Invesco Assurance Company Limited v David Kabubii Kuria [2014] KECA 528 (KLR)
The bottom line
#Kenya's Court of Appeal refused to pause a company dispute because an arguable appeal alone isn't enough; the insurer also had to prove the appeal would be worthless without a stay.
What this practically means
#Executive summary
#Key legal issues
#Whether the intended appeal challenging the refusal to stay the suit pending arbitration was arguable
The court found the intended appeal arguable, revolving around the interplay between Sections 6 and 7 of the Arbitration Act and the parties' contractual dispute-resolution provisions, but arguability alone did not warrant a stay.
The draft memorandum raised searching questions about the proviso to Clause 24.1 of the shareholders' agreement, its relationship to Clause 24.2 and Section 7(1) of the Arbitration Act, and whether commencing a suit by plaint with a motion for interim relief invalidated the interim prayers. The court expressly declined to assess chances of success, which it said is the province of the appellate court seized of the appeal.
Whether the success of the intended appeal would be rendered nugatory absent a stay of further proceedings
The nugatory test was not satisfied: the High Court proceedings would go no further than consideration of the interlocutory injunction motion, and stay of the main suit could still be granted later, so the appeal would not be rendered nugatory.
The court noted it was common ground that arbitration provisions existed, and the High Court itself had remarked that the plaintiff could expect his dispute to be referred to arbitration one way or another. Whatever happened in the High Court would be confined to the injunction motion; orders for stay of the main suit and reference to arbitration could still issue thereafter, either from the High Court or from the Court of Appeal in the course of the intended appeal. The regulated nature of the insurance business did not change this.
Legal principles established
#- An applicant under Rule 5(2)(b) must demonstrate both that the intended appeal is arguable (even on one bona fide issue) and that, if the order is not granted and the appeal succeeds, the success will be rendered nugatory.
Court orders
#- 1.The application for stay of further proceedings in HCCC No. 624 of 2012 pending the intended appeal is dismissed with costs
- On appeal from
- High Court of Kenya at Nairobi
- HCCC No. 624 of 2012
- Jurisdiction invoked
- Rule 5(2)(b) of the Court of Appeal Rules (application for stay of further proceedings pending intended appeal)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Invesco Assurance Company Limited v David Kabubii Kuria [2014] KECA 528 (KLR)", Case Analysis (2014). Civil Application No. NAI. 154 of 2013 (UR 103/2013). Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2014/528/eng@2014-06-20
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.