Cieni Plains Company Limited & 2 Others v Ecobank Kenya Limited
The bottom line
#Kenya's Court of Appeal stopped Ecobank from selling most of the borrowers' land, but only if they pay KSh. 120 million within set deadlines.
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 and not frivolous
- 2.Whether the success of the intended appeal would be rendered nugatory if the injunction sought is not granted
Key legal issues
#Arguability of the intended appeal
The intended appeal was arguable on grounds concerning tacking and consolidation of facilities, land control board consent, validity of the statutory notice, final findings at interlocutory stage, and lis pendens.
The court found the issues raised capable of being argued fully and not frivolous, singling out the tacking issue, the propriety of the trial court's final findings in an interlocutory ruling, and the continuing applicability of lis pendens after the 2012 repeal of section 52 of the Indian Transfer of Property Act.
Nugatory value of the appeal
The second limb was satisfied only to the extent of conditional injunctory relief; uniqueness of secured property is not a ground for injunction, but the ripple effect of auction justified a balance.
The court held that properties offered as commercial security are always anticipated to be alienated, and courts are slow to tie the hands of lending institutions. However, the ripple effect of an auction on tenants and other creditors, and the illegality pleading, justified conditional relief preserving the subject matter pending appeal.
Illegality and the right to retain benefits of an unlawful act
A wrongdoer is not entitled to keep what is acquired contrary to law simply because he can pay for it, per Aikman vs Muchoki; the issue was left at large for the main appeal.
Because there was a pleading of illegality, the court noted that damages might not be an adequate remedy, citing Aikman vs Muchoki, but declined to make definitive findings, leaving the question open for determination in the main appeal.
Legal principles established
#- An applicant under Rule 5(2)(b) must satisfy both twin principles: an arguable appeal and that the appeal would be rendered nugatory absent the order.
- A single bona fide arguable ground suffices on the first limb.
- A Rule 5(2)(b) court must not make definitive findings of fact or law at the interlocutory stage.
- No injunction will issue in respect of property already sold; the court cannot act in vain.
Court orders
#- 1.Injunction issued in terms of the applicants' prayer, except for LR No. Nyeri/Naromoru/1174, restraining the respondent from selling or interfering with the remaining properties
- 2.Applicants to pay Ksh.20,000,000 into the Cieni Plains account with Ecobank within 30 days
- 3.Applicants to deposit Ksh.100,000,000 into an interest-earning joint account of counsel within 60 days
- 4.If conditions (a) and (b) are complied with, costs of the application to abide the result of the intended appeal
- 5.If conditions are not complied with, the order lapses forthwith and applicants bear the full costs of the application
The bench
#One judgment of the whole court — no separate or dissenting opinions.
- On appeal from
- High Court of Kenya at Nairobi
- Civil Case No. 316 of 2016
- Jurisdiction invoked
- Rule 5(2)(b) of the Court of Appeal Rules
Relief refused
#Injunction in respect of LR No. Nyeri/Naromoru/1174
The property had already been auctioned; the court cannot act in vain
Costs
Conditional: if the payment conditions are complied with, costs of the application abide the result of the intended appeal; if not, the order lapses and the applicants bear the full costs of the application.
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.
Accordingly an injunction shall issue in terms of the prayer made by the applicants, except for LR. No. Nyeri/Naromoru/1174, on the following terms:
If conditions (a) and (b) or any of them are not complied with, this order shall lapse forthwith, without further recourse to court, and the applicants shall bear the full costs of the application.
No injunction can issue in respect of that property as it is overtaken by events and the Court cannot act in vain.
there is always anticipation of alienation where properties are offered as security in a commercial transaction.
Issues in the judgment
#Same case cited with two different citations
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.
- Marteve Guest House Limited v Njenga & 3 others[2022] KECA 539 (KLR)28 Apr 2022
Cite this brief
#Cite this brief
Caselaw, "Cieni Plains Company Limited & 2 Others v Ecobank Kenya Limited", Case Analysis (2018). Civil Application No. NAI 135 of 2017 (UR 103/2017). Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2018/866/eng@2018-01-19
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.