Ramji Haribhai Devani Limited v Kenya Commercial Bank Limited [2006] KECA 209 (KLR)
The bottom line
#Kenya's Court of Appeal let the bank keep collecting loan payments because it could refund any overcharges if the borrower later won.
What this practically means
#Executive summary
#Key legal issues
#Test for injunction pending appeal under rule 5(2)(b) of the Court of Appeal Rules
The applicant must satisfy the twin requirements of an arguable appeal and that the appeal's success would be rendered nugatory if the order is not granted.
The court restated the settled two-limb test: first, the intended appeal must be arguable, meaning not frivolous, assessed within the standards of probability; second, the applicant must show that success of the appeal would be rendered nugatory if the injunction is refused. Both limbs must be satisfied, and failure on the second limb is fatal even where the first is met.
Whether the intended appeal was arguable
Yes - questions on the compounding of interest, breach of section 44 of the Banking Act and the application of section 52(1) were arguable.
The court accepted that whether interest was compounded monthly or daily under the contract, whether section 44 of the Banking Act was breached and with what effect, the correct application of section 52(1) of the Banking Act, and whether money was irregularly taken from the applicant's account were all matters that could not be said to be frivolous; the first limb was satisfied without difficulty.
Whether the success of the intended appeal would be rendered nugatory
No - the applicant failed the second limb; the bank could repay any monies found to have been wrongly charged, and there was no imminent danger of realisation of securities or appointment of a receiver.
The court held that if the appeal succeeded the applicant would simply be stopped from further demands and realisation, and any wrongly charged sums would be repayable by the bank, which was able to pay. The applicant's fear of receivership or sale was hypothetical because the respondent had taken no steps to realise the securities and would not do so so long as instalments were paid. Accordingly the nugatory limb failed and the application fell to be dismissed.
Legal principles established
#- An applicant under rule 5(2)(b) of the Court of Appeal Rules must first demonstrate that the intended appeal is arguable, and second, that the success of the intended appeal would be rendered nugatory if the application is not granted.
Court orders
#- 1.The notice of motion dated 9th May, 2006 seeking injunctive orders pending the hearing and determination of the intended appeal is dismissed
- 2.Costs of the application awarded to the respondent
- On appeal from
- High Court of Kenya at Milimani Commercial Courts
- H.C. Civil Suit No. 482 of 2005
- Jurisdiction invoked
- Rule 5(2)(b) of the Court of Appeal Rules (application for injunction pending the hearing and determination of an intended appeal)
Key timeline
#Practical implications
#Frequently asked questions
#Later judgments citing this (3)
#Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.
- THARA ORCHARDS LIMITED v KENYA COMMERCIAL BANK LTD[2012] KEHC 5974 (KLR)26 Jan 2012
- Alfa Motors Limited v Toyota East Africa Limited & 1 other[2009] KEHC 3808 (KLR)27 Apr 2009followed
- Britania Investments Co. Ltd v East African Building Society & Another[2008] KEHC 2691 (KLR)19 Mar 2008
Cite this brief
#Cite this brief
Caselaw, "Ramji Haribhai Devani Limited v Kenya Commercial Bank Limited [2006] KECA 209 (KLR)", Case Analysis (2006). Civil Appli 128 of 2006. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2006/209/eng@2006-06-16
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.