Abdulkadir Shariff Abdirahim v Ecobank Kenya Limited [2015] KECA 737 (KLR)
The bottom line
#Kenya's Court of Appeal refused to protect a property from sale because the owner couldn't prove the bank could not compensate him in damages.
What this practically means
#Executive summary
#Questions the Court framed
#The issues the Court set itself to decide, in its own words.
- 1.Whether the intended appeal is arguable so as to satisfy the first limb of the rule 5(2)(b) test
- 2.Whether the intended appeal would be rendered nugatory if the injunction is not granted, so as to satisfy the second limb
- 3.Whether an order striking out a suit is a negative order incapable of being stayed by injunction or stay under rule 5(2)(b)
Key legal issues
#Arguability of the intended appeal
The intended appeal was arguable on the grounds that the learned Judge invoked res judicata to terminate both the suit and the interim application and on whether he exercised his discretion judiciously, but arguability alone does not secure relief
The court examined the grounds on which the applicant intended to appeal against Havelock J's ruling striking out the suit as res judicata. It found that the challenge to the invocation of res judicata and to the exercise of discretion raised bona fide issues worthy of consideration, satisfying the first limb. However, the first limb alone is insufficient; both limbs must be demonstrated before relief under rule 5(2)(b) can issue.
The nugatory limb and burden of rebuttal
The applicant failed to discharge the burden of rebutting the respondent's assertion that the value of the subject matter could be computed and paid for as damages, so the second limb failed
A legal duty rests on the applicant to prove the appeal will be rendered nugatory because the respondent will be unable to pay back the value of the subject matter. That duty is qualified: once the respondent asserts ability to make good the value in damages, the burden shifts to the applicant. The applicant gave no rebuttal by way of further affidavit despite being granted liberty to file one, so the nugatory limb was not satisfied.
Whether a striking-out order is a negative order incapable of being stayed
An order striking out a suit and an interlocutory application requires no party to do or refrain from doing anything and is therefore a negative order that cannot be stayed under rule 5(2)(b)
Following Shimmers Plaza Limited v National Bank of Kenya Limited and the Republic v Kenya Wildlife Services decisions, the court reasoned that rule 5(2)(b) permits only stays of proceedings, stays of execution and injunctions against enforceable orders. Havelock J's order struck out the entire suit and attendant application as res judicata; it imposed no positive or negative obligation on any party, so there was nothing capable of being stayed or enjoined.
Legal principles established
#- An applicant under rule 5(2)(b) must satisfy both limbs - that the appeal is arguable and that it will be rendered nugatory - before relief can be granted
- When a respondent asserts ability to make good the value of the subject matter in damages, the burden shifts to the applicant to rebut that assertion
- A negative order - one that does not require any party to do or refrain from doing anything - cannot be stayed by injunction or stay of execution under rule 5(2)(b)
- Under rule 5(2)(b) the Court of Appeal can only make three orders: stay of proceedings, stay of execution of the superior court's order, or an injunction as spelt out in the rule
Court orders
#- 1.The applicant's application under rule 5(2)(b) for an injunction pending an intended appeal is dismissed
- 2.The costs of the application to abide the outcome of the appeal
The bench
#One judgment of the whole court — no separate or dissenting opinions.
- On appeal from
- High Court of Kenya at Nairobi (Milimani Commercial Court's and Tax Division)
- H.C.C. No. 7 of 2013 (former H.C. ELC No. 1023/2013)
- Jurisdiction invoked
- Rules 5(2)(b), 41 and 75 of the Court of Appeal Rules and sections 3A and 3B of the Appellate Jurisdiction Act (Cap 9)
Relief refused
#Injunction restraining the respondent from selling, disposing of, transferring or interfering with LR. No.209/11067/22 pending the intended appeal
The applicant failed to prove the appeal would be rendered nugatory since the value of the subject matter can be computed and paid as damages, and the order sought to be stayed is a negative order incapable of being stayed
Liberty to apply for further orders and/or directions
It is alien to the species of reliefs available under rule 5(2)(b)
Costs
The costs of the application to abide the outcome of the appeal.
Quotable passages
#Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.
It is now trite that in order for an applicant to succeed under rule 5(2) (b), both limbs must be satisfied.
the moment the respondent asserts his ability to make good the value of the subject matter should the applicant appeal succeed, then the burden shifts to the applicant to rebut that assertion.
Under rule 5(2) (b) this Court can only make three orders, namely an order staying proceedings, an order staying execution of the superior courts' order and lastly, an injunction order as clearly spelt out in that rule
The upshot of the above is that we find no merit in the applicant's application under review. It is dismissed in the first instance because it has not met the thresh hold for the granting of the relief under rule 5(2) (b) of this Court's Rules. And in the second instance because it seeks to stay a negative order incapable of being stayed. The costs of the application to abide the outcome of the appeal.
Issues in the judgment
#The judgment refers to the appeal being against a 'dismissal order' in places while elsewhere describing the order as striking out the suit; the applicant argued the distinction matters
The case name for Equity Bank Ltd is rendered inconsistently in the judgment ('West Link NBO') and citation details are incomplete
The judgment refers to National Credit Bank Ltd v Wasike with '(supra)' although that case had not previously been cited in the ruling
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Abdulkadir Shariff Abdirahim v Ecobank Kenya Limited [2015] KECA 737 (KLR)", Case Analysis (2015). Civil Application No. NAI 228 of 2013 (UR. 164/2013). Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2015/737/eng@2015-05-08
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.