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Court of AppealDismissedCivil Appeal (Application) 177 of 2020· [2022] KECA 1303 (KLR)

Equitorial Land Holdings v Korir

Court of Appeal
2 December 2022
2,291 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 stop a property sale because the company never got the legal permission required to appeal an arbitration decision.

What this practically means

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Executive summary

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The applicant, Equitorial Land Holdings, sought an injunction under Rule 5(2)(b) of the Court of Appeal Rules 2010 restraining the respondent from dealing with two suit properties pending an appeal against a ruling of the Environmental and Land Court at Eldoret (Kibunja, J.) of 26 February 2020 setting aside an arbitral award that had upheld renewal of a lease. The Court of Appeal (Okwengu, Omondi and Mativo, JJA) first examined its own jurisdiction. Relying on Section 10 of the Arbitration Act and the Supreme Court's decision in Nyutu Agrovet, it held that court intervention in arbitration matters is permitted only where the Act expressly allows it or in the public interest to prevent substantial injustice, and that circumscribed appeals may address process failures, not the merits of an award. Section 39(3) of the Arbitration Act requires either prior party agreement or leave on a point of law of general importance; the applicant had obtained no leave and its appeal targeted the merits of the award, so the Court could not assume jurisdiction it did not have. On the Rule 5(2)(b) twin tests, the Court found the appeal not arguable and no nugatory-ness established: the applicant had withheld that it had vacated the suit properties, demolished its structures and purchased another property, and the respondent with stakeholders including NEMA would oversee decommissioning of the tailing dam. The application was dismissed with costs to the respondent. The decision below was not disturbed; this ruling concerned only the interlocutory application.

Key legal issues

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01

Jurisdiction to entertain an application for injunction pending appeal in an arbitration-related matter

Holding

The Court lacked jurisdiction because the applicant had neither obtained leave to appeal under Section 39(3) of the Arbitration Act nor demonstrated that it fell within the permitted instances of court intervention

Reasoning

Section 10 of the Arbitration Act permits court intervention only where the Act expressly provides for it or in the public interest where substantial injustice would be occasioned. Section 39(3) requires party agreement or leave on a point of law of general importance. The applicant relied on Nyutu Agrovet but its appeal targeted the merits of the award, which the Supreme Court excluded from circumscribed appellate review.

p. 2
02

Whether the intended appeal is arguable

Holding

The appeal was not arguable because leave had not been granted and the applicant did not meet the Section 39 threshold

Reasoning

An arguable appeal is one that merits consideration, not one that must succeed. Here the applicant failed to demonstrate that leave to appeal had been granted or that it met the Section 39 threshold; the Court deliberately refrained from commenting further to avoid embarrassing the bench that would hear the appeal.

p. 2
03

Whether the appeal would be rendered nugatory

Holding

No nugatory-ness was shown; the applicant had withheld that it had vacated the suit properties and purchased another property

Reasoning

Nugatory-ness depends on whether the status of the subject matter is reversible or whether damages would be adequate. The applicant's unrefuted failure to disclose that it had vacated the properties and acquired alternative premises undermined its claim of irreparable environmental harm; the respondent and stakeholders including NEMA would oversee decommissioning of the tailing dam.

p. 4

Legal principles established

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  • The jurisdiction to grant an injunction or stay pending appeal exists only where a right of appeal exists, and a right of appeal is a creation of statute
  • An appeal to the Court of Appeal from a High Court decision under Section 39(2) of the Arbitration Act requires either prior agreement of the parties or leave on a point of law of general importance
  • The principles for injunction, stay of execution and stay of proceedings under Rule 5(2)(b) are the same: arguability and nugatory-ness

Court orders

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  1. 1.The Notice of Motion dated July 28, 2020 is dismissed with costs to the respondent

Authorities

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Legislation

  • Court of Appeal Rules 2010Rule 5(2)(b)
  • Arbitration ActSection 10
  • Arbitration ActSection 35
  • Arbitration ActSection 39(3)
  • Land Act No 6 of 2012Section 61(2)
  • Arbitration Act No 4 of 1995Section 35

Cases cited (8)

  • Nyutu Agrovet Limited v Airtel Networks Kenya Limited; Chartered Institute of Arbitrators - Kenya Branch (Interested Party)
    [2019] eKLR

    Residual jurisdiction of the Court of Appeal over unfair High Court determinations in arbitration matters only in exceptional circumstances, addressing process failures not merits

  • Stanley Kangethe Kinyanjui v Tony Keter & 5 Others
    [2013] eKLR

    Twin principles for Rule 5(2)(b) applications: arguable appeal and appeal likely to be rendered nugatory; meaning of nugatory

  • Wasike vs Swala
    [1984] 591

    An arguable appeal is not one that would necessarily succeed but one that merits consideration by the court

  • Meso Multipurpose Society Limited v Luore Nyoiro Company Limited & 2 Others
    [2020] eKLR

    Definition of an arguable appeal

  • Equity Bank Limited v West Link Mbo Limited
    [2013] Eklr

    Definition of an arguable appeal

  • Board of Trustees of NSSF v Caroline Wanjiru Karori
    [2020] eKLR

    Definition of an arguable appeal

  • Reliance Bank Limited vs Norlake Investment Limited
    [2002] 1 EA 227

    Factors rendering an appeal nugatory are considered within the circumstances of each case, weighing the conflicting claims of both sides

  • African Safari Club Limited vs Safe Rentals Limited
    Nai Civ App 53/2010

    Balancing the hardships of both parties in keeping with the overriding objective and the oxygen principle

On appeal from
Environmental and Land Court at Eldoret
ELC Misc. Application No. 15 of 2019
Jurisdiction invoked
Rule 5(2)(b) of the Court of Appeal Rules 2010; jurisdiction conditioned on leave under Section 39(3) of the Arbitration Act

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, "Equitorial Land Holdings v Korir", Case Analysis (2022). Civil Appeal (Application) 177 of 2020. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2022/1303/eng@2022-12-02

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