Kenya Deposit Insurance Corporation v ABSA Bank Kenya PLC (ABSA) (Civil Application E195 of 2024) [2024] KECA 1753 (KLR)
The bottom line
#Kenya's Court of Appeal paused a Kshs 215 million High Court ruling against KDIC until the full appeal is heard, protecting government bodies from execution in the meantime.
What this practically means
#Executive summary
#Key legal issues
#Whether a dismissal order can attract a stay of execution from the Court of Appeal
A negative order cannot be stayed, but the suo moto declaration of unconstitutionality of sections 13A and 21 of the Government Proceedings Act was a positive order capable of being stayed.
The court observed that ordinarily a dismissal order attracts no stay because a negative order cannot be executed. However, the trial court went further, suo moto, to declare sections 13A and 21 of the Government Proceedings Act unconstitutional. Although that order was peripheral, it was a positive order with far-reaching ramifications for the National and County Governments, and therefore capable of being stayed.
Whether the intended appeal is arguable
The appeal is arguable on the question whether the Judge erred in finding the delay in filing the defence unexplained, and in suo moto pronouncing on the constitutionality of sections 13A and 21 of the Government Proceedings Act.
Applying the Kang'ethe Kinyanjui test, the court held that only one bona fide arguable ground is required. The applicant raised arguable points including whether the Judge erred in finding the delay unexplained and whether he erred in delving suo moto into the constitutionality of statutory provisions neither pleaded nor submitted on by the parties. Such points need not succeed, only merit ventilation.
Whether the appeal would be rendered nugatory absent stay
The applicant demonstrated that absent stay the appeal would be rendered nugatory, given the potential for execution against the National and County Governments and the conflict with section 2(6) of the Kenya Deposit Insurance Act.
The court weighed the conflicting claims of both parties. The applicant's fears - possible wanton attachment of National and County Government assets previously shielded by the impugned provisions, and the ruling's contradiction of section 2(6) of the Kenya Deposit Insurance Act prohibiting reduced or adjusted contributions - were held not idle. Undue hardship considerations applied by parity of reasoning.
Legal principles established
#- A negative order (a dismissal) is not capable of being stayed because it is incapable of execution, but where the decision also contains a positive order with far-reaching ramifications, that positive order is capable of being stayed.
- To succeed on a rule 5(2)(b) application, the applicant must establish that the appeal is arguable and that it will be rendered nugatory if the order is not granted.
- An arguable appeal need not necessarily succeed; it need only not be frivolous and deserving of full argument.
Court orders
#- 1.The Notice of Motion dated 23rd April 2024 is allowed
- 2.Costs shall abide the outcome of the appeal
- On appeal from
- High Court of Kenya
- Civil Suit No. E411 of 2022
- Jurisdiction invoked
- Sections 3, 3A and 3B of the Appellate Jurisdiction Act and rule 5(2)(b) of the Court of Appeal Rules
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Kenya Deposit Insurance Corporation v ABSA Bank Kenya PLC (ABSA) (Civil Application E195 of 2024) [2024] KECA 1753 (KLR)", Case Analysis (2024). Civil Application No. E290 of 2024 (Nairobi). Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2024/1753/eng@2024-12-06
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.