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Court of AppealAllowedCivil Application No. 353 of 2009

Nation Media Group Ltd & another v Chirau Ali Mwakwere [2010] KECA 312 (KLR)

Court of Appeal
30 April 2010
1,224 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 stopped enforcement of a Shs. 10 million defamation award against Nation Media Group, requiring a bank guarantee to secure the money pending appeal.

What this practically means

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Executive summary

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This is a unanimous ruling of a three-judge bench of the Court of Appeal at Nairobi (Tunoi, O'Kubasu and Githinji, JJ.A) on a motion under rule 5(2)(b) of the Court of Appeal Rules by Nation Media Group Ltd and its editorial director, Wangethi Mwangi, seeking stay of execution of a High Court decree (Khamoni, J, dated 8 May 2009 in H.C.C.C. No. 1329 of 2003) awarding the respondent, then Minister Chirau Ali Mwakwere, Shs. 10,000,000 plus costs and interest for defamation arising from a 15 December 2003 publication. The applicants argued the intended appeal was arguable on identification, innuendo and excessive damages, and that payment would cripple their operations. The respondent opposed, claiming dilatoriness and asserting his own assets exceeded Shs. 50,000,000, so any refund order would be met. The court found the appeal arguable without deciding. On nugatory-ness, applying Reliance Bank Ltd v Norlake Investment Ltd, it held that the respondent's ability to refund is not invariably decisive: the appellate court might set aside or reduce the award, and recovery through sale of the respondent's land could be delayed and uncertain. The balance of convenience favoured the applicants, who had offered a bank guarantee. Applying proportionality, the court allowed the application, staying execution conditional on a bank guarantee for Shs. 10,000,000 within 14 days, with costs of the application in the intended appeal. The High Court decree itself was neither affirmed nor disturbed; the ruling is an interlocutory decision binding lower courts on the nugatory-ness and bank-guarantee-condition principles.

Questions the Court framed

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The issues the Court set itself to decide, in its own words.

  1. 1.Whether the intended appeal is arguable and not frivolous
  2. 2.Whether the success of the intended appeal would be rendered nugatory if execution is not stayed
  3. 3.Whether the balance of convenience favours the applicants and on what conditions a stay should issue

Key legal issues

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01

Arguability of the intended appeal

Holding

The intended appeal, challenging identification of the respondent as the person referred to in the article, proof of innuendo and excessive damages, was arguable.

Reasoning

The court considered the grounds in the draft memorandum of appeal, including absence of evidence of identification, lack of proof of innuendo and excessive general damages, and was satisfied without deciding that the appeal was arguable and not frivolous.

p. 2
02

Whether the appeal would be rendered nugatory absent a stay

Holding

Financial ability to refund is not invariably decisive; on these facts, the possibility that the appellate court may decline or considerably reduce the damages award, plus imponderables in selling the respondent's land, meant the balance of convenience favoured the applicants.

Reasoning

Although the respondent had assets sufficient to repay the Shs. 10,000,000 decree, the court relied on Reliance Bank v Norlake to hold that refundability is not decisive. The draft memorandum sought interference with the damages award; if the award were set aside or reduced, recovery from the respondent through sale of his land would be slow and uncertain, inconveniencing the applicants.

p. 3
03

Conditions attaching to the stay

Holding

The stay was granted conditional on the applicants providing a bank guarantee for the full decretal sum within 14 days, applying the principle of proportionality.

Reasoning

The applicants offered security by way of a bank guarantee as a sign of good faith. The court held that proportionality and the need for a level playing ground required the applicants to secure the decretal sum, allowing the existing guarantee to be extended to accord with the order.

p. 3

Legal principles established

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  • In applications for stay pending appeal, the respondent's financial means to refund a decretal sum paid over is not invariably decisive; nugatory-ness must be assessed case by case.
  • A stay may properly be granted conditional on the applicant providing a bank guarantee securing the decretal sum, reflecting proportionality and a level playing field.

Court orders

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  1. 1.Stay of execution of the judgment and decree of the High Court pending determination of the intended appeal
  2. 2.Applicants to provide a Bank Guarantee for Shs. 10,000,000 being the total judgment sum within 14 days, with the existing Bank Guarantee extended to accord with the order
  3. 3.Costs of the application to be in the intended appeal

The bench

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One judgment of the whole court — no separate or dissenting opinions.

majority
majority
majority
On appeal from
High Court of Kenya at Nairobi
H.C.C.C. No. 1329 of 2003
Jurisdiction invoked
Rule 5(2)(b) of the Court of Appeal Rules

Quotable passages

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Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.

We do not understand the position to be that in a decree for the payment of money, for example, the only thing that would render success of an appeal nugatory is the inability of the other side to refund the decretal sum if it has been paid over to it.
p. 2Meaning of nugatory appeal in money decrees
the fact that a respondent in an application of this kind has the financial means to refund the decretal sum should the appeal succeed is not invariably decisive
p. 2Financial capacity to refund not decisive
The balance of convenience is definitely in favour of the applicants, we would think so.
p. 3Balance of convenience
Accordingly, we allow the application and grant an order staying the execution of the decree pending the determination of the intended appeal on condition that the applicants do provide a Bank Guarantee for Shs. 10,000,000 being the total judgment sum.
p. 3Final orders - stay granted on condition of bank guarantee
The costs of this application shall be in the intended appeal.
p. 3Costs

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, "Nation Media Group Ltd & another v Chirau Ali Mwakwere [2010] KECA 312 (KLR)", Case Analysis (2010). Civil Application No. 353 of 2009. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2010/312/eng@2010-04-30

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