Kenya Electricity Generating Company PLC v Lantech (Africa) Limited & 4 others
The bottom line
#Kenya's Court of Appeal stopped enforcement of a USD 26.7 million judgment against KenGen, ruling the appeal was arguable and the money could not be recovered if paid out.
What this practically means
#Executive summary
#Key legal issues
#Whether leave to appeal was required for the garnishee ruling
The notices of appeal could not be struck down at the stay stage because whether the ruling was a trial of a third-party claim under Order 23 rules 6 and 7 CPR, appealable as of right, was itself arguable.
The court held that whether Co-op Bank was a third party in terms of rules 6 and 7 of Order 23 CPR, and whether the receivables were encumbered, required involved argument. Such questions cannot be resolved summarily on a stay application and belong to a striking-out motion under Rule 84.
Abuse of process
KenGen was not an abuser of process but a victim of it, having been overtaken by rushed High Court enforcement orders; GDC's parallel review application did not bar its stay motion.
The High Court's orders of 26th and 27th September 2023 leapfrogged KenGen's pending stay application and directed a non-party bank to pay USD 13,400,000 without hearing it. Filing a notice of appeal does not bar review; whether simultaneous review and stay motions are abusive depends on unique circumstances.
Nugatory effect and ability to repay
The decretal sum of about USD 26,687,017.47 was public money; Lantech's bare assertion of ability to repay, without evidence, failed, so the appeals would be rendered nugatory without stay.
Relying on ABN Amro Bank N.V v Le Monde Foods Limited, the court held Lantech bore an evidential burden to demonstrate ability to refund the colossal sum. Its unsupported assertion meant the court must conclude it is unable to repay, imperilling the intended appeals.
Arguability of the intended appeals
The intended appeals were arguable: the finding that steam-charge proceeds were not assigned to Co-op Bank despite the deed of assignment, and the trial court's suo moto reversal of its own orders, deserved appellate attention.
The court identified a single arguable point on the 20th September 2023 ruling - inconsistency between protecting the receivables account and finding no proof of assignment - and a non-trivial point on the 28th September 2023 orders where the trial court purported to sit on appeal over its own orders.
Legal principles established
#- Both conditions for stay under Rule 5(2)(b) - arguability and nugatory effect - must be satisfied.
- A stay application against an order appealable only with leave, where leave was not obtained, fails only where it is crystal clear that leave was required and not obtained; otherwise the point awaits a striking-out motion.
- For a stay application, a notice of appeal read with the draft memorandum of appeal suffices even if the notice itself does not specify the part challenged.
- Filing a notice of appeal does not bar a party from seeking review of the same decision in the court below; each case turns on its circumstances.
- A party asserting ability to repay a decretal sum bears an evidential burden to prove it; a bare assertion without evidence fails.
Court orders
#- 1.The applications dated 29th September 2023 and 4th October 2023 are allowed
- 2.Stay of execution of the High Court ruling of 20th September 2023 pending the hearing and determination of the intended appeals
- 3.Costs shall be paid by Lantech
- On appeal from
- High Court of Kenya at Nairobi
- H.C. Misc. Application No. E776 of 2020
- Jurisdiction invoked
- Rule 5(2)(b) of the Court of Appeal Rules (application for stay of execution pending appeal)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Kenya Electricity Generating Company PLC v Lantech (Africa) Limited & 4 others", Case Analysis (2023). Civil Application E454 & E460 of 2023 (Consolidated). Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2023/1670/eng@2023-12-15
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.