Dari Limited & 5 others v East African Development Bank [2020] KECA 581 (KLR)
The bottom line
#Kenya's Court of Appeal paused enforcement of a UK judgment debt, but only on condition the debtors deposit KShs. 50 million within 30 days.
What this practically means
#Executive summary
#Key legal issues
#Twin principles for relief under Rule 5(2)(b)
The applicants established arguability: the proper scope of the High Court's jurisdiction under Section 10 of the Foreign Judgments (Reciprocal Enforcement) Act vis-à-vis Article 50 fair-trial protections is arguable.
The court reiterated the Kinyanjui principles: it exercises original and unfettered but just discretion; both limbs must be satisfied; one bona fide arguable ground suffices; and no definitive findings should be made at this stage. The jurisdictional question under Section 10 of the Foreign Judgments (Reciprocal Enforcement) Act read with Article 50 satisfied the arguability limb.
Nugatory aspect and security held by the respondent
The applicants would suffer substantial loss if the judgment were executed because the respondent holds legal charges over two properties whose value exceeds the decretal sum.
The court noted the respondent holds legal charges over LR No. 1055/165 and LR No. 11320/3, and that the decretal sum is less than the value of that security, so execution would compel payment despite adequate security. Balancing the parties' interests and the respondent's concerns about the applicants' conduct, a conditional stay was the appropriate remedy.
Effect of applicants' conduct on discretionary relief
The respondent's allegations of disobedience of court orders and deceptive conduct were acknowledged but did not disqualify the applicants from relief; instead they informed the decision to grant only a conditional stay.
The respondent catalogued the applicants' disregard of orders by Nzioka and Kasango JJ, unauthorized sales of charged units, and depletion of escrow funds. The court was 'cognizant of the significant concerns raised' and, balancing the interests of the parties, tempered the stay with a security-deposit condition rather than refusing it outright.
Legal principles established
#- An applicant under Rule 5(2)(b) must satisfy both the arguability and nugatory limbs; satisfying only one is insufficient.
- On arguability, a single bona fide arguable ground suffices, and the court must not make definitive findings of fact or law at the Rule 5(2)(b) stage.
Court orders
#- 1.Stay of execution of the High Court ruling of 13th February 2020 and the orders of 7th January 2020 granted pending the hearing and determination of the intended appeal, on condition that the applicants deposit KShs.50,000,000 in the joint names of both advocates in an interest-earning account with a reputable bank within 30 days, failing which the stay orders shall lapse and the application shall stand as dismissed
- 2.Costs of the application to be in the intended appeal
- On appeal from
- High Court of Kenya at Nairobi
- H.C.C.C. No. 1 of 2020
- Jurisdiction invoked
- Sections 3A and 3B of the Appellate Jurisdiction Act and Rule 5(2)(b) of the Court of Appeal Rules, 2010
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Dari Limited & 5 others v East African Development Bank [2020] KECA 581 (KLR)", Case Analysis (2020). Civil Application No. 49 of 2020. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2020/581/eng@2020-06-19
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.