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Court of AppealDismissed· [2024] KECA 1322 (KLR)

Wananchi Group (K) Ltd & another v Globecast Africa Ltd (Civil Appeal (Application) E836 of 2022) [2024] KECA 1322 (KLR)

Court of Appeal
27 September 2024
SKS. Gatembu KairuSKS. ole KantaiPNP. Nyamweya
1,505 words in judgment
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The bottom line

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The Court of Appeal refused to pause a USD 118,614 judgment against Wananchi because the company let its security guarantee expire and couldn't show the money couldn't be repaid.

What this practically means

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Executive summary

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This is a ruling of the Court of Appeal at Nakuru (Gatembu Kairu, ole Kantai and Nyamweya, JJA) delivered on 27th September 2024 on a motion by Wananchi Group (K) Limited and Wananchi Programming Limited under rule 5(2)(b) of the Court of Appeal Rules, 2022, seeking stay of execution of a judgment of the High Court (Tuiyott, J) which awarded Globecast Africa Limited USD 118,614.54 jointly and severally with interest and costs. The High Court had granted a conditional stay requiring a bank guarantee of USD 45,000 within 21 days, valid for one year. The applicants issued an NCBA Bank guarantee dated 29th November 2022, expiring 28th November 2023, which they did not renew. The applicants argued the appeal was arguable, that a third-party indemnity existed, and that the appeal would be rendered nugatory if execution proceeded. The respondent countered that there was no arguable point, that the decree was a money decree, and that it was a financially sound international company capable of repaying. The court applied the settled twin principles: arguability and nugatory effect. It found the draft grounds arguable but held the applicants had failed to demonstrate that the appeal would be rendered nugatory, noting the expired and unrenewed guarantee and the respondent's ability to repay the decretal sum. The motion was dismissed with costs to the respondent.

Key legal issues

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01

Whether the intended appeal is arguable

Holding

The court found the draft grounds of appeal arguable, including whether the trial judge erred in rejecting the set-off/counter-claim and invoice issues.

Reasoning

The court perused the draft memorandum of appeal and identified grounds relating to invoices raised by a third party and the treatment of the applicants' claims as separate from the counter-claim. It held these were not idle grounds. Applying established principle, an arguable ground need not be one that will succeed; it suffices that it requires determination by the court.

p. 3
02

Whether the appeal would be rendered nugatory if execution proceeds

Holding

The nugatory test was not satisfied: the decree is a money decree, the security guarantee expired and was not renewed, and the respondent demonstrated financial capacity to repay if the appeal succeeds.

Reasoning

The applicants had provided a bank guarantee of USD 45,000 which lapsed on 28th November 2023 and was not renewed. The decree is for money and the respondent, an international company with presence in Kenya, stated it was financially sound and able to repay the decretal sum should the appeal succeed. Since payment is reversible if the respondent can repay, refusal of stay does not render the appeal nugatory. The applicants failed on this second, essential limb.

p. 3

Legal principles established

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  • An applicant for stay pending appeal must demonstrate both that the appeal is arguable and that it will be rendered nugatory absent stay.
  • An arguable ground is not one that will necessarily succeed, but one that requires determination by the court.
  • A money decree does not automatically justify refusal of stay, but the applicant must show that the decretal sum, if paid, cannot be repaid by the respondent.

Court orders

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  1. 1.The motion seeking stay of execution pending appeal is dismissed
  2. 2.Costs of the motion awarded to the respondent

Authorities

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Legislation

  • Court of Appeal Rules, 2022rule 5(2)(b)
  • Civil Procedure Rules, 2010order 42 rule 6

Cases cited (4)

  • Stanley Kang'ethe Kinyanjui vs. Tony Ketter & 5 Others
    [2013] eKLR
  • Damji Pragji Mandavia vs. Sara Lee Household & Body Care (K) Ltd
    Civil Application No. Nai 345 of 2004
  • NIC Bank Limited & 2 others vs. Mombasa Water Products Limited
    [2021] eKLR
  • Housing Finance Company of Kenya Limited v Sharok Kher Mohamed Ali Hirji & Ano.
    [2015] eKLR
On appeal from
High Court
Not stated in the judgment
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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Cite this brief

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Cite this brief

Caselaw, "Wananchi Group (K) Ltd & another v Globecast Africa Ltd (Civil Appeal (Application) E836 of 2022) [2024] KECA 1322 (KLR)", Case Analysis (2024). . Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2024/1322/eng@2024-09-27

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