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Court of AppealDismissedCommercial Misc. Civil Application (intended appeal from High Court Commercial Misc. Civil Application No. 320 of 2016)· [2024] KECA 249 (KLR)

Wanjohi & 2 others v Acorn Properties Ltd (Civil Application 137 of 2017) [2024] KECA 249 (KLR)

Court of Appeal
8 March 2024
2,922 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~12 min to read original · ~4 min brief

The bottom line

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The Court of Appeal refused to let parties appeal an arbitration ruling, confirming that dismissal orders cannot be stayed and private contract disputes rarely justify appeals.

What this practically means

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Executive summary

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This is a ruling of the Court of Appeal at Nairobi (H.A. Omondi, Dr. K.I. Laibuta and M. Gachoka, JJA) delivered on 8th March 2024 on the applicants' Notice of Motion dated 16th June 2017. The applicants sought leave to appeal against a High Court ruling of Olga Sewe, J. dated 2nd June 2017 dismissing their application to set aside an arbitral award of Eng. Paul T. Gichuhi under section 35 of the Arbitration Act, together with a stay of execution of that ruling pending the intended appeal. The respondent opposed, arguing that the ruling was a negative order incapable of being stayed and that the court lacked jurisdiction because no point of law of general importance was engaged under section 39(3)(b) of the Arbitration Act. The court framed two issues: whether stay was merited and whether leave to appeal should issue. On stay, it held that a dismissal order is a negative order incapable of execution and thus incapable of being stayed, following Co-operative Bank v BIFU and George Ole Sangui v Kedong Ranch. On leave, it found no prior agreement that an appeal would lie, and applying the Supreme Court's guidance in Hermanus Phillipus Steyn v Giovanni Gnecchi-Ruscone, held that none of the eight proposed grounds raised a point of law of general importance, bore on the public interest, or raised a novel point requiring clarification - they were private contractual disputes. The motion was dismissed in its entirety with costs to the respondent. The application is an interlocutory one; no decision below was disturbed.

Key legal issues

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01

Whether stay of execution can issue in respect of a dismissal order

Holding

No. A dismissal order is a negative order incapable of execution and therefore incapable of being stayed; the application for stay fails.

Reasoning

The impugned High Court ruling merely dismissed the applicants' Originating Notice of Motion setting aside the arbitral award. Relying on Co-operative Bank of Kenya Ltd v BIFU and George Ole Sangui v Kedong Ranch, the court held that a dismissal order confers no relief, requires no party to do or refrain from anything, and cannot be enforced or stayed. The applicants' offer to settle the decretal amount by instalments further undermined the stay application.

p. 3
02

Whether leave to appeal should be granted under section 39(3)(b) of the Arbitration Act

Holding

Leave refused. None of the eight proposed grounds raises a point of law of general importance, bears on the public interest, or raises a novel point requiring clarification; they are private contractual disputes.

Reasoning

Applying the two statutory gateways in section 39(3), the court found no prior agreement that an appeal would lie. Under section 39(3)(b), borrowing the Supreme Court's articulation in Hermanus Phillipus Steyn v Giovanni Gnecchi-Ruscone, the applicant must show a matter of substantial, broad-based impact transcending the parties' litigation interests and bearing on the public interest, or a novel point requiring clarification. The eight proposed grounds concerned construction of a private contract and the scope of an arbitration between private parties; none met the threshold.

p. 6

Legal principles established

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  • A negative order, such as an order dismissing an application or suit, is incapable of execution and cannot be stayed.
  • To obtain leave to appeal under section 39(3)(b) of the Arbitration Act, the applicant must show a point of law of general importance whose determination will substantially affect the rights of one or more parties; the issue must transcend the litigation interests of the parties and bear upon the public interest, or raise a novel point or an issue where the law requires clarifying.
  • The guidance in Hermanus Phillipus Steyn v Giovanni Gnecchi-Ruscone on 'a matter of general public importance' under Article 163(4)(b) of the Constitution applies in interpreting 'of general importance' under section 39(3)(b) of the Arbitration Act.

Court orders

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  1. 1.The applicants' Notice of Motion dated 16th June 2017 fails and is dismissed with costs to the respondent

Authorities

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Legislation

  • Arbitration ActSection 39(3) and (4)
  • Arbitration ActSection 35(1) and (2)(a)(iv)
  • Arbitration ActSection 10
  • Court of Appeal Rules, 2010Rules 39, 42, 43 and 5(2)(b)
  • Court of Appeal Rules, 2022Rules 41, 44 and 45
  • Constitution of KenyaArticle 163(4)(b)

Cases cited (8)

  • Co-operative Bank of Kenya Limited vs. Banking Insurance & Finance Union (Kenya)
    [2015] eKLR
  • Executive Estates Limited v Kenya Posts & Anor.
    [2005] 1 E.A. 53
  • George Ole Sangui & 12 others vs. Kedong Ranch Limited
    [2015] eKLR
  • Kenya Shell Limited vs. Kobil Petroleum Limited
    [2006] eKLR
  • Machira t/a Machira & Company Advocates v Mwangi & Anor.
    [2002] 2 KLR 391
  • Memphis Limited vs. Kenya Ports Authority
    [2022] KECA 105 (KLR)
  • Hermanus Phillipus Steyn vs. Giovanni Gnecchi-Ruscone
    [2013] eKLR; Civil Appl. No. Sup.4 of 2012 (UR3/2012)
  • Provincial Insurance Company of East Africa v. Nandwa
    [1995 -1998] 2 EACA 288
On appeal from
High Court
High Court Commercial Misc. Civil Application No. 320 of 2016
Jurisdiction invoked
Section 39(3) and (4) of the Arbitration Act, 1995 as read with Rule 5(2)(b) of the Court of Appeal Rules, 2010

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, "Wanjohi & 2 others v Acorn Properties Ltd (Civil Application 137 of 2017) [2024] KECA 249 (KLR)", Case Analysis (2024). Commercial Misc. Civil Application (intended appeal from High Court Commercial Misc. Civil Application No. 320 of 2016). Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2024/249/eng@2024-03-08

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