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Court of AppealDismissedCivil Application No. 83 of 2009 (UR 52/2009)· [2009] KECA 337 (KLR)

EGYPTIAN ART GALLERY LIMITED V MODWAYS INVESTMENTS LIMITED [2009] KECA 337 (KLR)

Court of Appeal of Kenya
8 May 2009
ROR. S. C. OmoloEGE. M. GithinjiAVAlnashir Visram
1,306 words in judgment
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The bottom line

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Kenya's Court of Appeal refused to pause an eviction dispute, ruling that freely signed leases must be honoured and that a struck-out suit leaves nothing to stay.

What this practically means

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Executive summary

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This was a single-judgment ruling of a three-judge bench of the Court of Appeal at Nairobi (Omolo, Githinji and Visram, JJA) on an application under rule 5(2)(b) of the Court of Appeal Rules by Egyptian Art Gallery Limited for an injunction and stay of proceedings pending an intended appeal from a ruling of Waweru, J. delivered on 20th March 2009 in H.C.C.C. No. 23 of 2009. The High Court had dismissed the applicant's application for an interim injunction and struck out the entire suit on the ground that it disclosed no reasonable cause of action. The underlying dispute concerned a six-year lease of premises at Capital Centre, which the applicant alleged was a harsh and unconscionable bargain, eleven days before its expiry. The Court of Appeal restated the settled twin principles governing rule 5(2)(b) applications, citing Ishmael Kagunyi Thande v Housing Finance of Kenya Ltd and the Githunguri v Jimba Credit line of cases, and held that the intended appeal was not arguable: the lease was freely negotiated without a renewal clause, the applicant enjoyed its full benefit before alleging unconscionability, and courts uphold rather than rewrite contracts. Having found the appeal not arguable, the court declined to consider the nugatory limb. It also refused the stay of proceedings because, the suit having been struck out, there were no proceedings left to stay. The motion dated 30th March 2009 was dismissed with costs to Modways Investments Limited. The decision below was not disturbed; this was an interlocutory application, not the appeal itself.

Key legal issues

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01

Arguability of the intended appeal under rule 5(2)(b)

Holding

The intended appeal was not arguable; the lease was freely negotiated for a six-year term without a renewal clause, nothing was unconscionable about it, and the plaint sought no injunction.

Reasoning

The court endorsed the settled twin-test for rule 5(2)(b) applications drawn from Ishmael Kagunyi Thande v Housing Finance of Kenya Ltd. It noted the superior court had held the lease clear and freely agreed, that courts uphold rather than rewrite contracts, and that the applicant enjoyed the full benefit of the lease before alleging unconscionability and had legal representation when executing it.

p. 2
02

Whether stay of proceedings is available where the suit below has been struck out

Holding

Stay of proceedings was refused because, the suit having been struck out, there were no proceedings to stay.

Reasoning

The court observed that although it might arguably have been wrong for the superior court to strike out the whole suit, the practical effect of the striking-out order was that no proceedings remained in the High Court capable of being stayed pending the intended appeal.

p. 2
03

Alleged lack of jurisdiction and breach of natural justice in striking out the suit suo motu

Holding

The court did not determine this contention on its merits, declining it through the finding that the appeal was not arguable; it was raised by the applicant's counsel in submissions only.

Reasoning

Counsel for the applicant argued the superior court acted without jurisdiction and without hearing the applicant when it struck out the suit, a relief not specifically sought. The court did not adopt or reject this argument as a holding, instead disposing of the application on arguability grounds.

p. 2

Legal principles established

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  • An applicant under rule 5(2)(b) must satisfy the twin principles: the appeal or intended appeal must be arguable, and the success of the appeal must otherwise be rendered nugatory.
  • A stay of proceedings cannot issue where there are no proceedings in existence, as where the suit has already been struck out.
  • Where the arguability limb of the rule 5(2)(b) test fails, the court need not consider the nugatory limb.

Court orders

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  1. 1.Dismissal of the motion dated 30th March 2009
  2. 2.Costs of the application to the respondent, Modways Investment Limited

Authorities

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Legislation

  • Court of Appeal Rulesrule 5(2)(b)

Cases cited (3)

  • Ishmael Kagunyi Thande vs Housing Finance of Kenya Ltd
    Civil Application No. NAI. 157 of 2006 (unreported)
  • Githunguri vs Jimba Credit Corporation Ltd, No 2
    (1988) KLR 838
  • J. K. Industries Ltd vs Kenya Commercial Bank Ltd
    (1982-88)
On appeal from
High Court of Kenya at Nairobi
H.C.C.C. No. 23 of 2009
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, "EGYPTIAN ART GALLERY LIMITED V MODWAYS INVESTMENTS LIMITED [2009] KECA 337 (KLR)", Case Analysis (2009). Civil Application No. 83 of 2009 (UR 52/2009). Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2009/337/eng@2009-05-08

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