Skip to content
AI-generated case briefs sourced from Kenya Law · Not legal advice
Caselaw
AI-generated case brief
Case Brief · caselaw.co.ke
Court of AppealDismissedCivil Application 224 of 2011· [2013] KECA 343 (KLR)

James Juma Muchemi & Partners Limited v Barclays Bank of Kenya Limited & another [2013] KECA 343 (KLR)

Court of Appeal
12 April 2013
AVAlnashir VisramRNR. N. NambuyeWKW. Karanja
1,012 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~4 min to read original · ~4 min brief

The bottom line

#

Kenya's Court of Appeal refused to stop Barclays Bank from selling a Nakuru property because the debt was admitted in writing and money could compensate any loss.

What this practically means

#

Executive summary

#
The applicant, owner of two parcels of land in Nakuru (L.R. No. Nakuru Municipality Block 11/649 and 11/650), borrowed funds from Barclays Bank of Kenya to develop a shopping mall, defaulted on the loan, and faced an intended sale of the properties by private treaty. It moved the Court of Appeal under rule 5(2)(b) of the Court of Appeal Rules for an injunction pending an intended appeal against a ruling of Njagi, J of the High Court (Commercial & Tax Division) dated 8th September 2011 in H.C.C.C. No. 339 of 2011, which had granted a conditional injunction. The applicant argued breach of the financing agreement, clogging of its equity of redemption, an ignored arbitration clause in a deed of settlement, and lack of statutory notice. The bank countered that the debt of Kshs.398 million was admitted in the deed of settlement, the applicant had made no repayments for over a year, and the deed permitted sale. Applying the settled twin principles - arguability of the appeal and whether its success would be rendered nugatory - the court expressed doubts about arguability given the admitted indebtedness, and held that in any event the claim was compensable in damages since the property was easily valued. The court dismissed the notice of motion dated 16th September 2011 with costs to the 1st respondent. The ruling is a single judgment of the full bench of three judges, delivered at Nairobi on 12th April 2013.

Key legal issues

#
01

Test for grant of injunction pending appeal under rule 5(2)(b)

Holding

The twin principles are arguability of the appeal and the nugatory-ness of its success; the applicant failed on both limbs.

Reasoning

The court restated the settled principles from Ishmael Kagunyi Thande v Housing Finance of Kenya Ltd and Githunguri v Jimba Credit Corporation Ltd. It expressed skepticism about the arguability of the appeal given the admitted indebtedness of Kshs.398 million in a deed of settlement. Even assuming arguability, the property was easily valued and damages would compensate, so no nugatory outcome would follow.

p. 2
02

Whether the applicant had admitted indebtedness

Holding

The deed of settlement dated 11th March, 2011 evidenced an admitted indebtedness of Kshs.398 million, undermining the arguability of the intended appeal.

Reasoning

The court found overwhelming evidence of indebtedness admitted in the deed of settlement, excluding legal fees and costs of recovery. The bank contended the deed allowed it to sell the property and that there was no dispute capable of arbitration. The court regarded this as casting serious doubt on the merits of the intended appeal.

p. 2

Legal principles established

#
  • An applicant under rule 5(2)(b) must demonstrate both that the appeal or intended appeal is arguable and that its success will be rendered nugatory unless the injunction or stay is granted.

Court orders

#
  1. 1.Dismissal of the notice of motion dated 16th September, 2011
  2. 2.Costs of the application awarded to the 1st respondent

Authorities

#

Legislation

  • Court of Appeal RulesRule 5(2)(b)

Cases cited (4)

  • Vanessa Gathoni Kamau vs Bank of India
    Civil Appl. No. 264 of 2008 (UR 169/2008)
  • Ishmael Kagunyi Thande vs Housing Finance of Kenya Ltd
    Civil application No. Nai 157 of 2006 (unreported)
  • Githunguri vs Jimba Credit Corporation Ltd, No. 2
    (1988) KLR 838
  • J. K. Industries Ltd vs Kenya Commercial Bank Ltd
    (1982 – 1988)
On appeal from
High Court of Kenya at Nairobi (Commercial & Tax Division)
H. C. C. No. 339 of 2011
Jurisdiction invoked
Rule 5(2)(b) of the Court of Appeal Rules

Key timeline

#

Practical implications

#

Frequently asked questions

#

Cite this brief

#

Cite this brief

Caselaw, "James Juma Muchemi & Partners Limited v Barclays Bank of Kenya Limited & another [2013] KECA 343 (KLR)", Case Analysis (2013). Civil Application 224 of 2011. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2013/343/eng@2013-04-12

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