Darasa Investment Limited v Dubai Bank Kenya Limited (In Liquidation) [2019] KECA 693 (KLR)
The bottom line
#The Court of Appeal refused to pause High Court orders freezing Darasa Investment's assets because freezing alone, without disposal, causes no irreversible harm.
What this practically means
#Executive summary
#Key legal issues
#Whether the intended appeal was arguable
The intended appeal was arguable, based on complaints that the Judge failed to apply the legal principles governing Orders 39 and 40, that no risk of asset removal was shown, and that interlocutory orders were made on matters reserved for trial.
The Court assessed the draft memorandum of appeal complaints: the Judge allegedly did not apply the legal principles for Orders 39 and 40 applications, no risk of asset removal from jurisdiction was demonstrated, and interlocutory decisions were made on matters properly reserved for trial. Complaints of this nature, if arguable, satisfy the first limb.
Whether the intended appeal would be rendered nugatory absent a stay
The nugatory limb was not satisfied because the impugned orders only permit tracing and freezing of assets, not their disposal, and the applicant did not show how the freezing would paralyse its operations.
The Court distinguished between orders permitting disposal and orders of tracing and freezing. Since the impugned orders do not permit disposal, no irreversible loss was demonstrated. The applicant did not identify the assets, or explain what its operations were or how freezing would affect them, so the second limb of the Rule 5(2)(b) test failed.
Legal principles established
#- To succeed on an application under Rule 5(2)(b), an applicant must demonstrate both that the intended appeal is arguable and that the appeal will be rendered nugatory unless the orders sought are granted.
- An arguable appeal need not necessarily succeed; it is sufficient that it is deserving of the Court's consideration.
- Rule 5(2)(b) is a procedural innovation empowering the Court to entertain interlocutory applications for preservation of the subject matter of appeals.
Court orders
#- 1.The application for stay of execution pending the hearing and determination of the intended appeal was dismissed
- 2.No order as to costs
- On appeal from
- High Court of Kenya at Nairobi
- HCCC No. 145 of 2017
- Jurisdiction invoked
- Sections 3A and 3B of the Appellate Jurisdiction Act and Rule 5(2)(b) of the Court of Appeal Rules
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Darasa Investment Limited v Dubai Bank Kenya Limited (In Liquidation) [2019] KECA 693 (KLR)", Case Analysis (2019). Civil Application Number 301 of 2018. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2019/693/eng@2019-06-07
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.