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Court of AppealDismissedCivil Application E046 of 2021· [2021] KECA 190 (KLR)

Hassan v Ali & 3 others (Civil Application E046 of 2021) [2021] KECA 190 (KLR)

Court of Appeal of Kenya
19 November 2021
1,424 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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Kenya's Court of Appeal refused to pause rent and payment orders because any money paid could be recovered if the appeal later succeeded.

What this practically means

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Executive summary

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Nuh Abdille Hassan, the 3rd defendant before the Environment and Land Court (Okong'o J), was joined to a suit alongside two others by orders made on 28th January 2021. The judge also ordered him, pending the hearing of the suit, to pay rent agreed under a joint venture agreement and lease over LR 36/460/VII, render quarterly accounts of monies collected from the property as rent and goodwill, and deposit goodwill monies into a joint bank account in the names of the parties' advocates. He filed a notice of appeal and moved the Court of Appeal under Rule 5(2)(b) of the Court Rules for stay of execution of the orders and stay of further proceedings pending his intended appeal, contending that the judge lacked jurisdiction in light of the arbitration clause in the parties' agreements. The 1st respondent opposed, arguing that the orders merely preserved the status quo and were reversible. Applying the well-established twin test under Rule 5(2)(b), the Court found the jurisdictional issue arguable but held the nugatory limb failed: the orders were reversible, monies paid could be recovered if the appeal succeeded, and no refund difficulties were alleged. Because both limbs must be satisfied, the motion was dismissed with costs. The decision below was not disturbed, as this was an interlocutory application and not the substantive appeal.

Key legal issues

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01

Whether the intended appeal is arguable

Holding

Yes. The grounds all raise the issue of jurisdiction in light of section 6 of the Arbitration Act, which is not frivolous.

Reasoning

The applicant exhibited a draft memorandum of appeal whose six grounds all rested on jurisdiction - that the joint venture agreement and lease provided for arbitration and the judge erred in granting interim orders. The Court held it would be premature to make definitive findings on jurisdiction at the interlocutory stage, but the issue could not be said to be frivolous, so arguability was satisfied.

p. 3
02

Whether the intended appeal would be rendered nugatory if stay is not granted

Holding

No. The orders - payment of rent, accounting, and deposit of goodwill monies in a joint account - are reversible and any monies paid can be recovered, with no allegation that the 1st respondent would be unable to refund.

Reasoning

The Court examined the impugned orders: apart from the joinder, they required the applicant to pay rent, render quarterly accounts and deposit goodwill monies into a joint bank account. Execution of such orders would not render the appeal nugatory because the orders are reversible; if the applicant succeeded on his jurisdictional challenge, the orders would simply be set aside and monies paid recovered.

p. 3

Legal principles established

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  • An applicant under Rule 5(2)(b) must satisfy the twin requirements that the appeal is arguable and that it would be rendered nugatory if the orders sought are not granted; both must be satisfied.
  • A single bona fide arguable ground of appeal suffices to satisfy the arguability requirement; the ground need not succeed but must not be frivolous.
  • Nugatory means useless, futile or trifling, and depends on whether what is sought to be stayed would be irreversible or, if reversible, whether damages would reasonably compensate the aggrieved party.

Court orders

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  1. 1.The applicant's notice of motion dated 12th February 2021 seeking stay of execution and stay of proceedings is dismissed
  2. 2.Costs of the motion to the 1st respondent

Authorities

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Legislation

  • Court of Appeal RulesRule 5(2)(b)
  • Arbitration ActSection 6
  • Arbitration ActSection 6(1)(b)

Cases cited (5)

  • Attorney General vs. Samuel Chege Gitau & 283 others
    [2010] eKLR
  • Mumias Sugar Company Limited vs. Mumias Outgrowers Company
    [1998] 2014 eKLR
  • Stanley Kang'ethe Kinyanjui vs Tony Ketter & 5 others
    [2013] eKLR
  • Reliance Bank Ltd vs. Norlake Investments Ltd
    [2002] 1 EA 227
  • Ahmed Musa Ismael vs Kumba Ole Ntamorua & 4 Others
    [2014] eKLR
On appeal from
Environment and Land Court
Not stated in the judgment
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, "Hassan v Ali & 3 others (Civil Application E046 of 2021) [2021] KECA 190 (KLR)", Case Analysis (2021). Civil Application E046 of 2021. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2021/190/eng@2021-11-19

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