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Court of AppealDismissedCivil Application No. NAI 102 of 2019· [2021] KECA 497 (KLR)

John Gathara Kuria v Munyambu Njuguna Gachanjo & 1 other

Court of Appeal
4 June 2021
911 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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The Court of Appeal refused to freeze an arbitral award's enforcement because a money award can be repaid if an appeal later succeeds.

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 (Nambuye, J. Mohammed and Kantai, JJ.A.) on a Motion under rules 5(2)(b), 41 and 47 of the Court of Appeal Rules seeking stay of execution of an arbitrator's award, adopted as a decree of the High Court at Kiambu (Makau, J.) on 17th January 2019, pending an intended appeal. The underlying dispute arose from a sale agreement dated 25th October 2013 over L.R. No. Nairobi/Block/82/1589 for Ksh.55,500,000; a contractual dispute was referred to arbitration and the award, which granted the respondents monetary sums including Ksh.832,400 in rent and Ksh.4,096,946.40 in professional fees and statutory charges, was recognised and adopted as a decree. The applicant's application to set aside the award was dismissed and leave to appeal was declined. The court applied the twin rule 5(2)(b) principles from Stanley Kinyanjui Kangethe v Tony Ketter: the applicant must show the intended appeal is arguable and that it would be rendered nugatory absent stay. Although the three draft grounds attacking the arbitrator's jurisdiction and the scope of remedies might be arguable, the court doubted they could stand where leave to appeal had been declined, rendering the Motion incompetent. Further, no nugatory factor was shown: the award was monetary and it was not suggested the respondents could not repay if the appeal succeeded. The Motion was dismissed with costs to the respondents.

Key legal issues

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01

Whether the applicant satisfied the twin principles for stay of execution under rule 5(2)(b)

Holding

The applicant did not demonstrate that the intended appeal would be rendered nugatory absent stay; the award involved monetary sums repayable by the respondents if the appeal succeeded.

Reasoning

The court applied the settled rule 5(2)(b) test from Stanley Kinyanjui Kangethe v Tony Ketter. The applicant argued the appeal was arguable but made no showing on the nugatory prong. Because the award was monetary in nature and the respondents' ability to repay was not disputed, the court found no nugatory outcome and declined stay.

p. 2
02

Whether the Motion was competent where leave to appeal had been declined

Holding

The Motion was incompetent because the grounds of appeal, however arguable, could not stand where leave to appeal was declined.

Reasoning

The draft memorandum of appeal attacked the Judge's failure to find that the arbitrator exceeded jurisdiction and awarded remedies beyond the agreement. While these might be arguable, the court doubted they could succeed given the earlier refusal of leave, and so the Motion itself was incompetent and doomed to fail.

p. 2

Legal principles established

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  • An applicant under rule 5(2)(b) must show the intended appeal is arguable and that it would be rendered nugatory absent stay
  • Where monetary awards are involved and the judgment debtor's ability to repay is not challenged, an appeal is not rendered nugatory for want of stay

Court orders

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  1. 1.The Motion is dismissed
  2. 2.Costs of the Motion awarded to the respondents
On appeal from
High Court of Kenya at Kiambu
HC Misc. Application No. 444 of 2017
Jurisdiction invoked
Rules 5(2)(b), 41 and 47 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, "John Gathara Kuria v Munyambu Njuguna Gachanjo & 1 other", Case Analysis (2021). Civil Application No. NAI 102 of 2019. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2021/497/eng@2021-06-04

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