Bio Corn Products (EPZ) Ltd v Diamond Trust Bank Kenya Ltd [2020] KECA 118 (KLR)
The bottom line
#The Court of Appeal blocked no sale of a charged Eldoret property, ruling the appeal doubtful and the bank would suffer losses if halted.
What this practically means
#Executive summary
#Key legal issues
#Whether the intended appeal is arguable
The court doubted the arguability of the appeal, as the applicant was merely challenging the exercise of discretion by the learned Judge without demonstrating that the discretion was improperly exercised
The court applied the settled Rule 5(2)(b) principles summarized in Stanley Kangethe Kinyanjui vs. Tony Ketter & 5 others. It found that the indebtedness was established at Kshs.30,619,761.13 as at 2nd February 2018 and that the applicant's only real contest was the exercise of judicial discretion, which was not shown to be improper. Disputes as to amounts and service of statutory notices were not, per the respondent's submissions adopted by the court, matters determining arguability.
Whether the appeal would be rendered nugatory if the injunction is not granted
The nugatory limb failed because no allegation was made that the respondent could not compensate the applicant; rather, the respondent stood to suffer loss and prejudice from an order of stay
The court noted the absence of any allegation that the respondent would be unable to compensate the applicant if the appeal succeeded. Considering the substantial outstanding debt and accruing interest, the court concluded that it was the respondent, not the applicant, who stood to suffer loss and prejudice if the orders were granted. The applicant's title documents were already with the respondent, providing a basis for computing compensation.
Legal principles established
#- An applicant under Rule 5(2)(b) must satisfy both the arguability of the appeal and the nugatory-aspect test; failure on either limb defeats the application
- A mere contest as to the exercise of discretion by the High Court in an injunction application does not, without more, demonstrate that an intended appeal is arguable
- Where no allegation is made that the respondent cannot compensate the applicant if the appeal succeeds, and the respondent stands to suffer loss from a stay, the nugatory test fails
Court orders
#- 1.The application under Rule 5(2)(b) is dismissed with costs
- On appeal from
- High Court at Eldoret
- Eldoret Civil Case No. 19 of 2019
- Jurisdiction invoked
- Rule 5(2)(b) of the Court of Appeal Rules
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Bio Corn Products (EPZ) Ltd v Diamond Trust Bank Kenya Ltd [2020] KECA 118 (KLR)", Case Analysis (2020). Civil Appeal (Application) No. 245 of 2019. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2020/118/eng@2020-12-04
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.