MENNO TRAVEL SERVICES LIMITED v KEMBI GITURA T/A KEMBI GITURA & COMPANY ADVOCATES [2007] KECA 48 (KLR)
The bottom line
#Kenya's Court of Appeal paused the sale of Menno Travel's shares—but only if the company deposits Kshs 10 million as security first.
What this practically means
#Executive summary
#Key legal issues
#What must an applicant demonstrate to obtain a stay pending appeal under rule 5(2)(b) of the Court of Appeal Rules?
The applicant must satisfy the twin principles: the intended appeal must be arguable (not frivolous), and it must be shown that, if successful, the appeal will be rendered nugatory unless the order for stay is granted.
The court restated the test as now well established, citing S.M. Githunguri v Jimba Credit Corporation Ltd and J.K. Industries Ltd v Kenya Commercial Bank Ltd. It equated arguability with non-frivolousness and required both limbs to be demonstrated. It then weighed the rival contentions: the applicant's grounds on the characterization of the section 37 application, the section 35/37 distinction, inherent jurisdiction and section 46 of the Advocates Act, against the respondent's submission that no bona fide arguable ground existed.
Was the intended appeal arguable?
Yes. The court was prepared to hold, without deciding, that the intended appeal was arguable and not frivolous on the grounds proffered by the applicant's counsel.
The court declined to make definitive or final findings of fact at the interlocutory stage lest the intended appeal be prejudiced. Accepting the grounds argued by Mr. Havi - that the learned Judge erred in treating the section 37 application as one for setting aside rather than refusal of recognition or enforcement, the section 35/37 point, the High Court's inherent jurisdiction under section 60 of the Constitution, and the alleged contravention of section 46 of the Advocates Act rendering the agreement void ab initio - it found arguability without determining the merits.
Would the intended appeal be rendered nugatory if a stay were not granted?
The threatened sale of the applicant's shares in Menno Plaza Limited, which had been valued and could be sold at any time, engaged the nugatory limb; the court granted a stay on terms requiring the decretal sum to be secured.
The applicant's main fear was that the shares - its lifetime investment - would be lost forever if sold. The respondent was not averse to the decretal sum being secured in a bank account. Balancing the hardship to the applicant against the cause of justice, and noting no valid reasons were shown for staying the proceedings, the court granted the stay subject to deposit of Shs.10,000,000 in a joint interest-bearing account within 30 days, failing which the application would stand dismissed.
How should the discretion to grant a stay be approached and limited?
No definitive findings of fact are made at the stay stage; each application is considered on its merits as to arguability and the parties' respective merits before the discretion is exercised, and relief is confined to the extent justified - here, the threatened sale of the shares.
The court observed that the decisions referred to it (Butt v Rent Restriction Tribunal; Oraro & Rachier Advocates v Co-operative Bank of Kenya Ltd) share a common vein: each was considered on its merits as regards arguability and the respective merits of the parties before the discretion was exercised. Because the applicant gave no valid reasons for staying the underlying proceedings, the stay was confined to the threatened execution against the shares and conditioned on security.
Legal principles established
#- On a rule 5(2)(b) application for stay pending appeal, the applicant must establish the twin principles: that the intended appeal is arguable (not frivolous) and that, if successful, it will be rendered nugatory unless stay is granted
- A court seized of a stay application will not make definitive or final findings of fact on the merits of the intended appeal
- Arguability may be found without deciding - an appellate court may hold an intended appeal arguable at the stay stage without determining its ultimate merits
- A stay under rule 5(2)(b) may be granted conditionally, including on security for the decretal sum, with the application standing dismissed if the condition is not met within the stipulated period
Court orders
#- 1.Stay granted as sought in the Notice of Motion, subject to the applicant depositing the sum of Shs.10,000,000 in an interest-bearing account with a reputable bank in the joint names of the two counsel for the parties within 30 days from the date of the ruling
- 2.In default of the deposit within 30 days, the application to stand dismissed
- 3.The stay expressed by the court to be as regards the sale of the applicant's shares in Menno Plaza Limited only, the applicant having given no valid reasons why the proceedings in H.C.MISC. CIVIL APPLIC. NO. 986 OF 2003 should be stayed
- 4.Costs of the application to be in the intended appeal
- On appeal from
- High Court of Kenya at Nairobi
- H.C.MISC. CA. NO. 986 OF 2003
- Jurisdiction invoked
- Rule 5(2)(b) of the Court of Appeal Rules - application for stay pending the determination of an intended appeal
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "MENNO TRAVEL SERVICES LIMITED v KEMBI GITURA T/A KEMBI GITURA & COMPANY ADVOCATES [2007] KECA 48 (KLR)", Case Analysis (2007). Not stated in the judgment (rule 5(2)(b) application for stay arising from intended appeal against H.C.MISC. CA. NO. 986 OF 2003). Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2007/48/eng@2007-07-06
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.