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Court of AppealDismissedCivil Appli 19 of 2007· [2007] KECA 365 (KLR)

G4S SECURITY SERVICES (K) LIMITED v GROUP FOUR SECURITY LIMITED (Civil Application 19 of 2007) [2007] KECA 365 (KLR)

Court of Appeal of Kenya
30 March 2007
2,009 words in judgment
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The bottom line

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Kenya's Court of Appeal refused to pause an order barring G4S from using 'Group 4 Securicor', because its rebranding costs could be repaid in damages.

What this practically means

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Executive summary

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This is a single ruling of the Court of Appeal at Nairobi (Tunoi, Githinji and Onyango Otieno, JJA) dismissing an application under Rule 5(2)(b) of the Court of Appeal Rules by G4S Security Services (K) Limited for a stay of an interlocutory injunction granted by the High Court (Azangalala J) on 13 November 2006 in H.C.C.C. No. 218 of 2006. The respondent, Group Four Security Limited, had sued alleging trade mark infringement and passing off, and obtained an injunction restraining the applicant from trading under the name 'Group 4 Securicor'. The Court restated the twin Rule 5(2)(b) requirements: the intended appeal must be arguable, and the appeal must be rendered nugatory if the order sought is not granted. Applying the first limb, the Court stressed that its jurisdiction is original and not bound by the High Court's earlier refusal of stay (Waweru J, 24 January 2007), but on independent consideration agreed the eleven grounds of appeal were arguable. On the second limb, the Court held the applicant's compliance costs - rebranding vehicles, uniforms and premises, quantified at several million shillings - were readily quantifiable and compensable by damages, the respondent having filed undertakings in damages; by contrast, if stay were granted the respondent would suffer irreversible loss of corporate identity and goodwill. Relying on Kenya Shell Ltd v Kibiru and Mukuma v Abuoga, the Court found the appeal would not be rendered nugatory and dismissed the application with costs to the respondent. The underlying appeal was not decided; the High Court injunction remains in force pending the intended appeal.

Key legal issues

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01

Whether the intended appeal was arguable under Rule 5(2)(b)

Holding

Yes - on independent consideration the Court was satisfied the grounds challenging the finding of trade mark infringement were arguable, agreeing with the superior court's own view though not bound by it.

Reasoning

The applicant enumerated eleven grounds of appeal challenging the superior court's finding of infringement. The Court noted that Waweru J had already found the grounds serious and arguable, but stressed that its Rule 5(2)(b) jurisdiction is original, so the High Court's view was not binding. On its own independent consideration, it agreed the intended appeal was arguable, satisfying the first limb.

p. 3
02

Whether the intended appeal would be rendered nugatory if the injunction was not stayed

Holding

No - the applicant's loss from compliance with the injunction was quantifiable rebranding expense, compensable by damages secured by an undertaking, whereas the respondent would suffer irreversible loss of corporate identity if stay were granted.

Reasoning

The Court weighed the competing harms. If stayed and the appeal failed, the respondent would suffer irreversible loss of its corporate and trade name for the three or so years of the appeal. If not stayed and the appeal succeeded, the applicant's loss was limited to quantifiable rebranding costs, compensable by damages under the undertaking the respondent had filed. Substantial loss, as recognised in Kenya Shell Ltd v Kibiru and Mukuma v Abuoga, could render an appeal nugatory, but only where not compensable. Here the balance of convenience, as found by the High Court, favoured the respondent.

p. 4

Legal principles established

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  • An applicant under Rule 5(2)(b) must satisfy the court that the intended appeal is arguable (not frivolous) and that, unless the order sought is granted, the appeal would be rendered nugatory.
  • The Court of Appeal's jurisdiction under Rule 5(2)(b) is original and its exercise is not bound by findings of the superior court on a similar stay application.
  • Substantial loss that is readily quantifiable and compensable by an award of damages will not render an appeal nugatory, particularly where an undertaking in damages has been given.

Court orders

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  1. 1.The application for stay of the High Court injunction order pending the intended appeal is dismissed
  2. 2.Costs of the application awarded to the respondent

Authorities

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Legislation

  • Court of Appeal RulesRule 5(2)(b)

Cases cited (2)

  • Kenya Shell Ltd vs. Kibiru & Another
    [1980] KLR 410
  • Mukuma vs. Abuoga
    [1988] KLR 645
On appeal from
High Court of Kenya, Nairobi (Milimani)
H.C.C.C. No. 218 of 2006
Jurisdiction invoked
Rule 5(2)(b) of the Court of Appeal Rules

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, "G4S SECURITY SERVICES (K) LIMITED v GROUP FOUR SECURITY LIMITED (Civil Application 19 of 2007) [2007] KECA 365 (KLR)", Case Analysis (2007). Civil Appli 19 of 2007. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2007/365/eng@2007-03-30

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