Madison Insurance Company Kenya Limited v Commissioner of Domestic Taxes
The bottom line
#The Court of Appeal stopped Kenya Revenue Authority from collecting Sh41 million from Madison Insurance until its tax appeal is decided.
What this practically means
#Executive summary
#Key legal issues
#Whether the appellant's intended appeal is arguable under Rule 5(2)(b)
The court found the grounds raised by the appellant were arguable, satisfying the first limb of the Rule 5(2)(b) test.
The court applied the settled two-limb test: an applicant must show an arguable appeal and that the appeal would be rendered nugatory absent the orders. Arguability requires only one bona fide point worthy of decision. The court considered the grounds raised and found them arguable, citing established authority on the single-arguable-point standard.
Whether the appeal would be rendered nugatory if the injunction is not granted
The court held the nugatory limb was satisfied because the appellant stood to suffer immense losses, and noted that half of the decretal sum had already been deposited, securing the respondent's interests.
The court found that if the orders were not granted, the appellant would suffer immense losses and the appeal would be rendered nugatory. It noted the respondent had sought only a conditional stay requiring deposit of half the decretal sum, and confirmed the appellant had already deposited Kshs. 21,000,000 of the Kshs. 41,000,000, which weighed in favour of preserving the status quo pending appeal.
Legal principles established
#- To succeed under Rule 5(2)(b), an applicant must demonstrate an arguable appeal and that the appeal would be rendered nugatory if the orders sought are not granted; an appeal is arguable if it raises at least one bona fide point worthy of decision.
- The threshold for arguability is a low one: at least one bona fide point calling for a response from the respondent and worthy of decision by the Court.
Court orders
#- 1.Injunction restraining the Respondent from executing, enforcing, issuing agency notices or otherwise collecting from the Appellant Kshs. 41,087,678 as per its demand and confirmed Assessment Notice No. 0305200900055/6 dated 3rd September 2012, pending the inter partes hearing and determination of the application
- 2.Injunction restraining the Respondent from executing, enforcing, issuing agency notices or otherwise collecting from the Appellant Kshs. 41,087,678 pending the hearing and determination of the intended appeal
- On appeal from
- High Court of Kenya at Nairobi
- 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, "Madison Insurance Company Kenya Limited v Commissioner of Domestic Taxes", Case Analysis (2021). Civil Application No. E361 of 2020. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2021/781/eng@2021-03-19
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.