Ladopharma Company Limited & 2 others v National Bank of Kenya
The bottom line
#Kenya's Court of Appeal allowed National Bank of Kenya to proceed against charged properties because a reputable bank can pay damages if the appeal later succeeds.
What this practically means
#Executive summary
#Key legal issues
#Arguability of the intended appeal
The applicants had arguable points, including forgery of the letters of offer and illegal debits, sufficient for rule 5(2)(b).
The court perused the memorandum of appeal and identified grounds including whether the judge misunderstood the nature of the financial facility, whether there were illegal debits and credits, and whether the 2nd applicant's signature was forged. It held arguability requires only a single bona fide arguable ground, without making definitive findings.
Whether the appeal would be rendered nugatory
The nugatory principle was not satisfied because the properties' value is ascertainable and the respondent bank can compensate in damages.
The court noted the charges were registered, the properties' value was known (the applicants themselves valued one property at Kshs 100,000,000), and no allegation was made that the well-known bank could not refund or compensate in damages. Following Elizabeth Jerono, security property becomes a commodity for sale and sentimental attachment is inconsequential.
Legal principles established
#- An applicant under rule 5(2)(b) must satisfy both twin principles: an arguable appeal and that the appeal will be rendered nugatory without the order.
- Once a property is offered as security, its uniqueness or sentimental value is subordinated to the financier's interest, and damages from a reputable bank suffice to render an appeal not nugatory.
Court orders
#- 1.The application for injunction pending appeal is dismissed
- 2.Costs of the application awarded to the respondent
- On appeal from
- High Court of Kenya at Nairobi
- Milimani Commercial & Admiralty High Court Case No. 1031 of 2001
- Jurisdiction invoked
- Rules 5(2)(b), 42, 43(i), 47 and 49 of the Court of Appeal Rules, 2010
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Ladopharma Company Limited & 2 others v National Bank of Kenya", Case Analysis (2022). Civil Appeal (Application) E530 of 2022. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2022/1076/eng@2022-10-07
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.