Velji Narshi Shah v Kanti Narshi Shah & 2 others [2016] KECA 778 (KLR)
The bottom line
#Kenya's Court of Appeal paused collection of a Shs.5 million arbitral award, confirming one arguable legal point is enough for a stay.
What this practically means
#Executive summary
#Key legal issues
#Whether the intended appeal is arguable
The appeal is arguable because the High Court ruling did not focus on Section 37(1) of the Arbitration Act, which sets out grounds for refusal of recognition or enforcement of an arbitral award, but instead dealt with Section 35 on setting aside.
The applicant had placed an affidavit before the High Court objecting to recognition of the arbitral award. Section 37(1) governs grounds for refusal of recognition or enforcement, but the High Court addressed Section 35(1) on setting aside and held the affidavit was not an application under that section. Without deciding merits, the Court found the appeal not frivolous and arguable on that single point.
Whether the appeal would be rendered nugatory if stay is not granted
Yes - the Shs.5 million demanded is considerable and it is not clear the respondents could refund it if the appeal succeeds.
Execution processes, including a warrant of sale of movable property and a notice to show cause, had commenced against the applicant for over Shs.5 million. If he paid and could not recover the money upon a successful appeal, his appeal would be a Pyrrhic victory. The applicant thus satisfied the second (nugatory) principle.
Jurisdiction of the Court over the intended appeal from adoption of an arbitral award
The Court did not make a definitive ruling on jurisdiction but implicitly proceeded to entertain the Rule 5(2)(b) application, and criticized counsel for not submitting on the issue.
The respondent contended there was no jurisdiction, citing Nyutu Agrovet, arguing appeals on arbitral awards lie only on points of law under Section 39 of the Arbitration Act. The applicant's counsel left the issue to the Court. The Court noted counsel should have submitted on jurisdiction, but proceeded to consider and grant stay, effectively assuming jurisdiction for the interlocutory application.
Legal principles established
#- An applicant under Rule 5(2)(b) must first show an arguable appeal, and secondly that if stay is not granted the appeal, if successful, will be rendered nugatory.
- A single arguable point suffices; the appeal need not be one that is bound to succeed.
- In assessing arguability the court will not delve into the merits of the intended appeal.
- The twin principles for stay balance the successful litigant's fruits of judgment against the aggrieved litigant's right of appeal.
Court orders
#- 1.Stay of execution of the ruling and decree in Miscellaneous Civil Application No. 690 of 2003 in the High Court at Milimani Law Courts, Nairobi pending the hearing and determination of Appeal No. 224 of 2011
- 2.Stay conditional on the applicant depositing in the Court within 30 days from the date of delivery of the ruling the sum of Shs. 1,700,000
- 3.Each party to bear its own costs of the application
- On appeal from
- High Court of Kenya at Nairobi
- H.C.MISC No. 690 of 2003
- Jurisdiction invoked
- Rule 5(2)(b) of the Court of Appeal Rules (application for stay of execution pending intended appeal)
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.
- Teresia Kamene King’oo v Harun Edward Mwangi [2016] KECA 566 (KLR)[2016] KECA 566 (KLR)19 May 2016applied
Cite this brief
#Cite this brief
Caselaw, "Velji Narshi Shah v Kanti Narshi Shah & 2 others [2016] KECA 778 (KLR)", Case Analysis (2016). Civil Application No. NAI 248 of 2012 (UR 179/2012). Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2016/778/eng@2016-02-12
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.