MBARAKI BULK TERMINAL LTD v EAST AFRICAN BULKING SERVICES LTD & 2 OTHERS [2007] KECA 372 (KLR)
The bottom line
#The Court of Appeal refused to pause a judgment that reversed a disputed Mombasa land deal because any loss could be measured and repaid in money.
What this practically means
#Executive summary
#Key legal issues
#The two-limb test for stay of execution under rule 5(2)(b) of the Court of Appeal Rules
The applicant must demonstrate both that the intended appeal is arguable and that its success would be rendered nugatory absent a stay; satisfying only one limb dooms the application.
The court's jurisdiction under rule 5(2)(b) is original and discretionary. In this matter it was common ground that the intended appeal raised arguable points, so argument focused on the nugatory limb. Bosire JA, with Deverell JA concurring, found the losses claimed (purchase price refund, upgrade expenses, lost profits) quantifiable and compensable, and the respondents able to pay, so the appeal could not be rendered nugatory. Githinji JA dissented on that limb, finding irredeemable loss.
Whether the loss claimed by the applicant (USD 4.6 million purchase price plus USD 3 million improvements, business collapse, employee layoffs) rendered the appeal nugatory
By majority, no: the losses were quantifiable economic losses, the property would simply revert to the 3rd respondent (who had no interest in it), and cautions would prevent any party dealing with the property, so the applicant could be restored if it succeeded.
Bosire JA analysed the effect of refusing the stay: the transfer would be reversed, the consolidation cancelled and cautions restored, leaving no party able to deal with the property. Any economic loss would be quantifiable and remediable by court orders. Githinji JA, by contrast, reasoned that deregistration would make it legally and physically impossible to run the business, causing irredeemable collapse over the years before the appeal was heard, and that the 1st respondent would get no direct benefit from the appeal either way since its rights fell to be determined in H.C.C.C. No. 250 of 2005.
Whether the fruits of the judicial review judgment in favour of the 1st respondent should be denied
There must be just cause to deny a litigant the fruits of a decision in its favour; the superior court's order merely restored the parties to their positions before the cautions were discharged, and no just cause was shown by the majority.
The 1st respondent had a decision in its favour, its cautions having been discharged in haste and the titles consolidated and transferred on the same day. The superior court's orders did no more than restore the status quo ante; no refund of the purchase price was ordered because such an order could not properly be made in judicial review. The majority therefore saw no basis for denying the 1st respondent the benefit of the judgment, while Githinji JA would have preserved both sides' positions via stay plus an inhibition.
Legal principles established
#- Under rule 5(2)(b) of the Court of Appeal Rules an applicant must satisfy two conditions: that the appeal or intended appeal is arguable (not frivolous), and that unless stay is granted the appeal, if successful, will be rendered nugatory; establishing one without the other means the application must fail.
- What may render an appeal nugatory varies from case to case; in a decree for payment of money, inability of the other side to refund the decretal sum is not the only factor - the balance of convenience and the claims of both sides are elements to be considered.
- The court may grant a stay of execution where special circumstances of the case require it.
Court orders
#- 1.Civil Application Nos. NAI 4 and 5 of 2007 (consolidated) dismissed with costs, by majority (Bosire and Deverell JJA)
- On appeal from
- High Court of Kenya at Mombasa
- Miscellaneous Civil Application No. 946 of 2005 (and referenced as No. 967 of 2005/2006 in the judgment)
- Jurisdiction invoked
- Rule 5(2)(b) of the Court of Appeal Rules (original jurisdiction to grant stay of execution pending appeal)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "MBARAKI BULK TERMINAL LTD v EAST AFRICAN BULKING SERVICES LTD & 2 OTHERS [2007] KECA 372 (KLR)", Case Analysis (2007). Civil Application Nos. NAI 4 & 5 of 2007 (UR 3/2007) (Consolidated). Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2007/372/eng@2007-03-16
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.