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Court of AppealDismissedCivil Appeal No. E144 of 2021 (Application dated 20th April 2023)· [2023] KECA 976 (KLR)

I & M Bank Limited v Ufanisi Freighters Limited & 3 others (Civil Appeal (Application) E059 of 2023) [2023] KECA 976 (KLR)

Court of Appeal
28 July 2023
SKS. GATEMBU KAIRUPNP. NYAMWEYAGOG.V. ODUNGA
2,248 words in judgment
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The bottom line

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Kenya's Court of Appeal refused to stop execution because a judgment that merely dismisses an appeal cannot be stayed — nothing was ordered against anyone.

What this practically means

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Executive summary

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The Applicant, holding a fixed and floating debenture dated 3rd March 2015 over properties attached in execution of a decree obtained by the 1st Respondent against the 2nd to 4th Respondents, applied under Rule 5(2)(b) of the Court of Appeal Rules, 2022 for stay of execution of the High Court judgment of 2nd March 2023 (F. Wangari J.) dismissing its appeal against the dismissal of its objection proceedings by the Chief Magistrate's Court at Mombasa. The High Court had found no evidence of the appointment of a receiver and that the floating charge had crystallised. The Applicant argued the intended appeal was arguable, raising whether a floating charge can only crystallise upon appointment of a receiver, and that a stay was necessary to avoid the sale of charged assets securing a debt said to exceed Kshs 1 billion. The 1st Respondent countered that the High Court decision was a negative order incapable of stay, that a similar application was pending in the High Court, and that the Applicant had not shown the 1st Respondent could not refund sums if the appeal succeeded. Applying the settled Stanley Kangethe Kinyanjui v Tony Ketter principles, the Court found the intended appeal arguable on the crystallisation and receivership questions. However, on the nugatory limb, applying Jennifer Akinyi Osodo and Western College of Arts and Applied Sciences, it held that a negative order dismissing an appeal, which requires no party to do or refrain from anything, is incapable of execution and cannot be stayed; the execution sought related to the trial court's orders, not the application before it. The application was dismissed with costs to the 1st Respondent.

Key legal issues

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01

Whether the intended appeal was arguable

Holding

The intended appeal was arguable because it raised non-frivolous issues on the circumstances in which a floating charge crystallises and receivers may be appointed.

Reasoning

Applying the settled Rule 5(2)(b) principles, the Court held that an arguable appeal is one that is not frivolous and merits full argument, and a single triable issue suffices. The question of when a floating charge crystallises and when a receiver can be appointed was held to be a substantive issue warranting consideration by the Court.

p. 3
02

Whether the appeal would be rendered nugatory absent a stay

Holding

No, because the High Court judgment was a negative order incapable of execution; there was nothing arising from it capable of being stayed, irrespective of the appeal's merits.

Reasoning

Following Jennifer Akinyi Osodo and Western College, the Court reasoned that the High Court merely dismissed the appeal without ordering any party to do or refrain from doing anything. Such a negative order cannot be executed and thus cannot render the intended appeal nugatory. The execution sought to be stayed related to the trial court's orders, which were not the subject of the application.

p. 4

Legal principles established

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  • A negative order, such as a dismissal of an appeal without any direction to do or refrain from doing anything, is incapable of execution and cannot be stayed.
  • An arguable appeal need not be one that must succeed; it suffices that it is not frivolous and raises even one triable issue.

Court orders

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  1. 1.Dismissal of the Applicant's Notice of Motion application dated 20th April 2023
  2. 2.Costs of the application to the 1st Respondent

Authorities

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Legislation

  • Court of Appeal Rules, 2022Rule 5(2)(b)
  • Court of Appeal Rules, 2022Rule 43
  • Court of Appeal Rules, 2022Rule 79
  • Court of Appeal Rules, 2022Rule 84

Cases cited (11)

  • Stanley Kangethe Kinyanjui v Tony Ketter & 5 others
    [2013] eKLR
  • Lochab Brothers v Kenya Furfural Co. Ltd
    [1983] eKLR
  • County Secretary of Kajiado & 47 others v Salaries & Remuneration Commission & another
    (2021] eKLR
  • Charles Kipkoech Leting v Express (K) Ltd & another
    [2018] eKLR
  • Sicpa Securities Sol. Sa v Okiya Omtatah Okoiti & 2 others
    [2018] eKLR
  • Githunguri v Jimba Credit Corporation (No. 2)
    (1988) KLR 838
  • Kenya Pipeline Company Limited v Stanley Munga Githunguri
    [2011] eKLR
  • Jethwa v Shah T/A Supreme Styles
    [1989] eKLR
  • Sehmi General Building & Civil Contractor Limited v CJ Securities limited
    [2021] eKLR
  • Jennifer Akinyi Osodo v Boniface Okumu Osodo & 3 others
    [2021] eKLR
  • Western College of Arts and Applied Sciences v EP Oranga & 3 others
    [1976] eKLR
On appeal from
High Court
Civil Appeal No. E144 of 2021
Jurisdiction invoked
Rule 5(2)(b) of the Court of Appeal Rules, 2022

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (1)

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Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.

Cite this brief

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Cite this brief

Caselaw, "I & M Bank Limited v Ufanisi Freighters Limited & 3 others (Civil Appeal (Application) E059 of 2023) [2023] KECA 976 (KLR)", Case Analysis (2023). Civil Appeal No. E144 of 2021 (Application dated 20th April 2023). Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2023/976/eng@2023-07-28

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