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Court of AppealAllowedCivil Application No. 40 of 2020· [2020] KECA 463 (KLR)

University of Nairobi v Ricatti Business of East Africa [2020] KECA 463 (KLR)

Court of Appeal
7 August 2020
1,125 words in judgment
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The bottom line

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Kenya's Court of Appeal paused collection of a Ksh. 7.5 million judgment against the University of Nairobi because the appeal raised serious legal questions worth hearing.

What this practically means

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Executive summary

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The University of Nairobi moved the Court of Appeal under Rule 5(2)(b) of the Court of Appeal Rules for stay of execution of a High Court judgment (F. Tuiyott, J., delivered 6th December 2019 in HCCC No. 73 of 2015) awarding Ricatti Business of East Africa Ksh. 7,492,550.00 plus costs and interest, following the alleged arbitrary termination of a collaboration contract under which the University had accredited the respondent to offer diploma courses. The University contended the appeal raised serious questions of law, including the mandate of the Commission for Higher Education under the repealed Universities Act, the accreditation approval process, and the sufficiency of the termination notice, and offered to deposit the judgment sum in Court as security. Applying the well-settled twin principles for Rule 5(2)(b) applications - arguability and nugatory-ness - the Court found a single bona fide arguable ground suffices, and the memorandum raised several points of law deserving full argument. On the nugatory limb, the Court accepted that recovering the decretal sum from the respondent if the appeal succeeded would be onerous and would expend further public resources. The application was unopposed, and the offer to deposit the money in Court was regarded as removing any prejudice to the respondent. The Court allowed the notice of motion with costs in the appeal, stayed execution of the entire judgment pending the appeal, and ordered the applicant to deposit Ksh. 7,492,550.00 in Court pending hearing and determination of the appeal. The High Court judgment itself was not disturbed at this interlocutory stage.

Key legal issues

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01

Whether the intended appeal is arguable

Holding

The Court found the memorandum of appeal raised poignant points of law, including the mandate of the Commission for Higher Education under the repealed Universities Act and the sufficiency of the termination notice, satisfying the arguability limb.

Reasoning

The Court perused the memorandum of appeal and identified substantive questions of law deserving determination, notably the scope of the Commission for Higher Education's mandate in accreditation of universities and whether the termination notice was sufficient. Relying on precedent, it reiterated that a single bona fide arguable ground suffices and that an arguable appeal need not necessarily succeed, only be non-frivolous and deserving of full argument.

p. 2
02

Whether the appeal would be rendered nugatory if stay is denied

Holding

The Court held that the nugatory limb was satisfied because recovery of the decretal sum from the respondent, if the appeal succeeded, would be onerous and would expend further public resources; deposit of the judgment sum in Court as security removed any prejudice to the respondent.

Reasoning

The test is whether what is sought to be stayed is reversible, or if not, whether damages would reasonably compensate the aggrieved party. The applicant did not allege impecuniosity but argued difficulty of refund. The Court accepted that recovering the money would be onerous and involve expending more public resources. Since the applicant offered to deposit the decretal sum in Court, the respondent would suffer no prejudice, as the money would be released to the successful party after the appeal.

p. 2

Legal principles established

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  • In a Rule 5(2)(b) application the Court exercises original and discretionary jurisdiction, not an appeal from the trial judge's discretion, and must be satisfied both that the appeal is arguable and that it would be rendered nugatory if stay is denied.
  • An applicant for stay need only raise a single bona fide arguable ground of appeal; a multiplicity of grounds is not required.
  • An arguable appeal is one that is not frivolous and ought to be argued fully; it need not necessarily succeed.
  • Where an applicant alleges that an appeal will be rendered nugatory because of a respondent's impecunity, the onus shifts to the respondent to rebut that allegation by evidence.

Court orders

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  1. 1.Stay of execution of the entire judgment of the High Court (F. Tuiyott, J.) dated 6th December 2019 in HCCC No. 73 of 2015 pending hearing and determination of the appeal
  2. 2.The applicant to deposit Ksh. 7,492,550.00 in Court pending the hearing and determination of the appeal
  3. 3.Costs of the application to the applicant, costs in the appeal

Authorities

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Legislation

  • Court of Appeal RulesRule 5(2)(b)
  • Universities Act Chapter 210 (repealed)

Cases cited (4)

  • Ruben & 9 Others v Nderitu & Another
    [1989] KLR 459
  • Damji Pragji Mandavia v Sara Lee Household & Body Care (K) Ltd
    Civil Application No. Nai 345 of 2004
  • Joseph Gitahi Gachau & Another v. Pioneer Holdings (A) Ltd. & 2 others
    Civil Application No. 124 of 2008
  • International Laboratory for Research on Animal Diseases v Kinyua
    [1990] KLR 403
On appeal from
High Court of Kenya at Nairobi (Commercial and Admiralty Division)
HCCC No. 73 of 2015
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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Later judgments citing this (2)

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Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.

Cite this brief

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Cite this brief

Caselaw, "University of Nairobi v Ricatti Business of East Africa [2020] KECA 463 (KLR)", Case Analysis (2020). Civil Application No. 40 of 2020. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2020/463/eng@2020-08-07

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