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Court of AppealDismissedCivil Application No. 14 of 2006· [2007] KECA 387 (KLR)

QUASAR LIMITED v KOBIL PETROLEUM LIMITED (Civil Application 14 of 2006) [2007] KECA 387 (KLR)

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

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Kenya's Court of Appeal confirmed that even an arguable appeal cannot pause a case unless the applicant proves the appeal would be wasted without a stay.

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, O'Kubasu and Githinji JJA) dismissing an application by Quasar Limited, under rule 5(2)(b) of the Court's Rules, for a stay of proceedings in Nairobi Milimani HCCC No. 412 of 2003 pending 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 sued Kobil Petroleum at Kisii on 9th July 2003 seeking, among other relief, a permanent injunction restraining its eviction; two days later Kobil filed its own suit in Nairobi over the same premises. Kobil's application to transfer the Kisii suit to the Milimani Commercial Division was dismissed with costs on 7th October 2003, whereupon it filed a notice of appeal. On 15th December 2003 Kobil applied in the Nairobi suit to consolidate the two suits for trial before the Commercial Court in Nairobi. Quasar objected that the application was res judicata and a grave abuse of the court process, but the High Court allowed consolidation, prompting Quasar's notice of appeal and the present application. The court observed that Kobil thereby reversed and obtained in the Nairobi suit what it had lost in the Kisii suit. Assuming in Quasar's favour that the intended appeal was arguable, the court held, applying its decision in Silverstein v Atsango, that Quasar had failed to show that the success of the appeal would be rendered nugatory absent a stay. The application was dismissed with costs, confirming that under rule 5(2)(b) arguability alone is insufficient; the applicant must also demonstrate the nugatory element.

Key legal issues

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01

Whether the intended appeal against the consolidation ruling is arguable.

Holding

Arguability was assumed in the applicant's favour but was not decided; the court expressly extended the applicant the benefit of the doubt on the first limb of the rule 5(2)(b) test.

Reasoning

The court applied the settled two-limb test for relief under rule 5(2)(b) of the Rules of this Court. Rather than adjudicate arguability, it assumed in the applicant's favour that the appeal was arguable and not frivolous, proceeding directly to the second and, in its view, decisive question of whether the appeal would be rendered nugatory without a stay. Because this limb was assumed rather than determined, it forms no ratio.

p. 2
02

Whether the success of the intended appeal would be rendered nugatory if a stay of proceedings is not granted.

Holding

No. The applicant failed to satisfy the court on the nugatory criterion, so the stay could not issue even on the assumption of arguability.

Reasoning

Relying on its own prior decision in Silverstein v Atsango, the court treated the nugatory requirement as a cumulative and mandatory element of the rule 5(2)(b) test: an arguable appeal will not attract a stay of proceedings unless the applicant shows that the appeal's success would be rendered nugatory if the trial were to proceed. Quasar led the court to no such conclusion, so the application failed on the second limb notwithstanding the assumption of arguability.

p. 2

Legal principles established

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  • An applicant for stay of proceedings under rule 5(2)(b) must satisfy both limbs of the twin test - the appeal must be arguable AND its success must be rendered nugatory if the stay is not granted; arguability alone, even assumed, will not secure a stay.
  • The nugatory limb is decisive: where the applicant fails to demonstrate that the success of the intended appeal would be rendered nugatory if proceedings continue in the superior court, the application for stay must be dismissed regardless of arguability, applying the Court of Appeal's own decision in David M. Silverstein v Atsango [2002] 1 KLR 867.

Court orders

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  1. 1.The application for stay of proceedings in Nairobi Milimani HCCC No. 412 of 2003 pending the intended appeal is dismissed.
  2. 2.The applicant is to pay the respondent the costs of the application.

Authorities

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Legislation

  • Court of Appeal Rules (Rules of this Court)Rule 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)
HCCC No. 412 of 2003
Jurisdiction invoked
Rule 5(2)(b) of the Rules of this Court (Court of Appeal Rules) - the application was 'expressed to be brought under rule 5(2)(b) of the Rules of this Court'

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 (Civil Application 14 of 2006) [2007] KECA 387 (KLR)", Case Analysis (2007). Civil Application No. 14 of 2006. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2007/387/eng@2007-03-23

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