Skip to content
AI-generated case briefs sourced from Kenya Law · Not legal advice
Caselaw
AI-generated case brief
Case Brief · caselaw.co.ke
Court of AppealPartially AllowedInterlocutory Civil Appeal from High Court at Eldoret, Judicial Review Application filed 15th September 2006

Central Bank of Kenya & another v Ratilal Automobiles Limited & 10 others (Civil Appeal 279 of 2006) [2018] KECA 31 (KLR)

Court of Appeal of Kenya
20 December 2018
EGE.M. GithinjiDMD.K. MusingaPKP.O. Kiage
4,455 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~18 min to read original · ~4 min brief

The bottom line

#

Kenya's Court of Appeal let a bank customers' judicial review case proceed, but cancelled sweeping orders that had blocked the Central Bank from doing its job.

What this practically means

#

Executive summary

#
This is a Court of Appeal judgment, delivered at Nairobi on 20th December 2018 by Githinji, Musinga and Kiage, JJA in a single unanimous judgment, in an interlocutory appeal pending nearly 12 years largely due to adjournments for settlement talks. The appeal arose from a ruling of Gacheche, J. of the High Court at Eldoret (15th September 2006) granting the 1st to 4th respondents, customers of Charterhouse Bank, leave to apply for 32 judicial review orders (mandamus, certiorari and prohibition) challenging the placement of the bank under statutory management by the Central Bank of Kenya, and directing that the leave operate as a stay. The Court framed two issues: whether leave was properly granted, and whether leave could properly operate as a stay. It affirmed the grant of leave, holding that the arguable-case threshold is low and the judge did not exercise her discretion injudiciously. However, it found the stay orders so wide, imprecise and far-reaching - effectively restoring control of the bank to its directors and restraining the CBK, KRA and the Kenya Bankers Association from their functions - that they amounted to an ex parte mandatory injunction the court had no jurisdiction to grant. The appeal partially succeeded: the order that leave operate as a stay was vacated and each party was ordered to bear its own costs of the appeal. The judgment binds subordinate courts on the limits of stay directions at the judicial review leave stage.

Key legal issues

#
01

Threshold for grant of leave to apply for judicial review

Holding

The High Court properly granted leave because the material showed an arguable case; at the leave stage the court is not required to go into the matter in depth or assess the bona fides or merits of the averments.

Reasoning

Judicial review leave is a filter for frivolous applications, not a merits hearing. The ex parte applicants supported their application with lengthy affidavits, annextures and a statutory statement challenging the legality of the appointment of the statutory manager. On that material the judge was entitled to find an arguable case, and an appellate court will not disturb that discretionary exercise absent misdirection.

p. 7
02

Whether leave may operate as a stay in terms so wide as to restrain statutory functions

Holding

The stay directed by the High Court was so wide, imprecise and far-reaching that it effectively reinstated the bank's directors in control and restrained the Central Bank and KRA from their statutory mandates; it exceeded the jurisdiction exercisable at the leave stage and had to be vacated.

Reasoning

The stay covered matters at the behest of CHB, an interested party that had made no application. It stayed transfer of funds, the bank's suspension from the Clearing House, investigations, audits and licence decisions. Its effect was equivalent to an ex parte mandatory injunction, which the court had no jurisdiction to grant at that stage, and the judge failed to consider the full import of the order.

p. 8

Legal principles established

#
  • The grant of leave to apply for judicial review is discretionary and must be exercised judiciously; at the leave stage the applicant need only show an arguable case and the court must not go into the matter in depth.
  • A direction that leave operate as a stay cannot be used as a device to grant what amounts to an ex parte mandatory injunction; such a stay must be capable of implementation and must not alter the status quo.

Court orders

#
  1. 1.The appeal partially succeeds to the extent that the order of stay (leave operating as a stay in terms of prayers 3(a) and 3(b) of the ex parte application) is vacated
  2. 2.The second limb of the High Court ruling directing that the grant of leave operate as a stay is set aside
  3. 3.Each party bears its own costs of the appeal
On appeal from
High Court of Kenya at Eldoret
Judicial Review application (ex parte) filed 15th September 2006
Jurisdiction invoked
First appellate jurisdiction over a High Court interlocutory ruling in judicial review proceedings (Order LIII of the Civil Procedure Rules framework then applicable)

Key timeline

#

Practical implications

#

Frequently asked questions

#

Later judgments citing this (2)

#

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, "Central Bank of Kenya & another v Ratilal Automobiles Limited & 10 others (Civil Appeal 279 of 2006) [2018] KECA 31 (KLR)", Case Analysis (2018). Interlocutory Civil Appeal from High Court at Eldoret, Judicial Review Application filed 15th September 2006. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2018/31/eng@2018-12-20

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