Appeal of Kenya
17 February 1988
HPH.G. PlattJGJ.M. GachuhiJMJ.R.O. Masime
840 words in judgment
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The bottom line

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Kenya's Court of Appeal confirmed that a bank guarantee is as valid as cash deposit when securing a judgment debt pending appeal, so long as the winning party stays protected.

What this practically means

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Executive summary

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This interlocutory ruling of the Court of Appeal at Nairobi, delivered by Platt, Gachuhi JJA and Masime Ag JA on 17 February 1988, concerned the terms on which a stay of execution pending appeal should be conditional. On 29 January 1988 at Mombasa the court had provisionally granted a stay on terms that the applicant, an insurance company, pay Kshs 100,000 to the widow decree-holder on agreed terms of disbursement, with the balance of Kshs 120,000 to be secured, a banker's guarantee being proposed. When the matter came before the court in Nairobi to settle final terms, counsel for the respondent objected to a banker's guarantee, arguing that judgment had created vested rights, that the decree-holder should have the decretal sum deposited in an interest-bearing account, and that the wealthy applicant would not suffer. Applicant's counsel relied on the English Court of Appeal decision in Rosengrens Ltd v Safe Deposit Centres Ltd [1984] 3 All ER 198. The court held the facts indistinguishable, since in both cases judgment had been given and security was sought pending appeal. Adopting Rosengrens, it held that the court must hold the ring even-handedly between the parties pending appeal, and that the form of security is immaterial so long as it is adequate. The final orders required payment of Kshs 100,000 within 14 days, a banker's guarantee for Kshs 120,000 within the same period, a written undertaking to reimburse the applicant if damages were reduced on appeal, disbursement as per the January order, lifting of the stay in default, and costs as previously ordered.

Key legal issues

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01

Form of security for a decretal sum subject to a stay of execution pending appeal

Holding

A bank guarantee is as acceptable as payment into court or deposit in an interest-bearing account; the respondent cannot insist on cash merely because judgment has been entered

Reasoning

The court adopted the English Court of Appeal's approach in Rosengrens Ltd v Safe Deposit Centres Ltd, holding the facts materially identical: judgment had been given and was subject to appeal, and the court's duty was to preserve the rights of both parties without prejudicing the appeal. The respondent was not entitled to make life difficult for the applicant to tempt him into settling, and there was less need to protect the decree-holder since nearly half the sum had already been paid and the balance had been open to negotiation.

p. 2

Legal principles established

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  • On a stay of execution pending appeal, the court must hold the ring even-handedly; the form of security (cash or bank guarantee) is immaterial so long as it is adequate and does not disadvantage the party providing it

Court orders

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  1. 1.That the sum of Kshs 100,000 be paid over within 14 days of today's date
  2. 2.The sum of Kshs 120,000 be secured by banker's guarantee within the same period
  3. 3.The respondent shall give a written undertaking to reimburse the applicant if the damages are reduced
  4. 4.The disbursement of the Kshs 100,000 will be as set out in the order of January 29, 1988
  5. 5.In default the stay shall be lifted
  6. 6.Costs as already ordered
On appeal from
High Court
Jurisdiction invoked
Stay of execution pending appeal, Court of Appeal

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (1)

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Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.

Cite this brief

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Cite this brief

Caselaw, "Gitahi & another v Warugongo [1988] KECA 123 (KLR)", Case Analysis (1988). Not stated in the judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/1988/123/eng@1988-02-17

Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.