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Court of AppealPartially AllowedCivil Appeal 295 of 2003· [2006] KECA 126 (KLR)

GRAIN BULK HANDLERS LIMITED v J. B. MAINA & CO. LTD & 2 others [2006] KECA 126 (KLR)

Court of Appeal of Kenya
10 August 2006
Philip Kiptoo TunoiP. K. TunoiEOE. O. O'KubasuEGE. M. Githinji
4,703 words in judgment
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The bottom line

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Kenya's Court of Appeal threw out a stay that had frozen Kenya Ports Authority contracts, ruling that fully executed contracts cannot be 'stayed' in judicial review cases.

What this practically means

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Executive summary

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The Court of Appeal at Mombasa (Tunoi, O'Kubasu and Githinji JJA) allowed Grain Bulk Handlers Limited's appeal against the order of Khaminwa J of 8 August 2003 that the grant of leave to apply for judicial review do operate as a stay of several decisions of the Kenya Ports Authority in GBHL's favour. The appeal against the grant of leave itself had been withdrawn by consent, leaving only the stay order for determination. The Court first held that an order of stay can be challenged on appeal independently of the grant of leave, and observed that an ex parte order granting leave and stay is provisional and may be set aside before the same judge. On the jurisdictional question, it held that 'stay of proceedings' in Order LIII Rule 1(4) embraces the decision-making process and the decision itself, distinguishing the Privy Council's decision in Vehicles and Supplies Ltd and Exparte Avon County Council because KPA, unlike a government minister, is a body corporate against which injunctions may issue. However, the six agreements between KPA and GBHL, having been executed and crystallized - including charges securing USD 24.5 million - did not themselves constitute 'proceedings' and could not be stayed. The stay order was also held to be wider than the relief sought in the judicial review, imprecise and ambiguous, likely to paralyse port operations, and granted despite the respondents' unexplained delay of 3½ years, amounting effectively to a mandatory injunction on an interlocutory ex parte application. The Court concluded the judge failed to exercise her discretion judicially, set aside the stay order, and ordered the 1st and 2nd respondents to pay the costs of the appeal and of the Kenya Ports Authority. The judgment binds subordinate courts on the meaning of 'stay of proceedings' under Order LIII Rule 1(4) and on the limits of staying executed contracts.

Key legal issues

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01

Whether the order of stay could be challenged on appeal without also challenging the grant of leave

Holding

The contention was rejected; leave and stay are distinct and stay can be challenged alone.

Reasoning

Mr. Balala relied on Republic v Commissioner of Co-operatives, Exparte Kirinyaga Tea Growers to argue stay is inseparable from leave. The Court held the grant of leave is independent of the grant of stay, citing R v Pollution Inspectorate, Exparte Green Peace Ltd where an appeal lay against refusal of stay alone. The authority did not support inseparability.

p. 4
02

Whether KPA's decisions and the six agreements constitute 'proceedings' for purposes of a stay under Order LIII Rule 1(4)

Holding

The process of reaching the decisions and the decisions themselves are proceedings which may be stayed, but the executed contracts are not.

Reasoning

The word 'proceedings' has no precise meaning and takes colour from context. In judicial review, it embraces the process by which the impugned decision is reached and the decision itself. But KPA's decisions to award contracts had crystallized into executed agreements with heavy financial consequences, including charges over land securing USD 24.5 million; executed contracts are not proceedings and cannot be stayed.

p. 7
03

Whether the judge exercised her discretion judicially in granting the stay

Holding

She did not; the stay was too wide, imprecise, ignored GBHL's investment and the respondents' delay, and was effectively a mandatory injunction.

Reasoning

The order covered all contracts and consequential orders beyond the leave sought, was imprecise and of doubtful implementability. The judge failed to consider its effect on GBHL's heavy investment and port operations, risked paralysing grain handling, and disregarded the respondents' 3½-year delay while GBHL had enjoyed contractual rights since 2002. The stay was a wrongful exercise of discretion.

p. 8
04

Relevance of Minister of Foreign Affairs v Vehicles and Supplies Ltd and R v Secretary of State, Exparte Avon County Council

Holding

Both were distinguished; the Court found it unnecessary to decide which applied in Kenya.

Reasoning

Those cases concerned ministerial executive decisions against which injunctions were unavailable, making a stay an indirect injunction. KPA, by contrast, is a statutory body corporate that can sue and be sued, so injunctions may lawfully issue against it. The decisions were therefore not directly relevant.

p. 6

Legal principles established

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  • Executed and implemented contracts do not constitute 'proceedings' capable of being stayed under Rule 1(4) of Order LIII; the superior court has no jurisdiction to stay them.
  • 'Stay of proceedings' in relation to decision-making bodies whose decisions are impugned includes the process by which the decision was reached and the decision itself.
  • Failure to state principles or give reasons for exercising a judicial discretion does not per se prove the discretion was wrongly exercised.
  • The grant of leave to apply for judicial review is independent of, and can be separated from, the grant of stay.
  • An ex parte order granting leave and stay is provisional and may be set aside by the same court that granted it.
  • An appellate court will not interfere with the exercise of discretion by a superior court except on recognized principles.

Court orders

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  1. 1.Appeal allowed
  2. 2.The order of stay of proceedings made on 8th August 2003 set aside
  3. 3.The 1st and 2nd respondents to pay both the costs of the appeal and the costs of the 3rd respondent (Kenya Ports Authority)

Authorities

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Legislation

  • Kenya Ports Authority ActCap 391
  • Kenya Ports Authority ActSection 3(2)
  • Kenya Ports Authority ActSection 12(2)(n)(ii)
  • Civil Procedure RulesOrder LIII Rule 1(4)
  • Civil Procedure RulesOrder L Rule 17
  • Civil Procedure RulesOrder XLII
  • RSC (England)Order 53 rule 3(10)

Cases cited (10)

  • Republic v. Commissioner of Co-operatives, Exparte Kirinyaga Tea Growers Co-operative Savings and Credit Society Ltd
    [1999] 1 EA 245
  • R v. Pollution Inspectorate, Exparte Green Peace Ltd
    [1994] 4 All ER 321
  • R v. Secretary of State for Education
    [1991] 1 All ER 282
  • Minister of Foreign Affairs Trade and Industry vs. Vehicle and Supplies Ltd
    [1991] 4 All ER 65
  • R v Secretary of State – Exparte Herbage
    [1987] 1 All ER 324
  • Njuguna v Minister for Agriculture
    [2000] 1 EA 184
  • Mike J.C. Mills & Another v The Posts & Telecommunications
    High Court Misc. Application No. 1013 of 1996 (unreported)
  • R v Secretary of State for Education and Science Exparte Avon County Council
    [1991] 1 All ER 282
  • Lata v Mbiyu
    [1965] EA 592
  • Mbogo v Shah
    [1968] EA 93
On appeal from
High Court of Kenya at Mombasa
H.C.MISC.APPL. NO. 479 OF 2003
Jurisdiction invoked
Right of appeal against an interlocutory order of the High Court under Order XLII Civil Procedure Rules (the Court doubted, without deciding, whether the order was appellable as of right)

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, "GRAIN BULK HANDLERS LIMITED v J. B. MAINA & CO. LTD & 2 others [2006] KECA 126 (KLR)", Case Analysis (2006). Civil Appeal 295 of 2003. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2006/126/eng@2006-08-10

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