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Court of AppealPartially AllowedCivil Appli 307 of 2008 (UR 203/2008)· [2009] KECA 390 (KLR)

Sony Gulf Fze-Dubai & another v Parker Radio House Limited [2009] KECA 390 (KLR)

Court of Appeal of Kenya
6 February 2009
ROR.S.C. OmoloPWP.N. WakiDAD.K.S. Aganyanya
1,607 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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Kenya's Court of Appeal paused a sweeping High Court order that had barred Sony from selling products through anyone except one distributor, pending the appeal.

What this practically means

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Executive summary

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The applicants, three Sony entities sued by Parker Radio House Limited for breach of an alleged sole agency agreement, applied under Rule 5(2)(b) of the Court of Appeal Rules for a stay of a High Court injunction granted by Osiemo, J on 17th October 2008. That injunction restrained the applicants jointly and severally from offering for sale, selling, marketing or distributing Sony products in Kenya through anyone other than the respondent. The Court of Appeal restated the two well-known principles governing Rule 5(2)(b) applications: the applicant must show an arguable appeal and that the appeal would be rendered nugatory absent a stay, principles which differ entirely from the Giella v Cassman Brown test applied by the High Court on injunctions. On arguability, the court held it arguable that the sole agency relied on could constitute a restrictive trade practice under section 10 of the Restrictive Trade Practices, Monopolies and Price Control Act (Cap 504), and that the existence of any sole agency agreement was itself arguable. On the nugatory limb, the court emphasised the extremely wide and drastic scope of the injunction and the respondent's failure to give any undertaking as to damages or show ability to pay. Both limbs satisfied, the court allowed the motion and stayed the injunction until the hearing and determination of the intended appeal, but declined to stay the order under prayer 4 (liberty to apply), and ordered costs of the motion to be in the intended appeal. This is a single judgment of the full bench of three Judges of Appeal with no separate opinions.

Key legal issues

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01

Test for stay pending appeal under Rule 5(2)(b)

Holding

The applicant must satisfy the court on two scores: that it has an arguable appeal which is not frivolous, and that the appeal, if successful, would be rendered nugatory without a stay.

Reasoning

The court contrasted the Rule 5(2)(b) principles with the Giella v Cassman Brown principles applied by the High Court for injunctions, noting they are 'totally different'. Both limbs were satisfied here: the arguable points were the public policy/restraint of trade point under section 10 of the Restrictive Trade Practices Act and the existence of a sole agency agreement; the nugatory limb rested on the drastic scope of the injunction and the absence of an undertaking in damages.

p. 3
02

Arguability of the restrictive trade practice and sole agency grounds

Holding

It was arguable, and no higher, that a sole agency of the kind relied on could constitute a restrictive trade practice under section 10 of the Restrictive Trade Practices, Monopolies and Price Control Act (Cap 504), and equally arguable that no sole agency agreement existed.

Reasoning

The respondent's case rested on an agency relationship said to be implicit from the parties' conduct and correspondence, while the applicants denied any such agreement. The court held both the statutory restraint-of-trade point and the existence-of-agreement point were arguable for the purposes of the stay application only, without deciding them finally.

p. 3
03

Nugatory factor: absence of undertaking as to damages

Holding

The drastic nature of the injunction and the respondent's silence on an undertaking to pay damages were factors that could render the appeal nugatory if it ultimately succeeded.

Reasoning

The order compelled the applicants to trade in Kenya only through the respondent. The court noted the order was granted without the respondent giving any undertaking as to damages or demonstrating ability to pay, and treated these as weighty considerations on the nugatory limb.

p. 3

Legal principles established

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  • An application for stay under Rule 5(2)(b) of the Court of Appeal Rules succeeds only where the applicant demonstrates an arguable appeal and that the appeal would be rendered nugatory absent a stay.

Court orders

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  1. 1.Stay of the High Court order restraining the applicants jointly and severally from dealing with any other entity or person for the purposes of offering for sale, selling, marketing or distributing Sony products in Kenya, until the hearing and determination of the intended appeal
  2. 2.No stay of the order granted under prayer No. 4 of the chamber summons
  3. 3.Costs of the motion to be in the intended appeal
On appeal from
High Court of Kenya at Nairobi
H.C.C.C. No. 1053 of 2005
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 (9)

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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, "Sony Gulf Fze-Dubai & another v Parker Radio House Limited [2009] KECA 390 (KLR)", Case Analysis (2009). Civil Appli 307 of 2008 (UR 203/2008). Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2009/390/eng@2009-02-06

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