Cmc Holdings Limited & 1 other v Jaguar Land Rover Exports Limited
The bottom line
#Kenya's Court of Appeal ruled CMC Holdings failed to prove both legal tests for stopping Jaguar Land Rover's contract termination while appealing, so their application was dismissed with costs.
What this practically means
#Executive summary
#Key legal issues
#Whether the applicants demonstrated an arguable appeal under rule 5(2)(b)
The court was not persuaded that the applicants had an arguable appeal capable of founding the orders sought.
The court reviewed the rival positions on whether the contracts were terminated under the no fault clause, following remedial measures, or an unsuccessful tender, and whether the termination notice was waived by continued trading. It declined to make definitive findings on those issues, holding they were for the bench hearing the appeal, and concluded that on the arguability limb the applicants had not discharged their burden.
Whether there was anything left to injunct or preserve
No. The interim injunction had been discharged upon dismissal of the applicants' application in the High Court, and the contract was terminated in law, so an injunction would revive a non-existent contractual relationship.
The court adopted its earlier decision in Giant Holdings Limited v Kenya Airports Authority, holding that once the superior court dismissed the interlocutory injunction application and discharged the interim orders, the contract remained terminated until a court declared otherwise. The respondent had lawfully moved on and contracted with third parties, and the applicants remained free to source similar vehicles elsewhere, so preservation orders had no foundation.
The nugatory limb of the rule 5(2)(b) test
Having found no arguable appeal, the court did not need to consider the nugatory limb since the twin principles are conjunctive.
The court reiterated that the twin principles under rule 5(2)(b) are conjunctive and an applicant must prove both. Finding the first limb unfulfilled, it expressly declined to go into the nugatory aspect, while observing that the applicants could still trade in and source similar vehicles from other sources to mitigate any loss.
Legal principles established
#- An applicant under rule 5(2)(b) must satisfy both twin requirements - arguability and nugatory effect - conjunctively; proving only one is insufficient.
- Where an application for an interlocutory injunction in a contractual dispute is dismissed and interim orders are discharged, the contract remains terminated in law and there is nothing to preserve or injunct; an injunction would purport to revive a contractual relationship that no longer exists.
Court orders
#- 1.The application under rule 5(2)(b) of the Court of Appeal Rules is dismissed
- 2.Costs of the application awarded to the respondent
- On appeal from
- High Court of Kenya at Nairobi
- HCCC No. 752 of 2012
- Jurisdiction invoked
- Rule 5(2)(b) of the Court of Appeal Rules - application for injunction pending the hearing and determination of an intended appeal
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Cmc Holdings Limited & 1 other v Jaguar Land Rover Exports Limited", Case Analysis (2013). Civil Application No. Nai 66 of 2013 (UR 44/2013). Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2013/10/eng@2013-06-07
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.