Guardian Bank Limited & 1 other v The Deposit Protection Fund Board The Liquidation of The Euro Bank Limited (in Liquidation) & 1 other
The bottom line
#Kenya's Court of Appeal allowed a depositors' Sh804 million claim appeal to proceed, refusing to strike it out on technical naming objections at an early stage.
What this practically means
#Executive summary
#Key legal issues
#Whether the appeal is competent where the notice and record of appeal were filed by the Board rather than the Fund, the entity named as plaintiff in the High Court
The court declined to strike out the appeal on this ground because the question of which entity - the Fund or the Board - should have filed the notice of appeal is intertwined with the substantive grounds of appeal, and striking it out would merely produce a vicious circle of competency challenges.
The court reasoned that even if the appeal were struck out for having been filed by the Board instead of the Fund, the respondents would likely have objected whichever entity filed, and the underlying question of whether the suit should have been brought in the name of Euro Bank Ltd would remain unresolved. That question is one of great public importance involving recovery of a large sum for depositors, and the court held the appeal on it is not frivolous.
Whether an appeal challenging the competency of a suit filed in the name of a non-existent plaintiff, and the correct plaintiff for a statutory liquidation under the Banking Act, is frivolous
The appeal is not frivolous; the appellate court must construe Section 241 of the Companies Act in conjunction with Sections 36(2) and 35 of the Banking Act and spell out their interrelationship.
The court noted that Section 36(2) of the Banking Act, authorising the Board to sue in its corporate name or in the name of the institution under liquidation, was not brought to the attention of the superior court. Prima facie, the liquidation is one by the Central Bank under court supervision, with the Board as a statutory liquidator. The interplay between the Banking Act and the Companies Act provisions requires full appellate consideration.
Whether the overriding objective favours dismissal of the striking-out application
Having regard to the other issues raised, the large sum claimed for depositors and the public body nature of the claimant, the overriding objective under Section 3A(1) of the Appellate Jurisdiction Act is served by leaving the appeal to be heard on the merits.
The court weighed the public interest in depositors recovering a very large sum of money, the fact that the claim is brought by a public body, and the existence of multiple substantive issues in the appeal. It concluded that determining the contentious issues at an interlocutory stage would not serve the overriding objective, which favours a full merits hearing of the appeal.
Legal principles established
#- Where the issues raised in an application to strike out a notice of appeal are intertwined with, and similar to, the substantive issues in the appeal, the court should not pre-emptively resolve them at an interlocutory stage but should leave the appeal to be heard on the merits, in furtherance of the overriding objective.
- Where a suit is instituted in the name of the wrong plaintiff, the court has discretion under Order I rule 10(1) of the Civil Procedure Rules to order substitution or addition of the correct plaintiff, and may do so even on its own motion under rule 10(2).
Court orders
#- 1.The notice of motion dated 16th May 2007 is dismissed with the costs in the appeal
- On appeal from
- High Court of Kenya at Milimani Commercial Courts, Nairobi
- H.C.C.C. No. 399 of 2005
- Jurisdiction invoked
- Rule 80 of the Court of Appeal Rules (application to strike out a notice of appeal and record of appeal)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Guardian Bank Limited & 1 other v The Deposit Protection Fund Board The Liquidation of The Euro Bank Limited (in Liquidation) & 1 other", Case Analysis (2010). Civil Appeal (Application) No. 64 of 2007. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2010/297/eng@2010-05-07
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.