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Court of AppealDismissedCivil Application 78 of 2011 (UR. 53/2011)· [2013] KECA 320 (KLR)

Equity Bank Limited v West Link Mbo Limited (Civil Application 78 of 2011) (Civ) [2013] KECA 320 (KLR)

Court of Appeal of Kenya
31 May 2013
EGE. M. GithinjiDMD. K. MusingaPKP. O. KiageKMK. M'inotiFSF. Sichale
34,297 words in judgment
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·~137 min to read original · ~4 min brief

The bottom line

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Kenya's Court of Appeal confirmed it can freeze judgments pending appeal, so litigants who file a notice of appeal can immediately seek stay of execution.

What this practically means

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Executive summary

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This is a five-judge bench ruling of the Court of Appeal on a preliminary objection raised by West Link Mbo Limited to the Court's jurisdiction to entertain Equity Bank Limited's application under Rule 5(2)(b) of the Court of Appeal Rules for stay of execution of a High Court summary judgment (Muga Apondi J, 4 February 2010) for Kshs 39,720,000. Senior Counsel Ahmednassir Abdullahi argued that Article 164(3) of the Constitution of Kenya, 2010 confines the Court to hearing appeals only, rendering Rule 5(2)(b) applications and sections 3(1) and 3(2) of the Appellate Jurisdiction Act unconstitutional. All five judges - Githinji, Musinga, Kiage, M'inoti and Sichale JJ.A - wrote separate rulings but unanimously dismissed the objection. They held that while a Rule 5(2)(b) application is not itself an appeal, it is an interlocutory application within an appeal, anchored in a Notice of Appeal, and therefore compatible with the Court's purely appellate jurisdiction. Article 164(3) must be read purposively under Article 259; a literal reading would emasculate the Court and defeat access to appellate justice. Sections 3(1) and 3(2) of the Appellate Jurisdiction Act were found constitutional, being saved by the Sixth Schedule and merely backing powers incidental to appeals. The Court also affirmed its inherent power, recognised in Rule 1(2) of the Rules and section 3A of the Civil Procedure Act, to grant interim relief for the ends of justice. The preliminary objection was dismissed with costs to Equity Bank Limited, the judges also urging expeditious prosecution of appeals to prevent abuse of stay orders.

Key legal issues

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01

Whether Rule 5(2)(b) applications fall within the appellate jurisdiction conferred by Article 164(3)

Holding

Yes. Though not an appeal in the strict sense, a Rule 5(2)(b) application is an interlocutory application within, and incidental to, an appeal once a Notice of Appeal is filed, and is not incompatible with the Court's purely appellate jurisdiction.

Reasoning

All five judges agreed that the Constitution confers only appellate jurisdiction, but held that procedural law deems a Notice of Appeal to institute an appeal, and Rule 2 defines an appeal to include an intended appeal. The jurisdiction to grant interim preservation is anchored in the appeal, has no independent existence, and is complementary to the appellate function. The Constitution contains no express or implied prohibition on interlocutory applications within an appeal, and purposive interpretation under Article 259 forbids a reading that would emasculate the Court.

p. 6
02

Constitutionality of sections 3(1) and 3(2) of the Appellate Jurisdiction Act

Holding

The provisions are constitutional. Section 3(1) is saved by Article 7(1) of the Sixth Schedule and the statutory filtering of appeals is a permissible limitation; section 3(2) merely repeats the competencies the Court exercises in dealing with appeals.

Reasoning

The Court held that the Constitution's conferment of appellate jurisdiction does not fling open the doors of the Court to every High Court decision; a filtering mechanism is necessary. Pre-2010 statutes remain in force subject to conformity with the Constitution. The use of 'power' and 'authority' in section 3(2) is not offensive, and the words 'for all purposes of and incidental to' give statutory backing to all incidental applications, including extensions of time, additional evidence, leave and withdrawal applications.

p. 28
03

Inherent power of the Court to grant interim orders

Holding

Yes. Inherent jurisdiction is the unwritten, innate power of a superior court, recognised but not conferred by Rule 1(2) of the Court of Appeal Rules and section 3A of the Civil Procedure Act, and would sustain stay orders even absent Rule 5(2)(b).

Reasoning

The Court reasoned that courts exist to administer justice and must prevent their processes being abused or their judgments rendered nugatory. Inherent power enables the Court to intervene ex debito justitiae where execution would render an appeal futile. It rejected the submission that inherent jurisdiction is a blank cheque, holding it is a necessary attribute of a superior court that cannot be curtailed as long as courts remain courts.

p. 34
04

Approach to interpretation of Article 164(3) of the Constitution

Holding

Article 164(3) must be interpreted purposively in accordance with Article 259, promoting the Constitution's purposes, values and principles, rather than according the words 'to hear appeals' a narrow literal reading.

Reasoning

The Court adopted the Supreme Court's guidance that the Kenyan Constitution fuses legalistic drafting with declarations of principle, requiring an open mind. A literal reading would produce absurdities and reduce the Court of Appeal to an emasculated shell incapable of guaranteeing access to appellate justice under Articles 48, 159 and 10. Pre-2010 literalist authority such as Elmann must be applied subject to Article 259.

p. 43

Legal principles established

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  • The Court of Appeal has jurisdiction under Article 164(3) of the Constitution to entertain and grant applications for stay of execution, injunctions and stays of proceedings under Rule 5(2)(b) of the Court of Appeal Rules, such applications being interlocutory incidents of its appellate jurisdiction
  • Sections 3(1) and 3(2) of the Appellate Jurisdiction Act are constitutional and do not offend Article 164(3)
  • Once a notice of appeal is lawfully filed, an appeal is deemed to be in existence and the Court may entertain a Rule 5(2)(b) application before the record of appeal is lodged
  • A superior court possesses inherent power, recognised but not conferred by Rule 1(2) of the Court of Appeal Rules and section 3A of the Civil Procedure Act, to grant interim orders necessary for the ends of justice, including stay of execution pending appeal

Court orders

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  1. 1.The preliminary objection to the Court's jurisdiction under Rule 5(2)(b) is dismissed
  2. 2.Costs of the preliminary objection are awarded to the applicant, Equity Bank Ltd
On appeal from
High Court of Kenya at Nairobi
H.C.C.C. No. 142 of 2009
Jurisdiction invoked
Article 164(3) of the Constitution of Kenya, 2010 and Rule 5(2)(b) of the Court of Appeal Rules; Article 163(7) re the binding force of Supreme Court decisions

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (9)

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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, "Equity Bank Limited v West Link Mbo Limited (Civil Application 78 of 2011)  (Civ) [2013] KECA 320 (KLR)", Case Analysis (2013). Civil Application 78 of 2011 (UR. 53/2011). Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2013/320/eng@2013-05-31

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