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Court of AppealAllowedCivil Appeal E287 of 2022· [2022] KECA 1356 (KLR)

Njowabu Kenya Limited v Mjengo Limited

Court of Appeal
2 December 2022
KMK M'InotiKLKI LaibutaPGPM Gachoka
1,796 words in judgment
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The bottom line

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Kenya's Court of Appeal halted execution of a land sale judgment, confirming that one arguable appeal point is enough to win a stay.

What this practically means

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Executive summary

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Mjengo Limited obtained judgment in the Environment and Land Court at Nairobi (Mogeni, J.) on 7 June 2022 in ELC Suit No. 1055 of 2015, dismissing Njowabu Kenya Limited's counterclaim and granting specific performance of a 2013 sale agreement over LR No 4953/4349, including acceptance of the balance purchase price and conveyance of the property. Njowabu filed a twelve-ground appeal and moved the Court of Appeal under rules 5(2)(b) and 42 of the Court of Appeal Rules and article 159(2)(d) of the Constitution for stay of execution pending appeal. The applicant argued the appeal was arguable and that execution would render it nugatory; the respondent, through Raj Malde's affidavit, insisted on its right to execute. Applying the settled twin principles, the court (K M'Inoti, KI Laibuta and PM Gachoka, JJA) found the appeal arguable, the central grievance being the grant of specific performance of a contract alleged to have been frustrated or rescinded. On the second limb, adopting Reliance Bank v Norlake's definition of 'nugatory' and the authority that executed final specific performance orders are lengthy and costly to reverse, the court held the appeal would be rendered nugatory absent stay. The motion was allowed with costs in the intended appeal. The ruling is interlocutory; the substantive appeal remains pending.

Key legal issues

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01

Arguability of the intended appeal

Holding

The intended appeal was arguable, centring on the legality of specific performance of a contract alleged to have been frustrated or rescinded.

Reasoning

The court read the motion grounds, affidavits and submissions and identified the core grievance as the legal soundness of the specific performance order despite alleged frustration or rescission. That raised a serious legal question, satisfying the first limb; a single arguable point suffices and success need not be shown.

p. 3
02

Nugatory value of the appeal

Holding

Execution of a contested decree for specific performance and transfer of land of substantial value would render a successful appeal nugatory.

Reasoning

Relying on Reliance Bank v Norlake, the court held 'nugatory' includes the trifling; considering Milka Akinyi Otieno and Okul v Ondieki, reversing executed specific performance orders is lengthy and costly, and transfer of the suit property would complicate reversal. The second limb was therefore satisfied.

Legal principles established

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  • An applicant under rule 5(2)(b) must show an arguable appeal and that the appeal would be rendered nugatory absent stay.
  • One arguable point suffices; the applicant need not show the point will succeed.
  • Execution of final specific performance orders before appeal can render a successful appeal nugatory.

Court orders

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  1. 1.Stay of execution of the judgment and decree of the ELC in ELC Suit No. 1055 of 2015 pending hearing and determination of the intended appeal
  2. 2.Costs of the motion to abide the outcome in the intended appeal (allowed with costs in the intended appeal)

Authorities

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Legislation

  • Court of Appeal Rulesrule 5(2)(b)
  • Court of Appeal Rulesrule 42
  • Constitution of Kenyaarticle 159(2)(d)

Cases cited (8)

  • Chris Munga N Bichage vs Richard Nyagaka Tongi and 2 others
    [2013] eKLR

    Twin principles for grant of stay under rule 5(2)(b)

  • Stanley Kang'ethe Kinyanjui vs. Tony Ketter and 5 others
    [2013] eKLR

    Twin principles; one arguable point suffices and need not succeed

  • Trust Bank Limited and another vs Investech Bank Limited and 3 others
    [2000] eKLR

    Twin principles for rule 5(2)(b) applications

  • Anne Wanjiku Kibeh v Clement Kungu Waibara and IEBC
    [2020] eKLR

    Applicants must show arguable appeal and nugatory aspect

  • Yellow Horse Inns Limited vs AA Kawir Transporters & 4 Others
    [2014] eKLR

    One arguable point suffices

  • Reliance Bank Ltd Vs Norlake Investments Ltd
    (2002) 1 EA p 227

    Definition of 'nugatory'

  • Milka Akinyi Otieno vs Charles Odongo Ngani
    [2018] eKLR

    Executed final specific performance orders are lengthy and costly to reverse

  • Okul & another vs. Ondieki & 2 others
    [2022] eKLR

    Balance of convenience favouring stay where property could be transferred

On appeal from
Environment and Land Court of Kenya at Nairobi
ELC Suit No. 1055 of 2015
Jurisdiction invoked
Rules 5(2)(b) and 42 of the Court of Appeal Rules; article 159(2)(d) of the Constitution

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, "Njowabu Kenya Limited v Mjengo Limited", Case Analysis (2022). Civil Appeal E287 of 2022. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2022/1356/eng@2022-12-02

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