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Court of AppealDismissedCivil Application No. NAI. 298 of 2010 (UR. 209/2010)· [2012] KECA 24 (KLR)

West Kenya Sugar Company Limited v Kenya Sugar Board & another [2012] KECA 24 (KLR)

Court of Appeal of Kenya
17 February 2012
EOE.O. O'KubasuPWP.N. WakiAGAganyanya
5,460 words in judgment
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The bottom line

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Kenya's Court of Appeal refused to stop a competitor's sugar licence, because large companies can recover money losses later, so a stay was unnecessary.

What this practically means

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Executive summary

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This is a ruling of the Court of Appeal at Nairobi (O'Kubasu, Waki and Aganyanya, JJ.A) on a rule 5(2)(b) motion by West Kenya Sugar Company Limited (WEKSCOL) seeking stay of execution of a High Court judicial review order of 30th November 2010 (Karanja J, Kisumu, JR Case No. 17 of 2010) compelling the Kenya Sugar Board to issue an operating licence to Butali Sugar Mills Limited to mill sugar on LR No. Kakamega/Malava/303, about 10 kilometres from WEKSCOL's plant. The dispute stemmed from a 2006 agreement demarcating a 24-kilometre exclusive cane zone, WEKSCOL's failed injunction suit and joinder application, and its parallel constitutional petition in Nairobi in which it had obtained conservatory orders. The Court found one arguable ground - whether the High Court could mandatorily compel issuance of the licence rather than direct KSB to consider the application - but held that refusal of the stay would not render the intended appeal nugatory, since the parties were substantial commercial entities capable of quantifying losses, the balance of convenience favoured the status quo in an industry affecting thousands of employees and outgrowers, and the applicant had pursued similar remedies in its amended petition. The Court declined to entertain consequential orders (suspension of the licence and an injunction) sought by affidavit without amending the motion, condemning the pursuit of concurrent remedies as abuse of process, and deferred definitive findings to the main appeal, recommending priority listing. The motion was dismissed with costs abiding the result of the intended appeal. The ruling was delivered under rule 32(3) owing to the retirement of Aganyanya JA.

Key legal issues

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01

Arguability of the intended appeal

Holding

The first limb of the rule 5(2)(b) test was satisfied: the question whether the High Court could issue a mandatory order compelling issuance of the licence, or ought only to have directed KSB to consider the application in accordance with the law, is not frivolous.

Reasoning

The Court applied the settled principle that a single arguable ground suffices. It held that the issue whether the High Court could compel KSB to issue the licence under sections 14 and 15 of the Sugar Act, or should merely have directed KSB to consider the application, was beyond triviality, as shown by the hours of argument, and left wider jurisdictional questions to the court hearing the main appeal.

p. 8
02

Whether refusal of stay would render the intended appeal nugatory

Holding

Refusal of the stay would not render the success of the intended appeal nugatory, so the second limb of the rule 5(2)(b) test failed and the application was dismissed.

Reasoning

The Court reasoned that the disputants are sizeable commercial enterprises capable of accounting for their losses, so damages or accounting could cure any prejudice. The balance of convenience favoured maintaining the status quo in an industry affecting hundreds of thousands of employees and outgrowers, to avoid social unrest, and the applicant was not without remedy having amended its constitutional petition to pursue similar relief.

p. 8
03

Alleged abuse of court process through parallel proceedings

Holding

The Court declined to make a definitive finding at the interlocutory stage but flagged the issue for full investigation at the hearing of the main appeal, and refused to entertain the applicant's plea for consequential orders sought by affidavit.

Reasoning

Butali attacked Wekscol for filing successive, concurrent applications in Kisumu and Nairobi seeking the same or similar reliefs after losing each time, and for collaterally attacking unappealed rulings. Wekscol answered that the law allows free access to the courts. The Court noted the 'sugar war' and the need for vigilance, deferred findings to the main appeal, and declined the invitation to grant consequential orders by affidavit.

p. 7

Legal principles established

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  • An applicant under rule 5(2)(b) must demonstrate both that the intended appeal is arguable (even on a single ground) and that, if the order sought is not granted, the success of the intended appeal would be rendered nugatory.
  • In a rule 5(2)(b) application the Court is under a statutory duty under sections 3A and 3B of the Appellate Jurisdiction Act to apply the overriding objective of just, expeditious, proportionate and affordable resolution of applications and appeals.
  • Where parties before the Court are substantial commercial entities with records of their transactions, losses are capable of assessment in accounting documents and cannot found a claim that refusal of a stay renders an appeal nugatory.
  • A party may not obtain by affidavit, without amending its motion, consequential orders that were never prayed for in the notice of motion.

Court orders

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  1. 1.The application for stay of execution of the ruling and order of the High Court at Kisumu dated 30th November 2010 is dismissed
  2. 2.The costs of the application shall abide the result of the intended appeal
  3. 3.The Court strongly recommended that the appeal be listed for hearing on a priority basis

Authorities

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Legislation

  • Court of Appeal RulesRule 5(2)(b)
  • Court of Appeal Rules 2010Rule 32(3)
  • Appellate Jurisdiction ActSections 3A and 3B
  • Sugar ActSection 16(1)
  • Sugar ActSection 14(1)
  • Sugar ActSection 15
On appeal from
High Court of Kenya at Kisumu
KSM. Judicial Review Case No. 17 of 2010
Jurisdiction invoked
Rule 5(2)(b) of the Court of Appeal Rules, read with Sections 3A and 3B of the Appellate Jurisdiction Act

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, "West Kenya Sugar Company Limited v Kenya Sugar Board & another [2012] KECA 24 (KLR)", Case Analysis (2012). Civil Application No. NAI. 298 of 2010 (UR. 209/2010). Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2012/24/eng@2012-02-17

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