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Court of AppealAllowedCivil Application No. NAI 132 of 2017· [2017] KECA 62 (KLR)

Kiru Tea Factory Company Ltd v Kenya Tea Development Agency Holdings & another [2017] KECA 62 (KLR)

Court of Appeal
20 December 2017
3,892 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
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The bottom line

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Kenya's Court of Appeal halted KTDA tea sector elections and appointments, ruling that disputed company offices and board seats must stay frozen until the appeals are heard.

What this practically means

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Executive summary

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This is a ruling of the Court of Appeal at Nairobi (G.B.M. Kariuki, Sichale and ole Kantai, JJ.A) on two consolidated applications under Rule 5(2)(b) of the Court of Appeal Rules, seeking injunctions pending the hearing and determination of intended appeals from a ruling of Matheka, J of the High Court at Nyeri delivered on 15 November 2017. The High Court had upheld a preliminary objection, held that it had no jurisdiction because Milimani High Court Civil Suit No. 106 of 2017 was pending, struck out the application with costs, and found the 1st respondent a non-legal entity incapable of being sued. Kiru Tea Factory Company Limited (Civil Application No. 132 of 2017) sought to restrain the KTDA respondents from convening meetings, nominating directors and related acts; Geoffrey Chege Kirundi (Civil Application No. 133 of 2017) sought to restrain confirmation of nominations to the KTDA-HL Board for Zone 3. Applying the settled twin principles from Stanley Kinyanjui v Tony Ketter — arguable appeal and nugatory-oss — the court found both intended appeals arguable, noting the unresolved dispute over who legitimately holds the office of KTFC Company Secretary and the Attorney General's confirmations. It distinguished Cortec Mining, holding that a Rule 5(2)(b) injunction does not depend on orders the High Court could have granted. Finding that the threatened elections would render the appeals meaningless, the court allowed both applications, granted the orders sought, and directed that costs abide the outcome of the appeals. The decision below was not itself disturbed; this ruling preserved the position pending appeal.

Key legal issues

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01

Whether the intended appeals were arguable

Holding

The court found both intended appeals arguable, noting competing claims to the office of Company Secretary of KTFC and other arguable points in the draft memorandum of appeal.

Reasoning

The court observed evidence of a 'war of attrition' over the Company Secretary position, with the Attorney General's office confirming Bernard Kiragu Kamau as duly appointed, while the respondents' documentation supporting John Kennedy Omanga lacked official records from the Attorney General. At the interlocutory stage, definitive findings could not be made, but the dispute raised a bona fide arguable issue, and the draft memorandum exemplified other arguable points of law.

p. 4
02

Whether the appeals would be rendered nugatory without the injunctions

Holding

The court held that unless the respondents were restrained from conducting the elections and related acts, the appeals would be rendered meaningless and their purpose defeated.

Reasoning

The court reasoned that the threatened general meetings, elections and nominations would effect irreversible changes to KTFC's Board and Company Secretaryship, defeating the object of the appeals if they ultimately succeeded. It therefore concluded that the nugatory limb was satisfied and granted the orders sought in both consolidated applications.

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03

Applicability of Cortec Mining Kenya Ltd to Rule 5(2)(b) applications arising from judicial review proceedings

Holding

The court distinguished Cortec, holding it did not bar the injunctions sought because these applications impugned a decision that the High Court had no jurisdiction.

Reasoning

Counsel for the respondents had relied on Cortec for the proposition that this court can only grant what the High Court could have granted. The court distinguished Cortec: here the Rule 5(2)(b) applications impugned a finding of lack of jurisdiction, and an order under Rule 5(2)(b) serves the interest of justice without necessarily bearing on the final outcome of the appeal.

p. 4

Legal principles established

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  • An applicant under Rule 5(2)(b) must satisfy the twin principles of an arguable appeal and that the appeal will be rendered nugatory if the order sought is not granted; a single bona fide arguable ground suffices.
  • An injunction under Rule 5(2)(b) is not related to the substance of the appeal and does not depend on whether the High Court could have granted equivalent orders in the underlying proceedings.

Court orders

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  1. 1.Allowance of both consolidated applications Nos. 132/2017 and 133/2017
  2. 2.Grant of the injunction orders sought in application No. 132/2017 restraining KTDA-HL and KTDA-MS from convening or conducting a general meeting of KTFC, nominating directors or Tea Buying Centre Committees and related acts pending the hearing and determination of the intended appeal
  3. 3.Grant of the order sought in application No. 133/2017 restraining KTDA-HL from holding, confirming the nomination of or nominating the victor in the elections for zonal representative to KTDA-HL's Board of Directors for Zone 3
  4. 4.Costs of the applications to abide the outcome of the appeals

Authorities

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Legislation

  • Court of Appeal RulesRule 5(2)(b)
  • Court of Appeal RulesRule 75

Cases cited (5)

  • Butt v Rent Restriction Tribunal
    [1982] KLR 417
  • Kenya Shell Ltd v. Kabiru & Another
    [1986] KLR 410
  • Multimedia University & Another versus Prof Gitile N. Naituli
    [2014] eKLR
  • Stanley Kangethe Kinyanjui vs Tony Ketter & Others
    [2013] eKLR
  • Cortec Mining Kenya Ltd Versus Cabinet Secretary, AG & 8 Others
    [2015] eKLR
On appeal from
High Court of Kenya at Nyeri
H.C.C.C. No. 18 of 2017 (and JR Application No. 5 of 2017)
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, "Kiru Tea Factory Company Ltd v Kenya Tea Development Agency Holdings & another [2017] KECA 62 (KLR)", Case Analysis (2017). Civil Application No. NAI 132 of 2017. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2017/62/eng@2017-12-20

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