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Court of AppealAllowedCivil Application No. 183 of 2014· [2014] KECA 208 (KLR)

Africa Eco-Camps Limited v Exclusive African Treasurers Limited [2014] KECA 208 (KLR)

Court of Appeal
28 November 2014
3,127 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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Kenya's Court of Appeal stopped execution of a judgment pending appeal, confirming that once you show the winner can't repay, they must prove they can.

What this practically means

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Executive summary

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The applicant, Africa Eco-Camps Limited, was sued by Exclusive African Treasurers Limited, which obtained an ex parte merit judgment dated 18th January 2012 after the applicant failed to attend the hearing. A subsequent application for leave for new counsel, stay of execution, and setting aside or review of the ex parte judgment was dismissed in its entirety by the High Court (Mabeya, J.) in a ruling dated 5th March 2014. The applicant filed a notice of appeal and moved the Court of Appeal under rule 5(2)(b) of its Rules for stay of execution pending the lodging, hearing and determination of an intended appeal. The court restated the settled principles governing such applications: the jurisdiction is original, independent and discretionary; it arises only where a notice of appeal has been lodged; the applicant must demonstrate both that the intended appeal is arguable and that it would be rendered nugatory if stay is denied; and a single bona fide arguable point suffices. The court found the intended appeal arguable. On the nugatory limb, it applied the qualified evidential burden from National Industrial Credit Bank Ltd v Wasike: once an applicant shows a reasonable fear that a respondent cannot refund the decretal sum, the burden shifts to the respondent to demonstrate its resources. The respondent relied on a 2012 balance sheet, which the court held did not prove continued viability in 2014, and the applicant offered to deposit the decretal sum in a joint interest-earning account. The court allowed the application conditionally, ordering stay of execution upon deposit of the decretal amount in a joint interest-earning account within 14 days, with costs of the application to abide the outcome of the intended appeal.

Key legal issues

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01

Arguability of the intended appeal

Holding

The grounds intended for appeal, including the claim that the applicant was condemned unheard and the principles on setting aside ex parte judgments and assessment of damages, were arguable.

Reasoning

The court considered the nine grounds in the application and found them bona fide and worthy of consideration. It reiterated that an arguable appeal is not one that must ultimately succeed; a single arguable point suffices under rule 5(2)(b). The intended appeal was held not to be frivolous.

p. 3
02

Whether the appeal would be rendered nugatory absent stay

Holding

The applicant's reasonable fear that the respondent could not refund the decretal sum shifted the evidential burden to the respondent; the respondent's 2012 records did not allay that fear, so the nugatory limb was satisfied.

Reasoning

The applicant showed the main shareholder was a British citizen with no known attachable assets in Kenya. The respondent relied only on a 2012 balance sheet; the court held the respondent could have provided current records before it, and noted the applicant's offer to deposit the decretal sum in a joint interest-earning account as adequate protection.

p. 5

Legal principles established

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  • The jurisdiction of the Court of Appeal under rule 5(2)(b) is original, independent and discretionary, and arises only where the applicant has lodged a notice of appeal.
  • An arguable appeal need not be one that must succeed; a single bona fide arguable point suffices.
  • Both limbs (arguability and nugatory-ness) must be demonstrated before relief under rule 5(2)(b) can be granted.
  • Once an applicant expresses a reasonable fear that the respondent cannot refund the decretal sum, the evidential burden shifts to the respondent to show what resources it has.

Court orders

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  1. 1.Stay of execution of the judgment and decree pending the lodging, hearing and determination of the intended appeal, on condition that the decretal amount is deposited in an interest earning account in the joint names of advocates for both parties within 14 days of the date of the ruling, if not already deposited in terms of this Court's order of 22nd September 2014
  2. 2.The costs of the application to abide the outcome of the intended appeal

Authorities

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Legislation

  • Civil Procedure Actsections 1A, 1B, 3A, 63(e), 34, 80
  • Civil Procedure RulesOrder 9 rule 16, Order 12 rule 7, Order 21 rule 22, Order XLIV
  • Court of Appeal Rulesrule 5(2)(b), rule 75(2)

Cases cited (11)

  • National Industrial Credit Bank Ltd. v. Aquinas Francis Wasike & another
    [2006] eKLR
  • Kenya Revenue Authority and 2 others v. King-Bird (Kenya) Ltd
    [2014] eKLR
  • Freight in time Ltd v. Rosebell Wambui Muthee
    [2014] eKLR
  • Githunguri v. Jimba Credit Corporation Ltd No. (2)
    [1988] KLR 88
  • Equity Bank Ltd v. West Link MBO Civil Application No.78 of 2011 (UR)
    Civil Application No. 78 of 2011 (UR)
  • Safaricom Ltd v. Ocean View Beach Hotel Ltd & 2 others
    Civil Application No. 327 of 2009 (UR)
  • Kenya Tea Growers Association & another v. Kenya Planters Agricultural Workers Union
    Civil Application No. NAI 72 of 2001 (UR)
  • Kenya Railways Corporation v. Edermann Properties Ltd.
    Civil Appeal No. NAI 176 of 2012
  • Ahmed Musa Ismael v. Kumba Ole NTAMORUA & 4 others
    Civil Appeal No. NAI 256 of 2013
  • Republic v. Kenya Anti-Corruption Commission & 2 others
    [2009] KLR 31
  • Reliance Bank Ltd v. Norlake Investments Ltd.
    [2012] 1 EA 227
On appeal from
High Court of Kenya at Nairobi, Milimani Commercial and Admiralty Division
Civil Case No. 378 of 2008
Jurisdiction invoked
Rule 5(2)(b) of the Court of Appeal Rules

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, "Africa Eco-Camps Limited v Exclusive African Treasurers Limited [2014] KECA 208 (KLR)", Case Analysis (2014). Civil Application No. 183 of 2014. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2014/208/eng@2014-11-28

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