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Case Brief · caselaw.co.ke
Court of AppealAllowedCivil Appeal (Application) No. 526 of 2019· [2020] KECA 38 (KLR)

Metro Plaza Limited v Dubai Bank Kenya Limited (in liquidation) & 1 other

Court of Appeal
18 December 2020
531 words in judgment
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The bottom line

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Kenya's Court of Appeal froze the sale of valuable land until an appeal is heard, protecting the property from escaping to third parties.

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 (Kiage, M'Inoti and Murgor, JJ.A.) on a notice of motion dated 20th January 2020 by Metro Plaza Limited, brought under Rule 5(2)(b) of the Court of Appeal Rules in Civil Appeal (Application) No. 526 of 2019. The live prayer sought an injunction restraining Dubai Bank Kenya Limited (in liquidation) and SE & Sons Limited from selling, transferring, charging or otherwise dealing with LR NO. 209/2379 pending the hearing and determination of the appeal. The applicant contended that the court below erred in not setting aside the sale of the suit property to the 2nd respondent by the 1st respondent at a public auction, said to be unlawful and contemptuous of injunctive orders issued by Olga Sawe, J. in the presence of all parties, and that the appeal would be rendered nugatory if the valuable land escaped to third parties. The 2nd respondent admitted certain orders had been issued but asserted it had no notice of the court proceedings when it bought the property at auction, and that the validity of the sale should be interrogated at a full trial. Applying the settled Rule 5(2)(b) principles as captured in Stanley Kangethe Kinyanjui v Tony Keter & 5 Others, the Court found the appeal arguable and in peril of being rendered nugatory, and granted the application in terms of prayer (5), with costs abiding the outcome of the appeal. The judgment is binding on the High Court and subordinate courts as a statement of the twin Rule 5(2)(b) criteria.

Key legal issues

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Rule 5(2)(b) principles for injunctive relief pending appeal

Holding

The Court granted an injunction preserving the suit property because the applicant established both limbs of the Rule 5(2)(b) test: an arguable appeal and the prospect of the appeal being rendered nugatory.

Reasoning

The Court applied the two-pronged Rule 5(2)(b) test, as captured in Stanley Kangethe Kinyanjui v Tony Keter & 5 Others, requiring demonstration of an arguable appeal plus the nugatory-ness risk. Finding the appeal arguable and the suit property, being valuable land, in danger of escaping to third parties, it concluded the applicant satisfied both limbs and granted the injunction in terms of prayer (5).

p. 1

Legal principles established

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  • An applicant under Rule 5(2)(b) must demonstrate an arguable appeal and that the appeal would be rendered nugatory unless stay of execution or injunction is granted pending appeal.

Court orders

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  1. 1.Injunction granted in terms of prayer (5) of the notice of motion dated 20th January 2020 restraining the respondents from selling, transferring, charging or otherwise dealing with LR NO. 209/2379 pending the hearing and determination of the appeal
  2. 2.Costs of the application to abide the outcome of the appeal
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, "Metro Plaza Limited v Dubai Bank Kenya Limited (in liquidation) & 1 other", Case Analysis (2020). Civil Appeal (Application) No. 526 of 2019. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2020/38/eng@2020-12-18

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