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Court of AppealDismissedCivil Appli. NAI No. 84 of 2008 (UR. 47/2008)· [2008] KECA 342 (KLR)

Kileleshwa Service Station Limited v Kenya Shell Limited

Court of Appeal
9 October 2008
EOE. O. O'KubasuEGE. M. GithinjiJAJ. Aluoch
1,637 words in judgment
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The bottom line

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Kenya's Court of Appeal refused to pause a ruling that cancelled a Kshs.13 million compensation order, because you cannot 'stay' an order that requires nobody to do anything.

What this practically means

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Executive summary

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The applicant, Kileleshwa Service Station Limited, sought orders under Rule 5(2)(b) of the Court of Appeal Rules for stay of execution of, and an injunction pending appeal against, the ruling of the High Court (Lesiit, J) of 18th December 2007 in H.C.C.C. No. 594 of 2004. The underlying dispute concerned the long-running relationship over a petrol station on a Kileleshwa plot owned by Kenya Shell Limited but operated by the applicant since about 1971. Earlier, Ochieng J had ordered the company to pay the applicant Shs.13,088,000/= for improvements and profits in lieu of six months' notice. On review, Lesiit J partially allowed the company's application and set aside the compensation order, prompting the applicant's intended appeal. The Court of Appeal, per a unanimous bench of O'Kubasu, Githinji and Aluoch JJA, held the intended appeal arguable but dismissed the application. The ruling of 18th December 2007 was a negative order - it merely set aside the compensation order and directed no party to do or pay anything - so it was not capable of execution and stay was misconceived. The injunction was extraneous to the orders under appeal, since eviction could only flow from the independent termination notice of 7th March 2008, and the applicant failed to show the appeal would be rendered nugatory. The application was dismissed with costs to the respondent. The decision binds subordinate courts and the High Court on the distinction between positive and negative orders for stay purposes.

Key legal issues

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01

Whether the ruling of 18th December 2007 was capable of execution

Holding

The ruling merely set aside the order requiring the company to pay Shs.13,088,000/=; being a negative order, it was not capable of execution and stay was misconceived

Reasoning

The court distinguished between positive orders, which direct a party to do or refrain from doing something or to pay a sum, and negative orders which do not. Only positive orders can be stayed or enforced. The applicant was in effect seeking restoration of the compensation order, which a stay application cannot achieve at that stage.

p. 2
02

Whether the injunction pending appeal could issue

Holding

The injunction was extraneous to the orders under appeal; the intended appeal concerned the review order, not eviction, and eviction could only result from the independent termination notice of 7th March 2008

Reasoning

The court examined the nexus between the relief sought and the orders appealed from. The review order of Lesiit J did not directly give rise to eviction, and the applicant had not even annexed a notice of appeal against Ochieng J's orders. The termination notice was independent of the superior court orders, so an injunction tied to it could not pend the intended appeal.

p. 3
03

Whether the intended appeal would be rendered nugatory

Holding

The applicant failed to demonstrate nugatory aspect; as a licensee willing to vacate upon adequate compensation, it did not show the company would be unable to pay if the appeal succeeded

Reasoning

Even where an appeal is arguable, the applicant must show the appeal would be rendered nugatory absent the orders. Since the appeal concerned the setting aside of a compensation order, monetary compensation remained an adequate remedy; the applicant did not suggest the company lacked means to pay appropriate compensation if the appeal succeeded.

p. 3

Legal principles established

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  • An applicant under Rule 5(2)(b) must satisfy the court that the appeal or intended appeal is arguable and that the order sought is necessary to avoid rendering the appeal nugatory
  • A stay of execution cannot lie against a negative order that directs no party to do, refrain from doing, or pay anything
  • An injunction pending appeal must relate to the orders under appeal; it cannot be granted in a vacuum

Court orders

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  1. 1.Application for stay of execution and injunction pending appeal dismissed
  2. 2.Costs of the application awarded to the respondent

Authorities

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Legislation

  • Court of Appeal RulesRule 5(2)(b)
  • Civil Procedure ActSection 80
  • Civil Procedure RulesOrder 44

Cases cited (1)

  • Western College of Arts and Applied Sciences v Oranga
    [1976] KLR 63

    A stay cannot enforce or restrain where the High Court has not ordered any party to do, refrain from doing, or pay anything

On appeal from
High Court of Kenya at Nairobi
H.C.C.C. No. 594 of 2004
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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Later judgments citing this (14)

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Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.

Cite this brief

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Cite this brief

Caselaw, "Kileleshwa Service Station Limited v Kenya Shell Limited", Case Analysis (2008). Civil Appli. NAI No. 84 of 2008 (UR. 47/2008). Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2008/342/eng@2008-10-09

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