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Court of AppealDismissedCivil Appeal (Application) Nai 14 of 2006· [2007] KECA 68 (KLR)

QUASAR LIMITED v KOBIL PETROLEUM LIMITED [2007] KECA 68 (KLR)

Court of Appeal of Kenya
23 March 2007
Philip Kiptoo TunoiP.K. TunoiEOE.O. O'KubasuEGE.M. Githinji
623 words in judgment
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The bottom line

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The Court of Appeal refused to pause Quasar's case against Kobil, ruling a promising appeal alone is not enough to stop proceedings.

What this practically means

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Executive summary

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This was an application under rule 5(2)(b) of the Court of Appeal Rules seeking a stay of proceedings in Nairobi Milimani HCCC No. 412 of 2003, pending the hearing and determination of an intended appeal against a ruling of Kasango J delivered on 27th April 2005. The underlying dispute concerned premises known as Kisii Mun/Block 111/77: Quasar Limited had sued Kobil Petroleum Limited in Kisii seeking, among other things, a permanent injunction restraining its eviction, while Kobil filed suit in Nairobi two days later over the same premises. Kobil's application to transfer the Kisii suit to Nairobi was dismissed with costs on 7th October 2003, but on 15th December 2003 Kobil applied in the Nairobi suit to consolidate the two suits for trial in Nairobi, and that application was allowed despite Quasar's objections of res judicata and abuse of process. Quasar filed a Notice of Appeal and moved the Court of Appeal for a stay of proceedings. Applying the twin test under rule 5(2)(b), and following its decision in David M. Silverstein v Atsango [2002] 1 KLR 867, the Court assumed without deciding that the appeal was arguable, but held that the applicant had failed to demonstrate that the intended appeal would be rendered nugatory if no stay were granted. The application was dismissed with costs on 23rd March 2007. The decision binds subordinate courts and parties to the principle that both limbs of the rule 5(2)(b) test must be satisfied before a stay of proceedings will issue.

Key legal issues

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01

Whether the twin principles for relief under rule 5(2)(b) were satisfied

Holding

The Court assumed, without deciding, that the appeal was arguable, but found the nugatory requirement unmet and dismissed the application.

Reasoning

The Court applied the established two-limb test under rule 5(2)(b): the applicant must show the appeal is arguable and that it would be rendered nugatory if no stay is granted. Following its own decision in Silverstein v Atsango, the Court was prepared to assume arguability in the applicant's favour but was not persuaded that refusing the stay would render the appeal nugatory. Both limbs must be satisfied; failure on one disposes of the application.

p. 2
02

Whether the order consolidating the Kisii and Nairobi suits warranted a stay

Holding

The consolidation order, though arguably obtained after the respondent had lost a similar transfer application in Kisii, did not justify a stay because the nugatory test was not met.

Reasoning

The applicant contended that the respondent, having lost a transfer application in Kisii, reversed course and obtained consolidation in Nairobi, rendering the application res judicata and an abuse of process. The Court recorded these arguments but did not decide them; its refusal rested solely on the failure to satisfy the nugatory-principle limb of the rule 5(2)(b) test, leaving the merits of the res judicata contention for the intended appeal.

p. 2

Legal principles established

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  • On a rule 5(2)(b) application for stay of proceedings, an applicant must establish both that the intended appeal is arguable and that it would be rendered nugatory if the stay is not granted; failure on the nugatory limb is fatal even where arguability is assumed.

Court orders

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  1. 1.The application for stay of proceedings is dismissed
  2. 2.Costs of the application are awarded to the respondent

Authorities

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Legislation

  • Court of Appeal RulesRule 5(2)(b)

Cases cited (1)

  • David M. Silverstein v Atsango
    [2002] 1 KLR 867
On appeal from
High Court of Kenya at Nairobi (Milimani, Commercial Courts)
H.C.C.C. No. 412 of 2003
Jurisdiction invoked
Rule 5(2)(b) of the Court of Appeal Rules (application for stay of proceedings pending appeal)

Key timeline

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Practical implications

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Frequently asked questions

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Cite this brief

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Cite this brief

Caselaw, "QUASAR LIMITED v KOBIL PETROLEUM LIMITED [2007] KECA 68 (KLR)", Case Analysis (2007). Civil Appeal (Application) Nai 14 of 2006. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2007/68/eng@2007-03-23

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