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Court of AppealAllowedCivil Application No. 343 of 2009

Sammu Mutua Makove (Commissioner of Insurance) v Statutory Manager United Insurance Company Limited & 198 others [2010] KECA 352 (KLR)

Court of Appeal
26 March 2010
1,927 words in judgment
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The bottom line

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Kenya's Court of Appeal halted winding up proceedings against United Insurance because the trial judge's remarks suggested bias, protecting the right to a fair hearing.

What this practically means

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Executive summary

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The Commissioner of Insurance, who had presented a winding up petition against United Insurance Company Limited, applied under Rule 5(2)(b) of the Court of Appeal Rules for a stay of the winding up proceedings pending his appeal (Civil Appeal No. 279 of 2009) against a ruling of Kimaru, J. The High Court had directed that the petition proceed by submissions rather than viva voce evidence, and had later dismissed the Commissioner's application for leave to file a supplementary verifying affidavit after the petition had been fully heard, holding that it lacked jurisdiction to allow it and that affidavits in winding up proceedings constitute prima facie evidence that cannot be supplemented after substantial hearing. In dismissing that application the trial judge remarked that the petition 'appears to be a doomed cause'. A three-judge bench of the Court of Appeal (Bosire, Githinji and Nyamu, JJA) unanimously allowed the stay application. Applying the settled two-limb test, the Court found the appeal arguable and held that the trial judge's pre-emptory remarks created a well-founded apprehension of bias, breaching the petitioner's constitutional right under Section 77(9) to a fair hearing before an impartial court. Relying also on the great public interest in the petition, affecting policy holders and creditors, the Court stayed the winding up proceedings pending the appeal, with costs of the application to be costs in the appeal.

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 from the ruling of the High Court dismissing the application to file a supplementary verifying affidavit is arguable
  2. 2.Whether, if stay of the winding up proceedings is not granted, the appeal would be rendered nugatory

Key legal issues

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01

Principles governing stay of proceedings under Rule 5(2)(b)

Holding

The applicant must show the appeal is arguable and that, if successful, it would be rendered nugatory unless proceedings are stayed; the Court is generally reluctant to stay proceedings as a matter of course.

Reasoning

The Court restated the settled two-limb test for Rule 5(2)(b) applications, drawing on Silverstein v Chesoni: stay of proceedings is exceptional and each case must depend on its own facts. Having scrutinised the grounds of appeal, the Court found the appeal arguable and then turned to the nugatory question, which it resolved on the bias and public-interest grounds raised by the Commissioner.

p. 3
02

Effect of a trial judge's pre-emptory remarks on the fairness of continuing proceedings

Holding

Remarks by a trial judge suggesting a pre-formed opinion that a party's cause is doomed create a well-founded apprehension of bias, vitiating the trial and justifying a stay of proceedings pending appeal.

Reasoning

The trial judge had commented that the petition 'appears to be a doomed cause' and had formed opinions on contested legal questions before ruling. The Court held, by reference to Section 77(9) of the Constitution (as then in force), that a litigant asserting a civil right is entitled to a fair hearing before an impartial court, and that the applicant's apprehension of bias was not unfounded, warranting a stay rather than allowing the trial to conclude.

p. 4

Legal principles established

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  • The Court of Appeal will not stay proceedings in the superior court as a matter of course; an applicant must demonstrate both an arguable appeal and that the appeal would be rendered nugatory unless stay is granted.
  • Where an applicant demonstrates that he is not likely to receive a fair trial before an impartial tribunal, the Court should stay the proceedings pending appeal.

Court orders

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  1. 1.The proceedings in the High Court Winding Up Cause No. 22 of 2006 be stayed pending the hearing and determination of Civil Appeal No. 279 of 2009
  2. 2.The costs of this application shall be costs in the aforesaid 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 Milimani Commercial Court, Nairobi
Winding Up Cause Number 22 of 2006
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.

Before the court can exercise its discretion in favour of the applicant, the applicant should demonstrate that the appeal is arguable and that unless the winding up proceedings are stayed the appeal, if it ultimately succeeds, would be rendered nugatory.
p. 3Rule 5(2)(b) principles
By Section 77 (9) of the Constitution, the petitioner who is seeking a civil right is, among other things, entitled to a fair hearing before an impartial court.
p. 3Fair hearing before an impartial court
Bias or impartiality vitiates a trial and where as in this case, the applicant has demonstrated that he is not likely to get a fair trial of the civil right or that the trial court is not impartial, the court should stop the proceedings by granting a stay of proceedings pending appeal.
p. 4Bias and stay of proceedings
Accordingly, we allow the application and order that the proceedings in the High Court Winding Up Cause No. 22 of 2006 be stayed pending the hearing and determination of Civil Appeal No. 279 of 2009. The costs of this application shall be costs in the aforesaid appeal.
p. 4Final orders and costs

Issues in the judgment

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minor

The applicant's name appears inconsistently within the judgment: the cause title reads 'SAMMU MUTUA MAKOVE' while the supporting affidavit and body read 'Sammy Mutua Makove'.

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (3)

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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, "Sammu Mutua Makove (Commissioner of Insurance) v Statutory Manager United Insurance Company Limited & 198 others [2010] KECA 352 (KLR)", Case Analysis (2010). Civil Application No. 343 of 2009. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2010/352/eng@2010-03-26

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