Kwame Kariuki & another v Mohamed Hassnali Ali Mohamed Janmohamed & 2 others [2015] KECA 898 (KLR)
The bottom line
#Kenya's Court of Appeal paused a court order requiring a Kshs 6 million cash deposit, allowing a bank guarantee instead while the appeal is decided.
What this practically means
#Executive summary
#Questions the Court framed
#The issues the Court set itself to decide, in its own words.
- 1.Whether leave was required before the applicants could seek relief from the Court, given that decisions under Order 26 are appealable as of right
- 2.Whether the intended appeal is arguable
- 3.Whether the appeal, if successful, would be rendered nugatory absent a stay
Key legal issues
#Jurisdiction under rule 5(2)(b) upon filing of a notice of appeal
Filing of a notice of appeal confers jurisdiction on the Court for rule 5(2)(b) applications; leave was not required since decisions under Order 26 are appealable as of right under Order 43 rule 1.
The interested party's preliminary objection was that the applicants were non-suited because the arbitration proceedings were spent. The Court rejected this, holding that the notice of appeal suffices for jurisdiction and that Order 43 rule 1 makes decisions under Order 26 appealable as of right, so no leave was needed.
Arguability of the intended appeal
The intended appeal was arguable on whether the injunction barred the interested party from taking possession or only restrained further construction, whether security for costs of Kshs 6,000,000 could be ordered absent a substantive pleading, and whether the judge could extend preservatory orders suo moto.
The Court identified several issues raised by the applicants it considered worthy of consideration, including the scope of the injunction, the basis of the security for costs order, and the extent of the trial judge's power to extend preservatory orders beyond what the interested party had sought.
Nugatory-ness and the appropriate relief
Both parties stood to be prejudiced - the applicants would be deprived of Kshs 6,000,000 for a considerable period, while the interested party was kept out of possession - so a conditional stay secured by a bank guarantee best balanced the competing claims.
Applying the overriding objective principles in sections 3A and 3B of the Appellate Jurisdiction Act and proportionality, the Court found deprivation of the sum would expose the applicants' business to ruin if the appeal succeeded, but the interested party also deserved protection if it failed, justifying a bank guarantee rather than a cash deposit.
Legal principles established
#- The filing of a notice of appeal is what enables the Court to assume jurisdiction in an application under rule 5(2)(b), and it matters not that the notice may ultimately be struck off
- Both limbs of rule 5(2)(b) - arguability and nugatory-ness - must be established for relief to issue
- An arguable appeal need not be one that must succeed; a single bona fide arguable point suffices
Court orders
#- 1.Stay of execution of the ruling and order of 20th March 2014 granted on condition that the applicants provide a bank guarantee in the sum of Kshs 6,000,000
- 2.Costs of the application to abide the outcome of the intended appeal
The bench
#One judgment of the whole court — no separate or dissenting opinions.
- On appeal from
- High Court of Kenya at Nairobi
- ELC No. 599 of 2011
- Jurisdiction invoked
- Rules 2, 5(2)(b) and 47(1) & (2) of the Court of Appeal Rules
Relief refused
#Stay of execution on the terms sought (unconditional, or secured by cash deposit)
The Court substituted a conditional stay requiring a bank guarantee instead of the cash deposit ordered by the High Court
Costs
Costs of this application shall abide the outcome of the intended 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.
Considering all the circumstances of this application, the order that best commends itself to us is to grant stay of execution on condition that the applicants provide a bank guarantee in the sum of Kshs 6,000,000. Costs of this application shall abide the outcome of the intended appeal. It is so ordered.
To succeed, the applicant must establish both limbs.
it has been held without number that it is the filing of a notice of appeal, which enables this court to assume jurisdiction in an application under rule 5(2)(b).
The conditions to be met before a party can obtain a relief under rule 5(2) (b) are first that the appeal or the intended appeal is arguable.
Issues in the judgment
#The judgment contains numerous typographical errors, including 'Rule 592)(b)' for rule 5(2)(b) and inconsistent spellings of case names and parties' names
The coram lists 'M'INOTI' while the signature block reads 'K. M'INOTI'; the interested party's role is printed as 'INTEESTED PARTY/3RD RESPONDENT'
Key timeline
#Practical implications
#Frequently asked questions
#Later judgments citing this (1)
#Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.
Cite this brief
#Cite this brief
Caselaw, "Kwame Kariuki & another v Mohamed Hassnali Ali Mohamed Janmohamed & 2 others [2015] KECA 898 (KLR)", Case Analysis (2015). Civil Application No. Nai 209 of 2014 (UR 165/2014). Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2015/898/eng@2015-03-06
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.