Nyoro Construction Company Limited v Kenya Commercial Bank Limited (Civil Application E626 of 2024) [2025] KECA 157 (KLR)
The bottom line
#Kenya's Court of Appeal refused to stop a bank from selling a contractor's assets, ruling that a disputed debt alone does not justify blocking a secured lender.
What this practically means
#Executive summary
#Questions the Court framed
#The issues the Court set itself to decide, in its own words.
- 1.Whether the intended appeal is arguable
- 2.Whether, if the appeal is successful, it would be rendered nugatory absent the orders sought
Key legal issues
#Whether the intended appeal is arguable where the debt and default are undisputed
The appeal is not arguable; the applicant is admittedly heavily indebted and in default, and delay in payment by the Government of Kenya does not, per se, warrant an injunction.
The Court found the debt of almost Kshs.1.5 billion and the default undisputed. While Government delay contributed to the default, that fact alone does not justify an injunction against the secured creditor. It follows the established principle that a mortgagee's power of sale is not restrained merely because the amount due is disputed, unless the mortgagor pays the claimed amount into court. Accordingly the learned judge properly discharged the earlier injunction.
Whether the appeal, if successful, would be rendered nugatory
The second limb need not be decided since the appeal is not arguable; but in any event the respondent, a reputable commercial bank, can compensate the applicant in damages.
Having found no arguable appeal, the Court declined to determine the nugatory limb. It nevertheless stated, hypothetically, that no material was placed before it showing the respondent bank would be unable to compensate the applicant in damages if the appeal later succeeded. This was expressly an alternative observation, not the basis of the dismissal.
Legal principles established
#- In an application for stay of execution pending appeal, the applicant must demonstrate that the appeal or intended appeal is arguable and that, unless the orders sought are granted, the appeal, if successful, will be rendered nugatory.
- A mortgagee will not be restrained from exercising the statutory power of sale merely because the amount due is disputed or the mortgagor objects to the manner of sale; the mortgagee will be restrained if the mortgagor pays the amount claimed into court.
Court orders
#- 1.The notice of motion dated 14th November 2024 is dismissed
- 2.Costs of the application are awarded to the respondent
The bench
#One judgment of the whole court — no separate or dissenting opinions.
- On appeal from
- High Court of Kenya at Nairobi, Commercial and Tax Division
- E327 of 2023
- Jurisdiction invoked
- Inherent jurisdiction of the Court of Appeal to grant orders of stay/injunction pending an intended appeal (Rule 5(2)(b) jurisdiction invoked by a notice of motion dated 14th November 2024; the specific rule is not named in the judgment as reproduced)
Relief refused
#Stay of the High Court order discharging the earlier temporary injunction granted on 7th November
The intended appeal was found not to be arguable; the applicant is admittedly indebted and in default, so the judge cannot be faulted for discharging the injunction
Injunction restraining the respondent from auctioning, selling or disposing of the applicant's assets and LR 209/10806 Nairobi pending the intended appeal
No arguable appeal; and in any event the respondent, a reputable commercial bank, can compensate the applicant in damages
Costs
The application was dismissed with costs to the respondent.
Quotable passages
#Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.
In an application for stay of execution pending appeal, the applicant must demonstrate that the appeal or intended appeal is arguable, and that unless the orders sought are granted, the appeal, if successful, will be rendered nugatory.
The mortgagee will not be restrained from exercising his power of sale because the amount due is in dispute, or because the mortgagor objects to the manner in which the sale is being arranged. He will be restrained, however, if the mortgagor pays the amount claimed to Court...
In conclusion, therefore, we find this application unmeritorious and dismiss it with costs to the respondent.
Issues in the judgment
#The names of the parties are not stated in the reproduced judgment; the applicant is a road-construction contractor and the respondent a commercial bank advancing approximately Kshs.1.5 billion, but neither is named.
The case number of the application before the Court of Appeal is not stated; only the underlying High Court case number E327 of 2023 is given. The notice of motion is identified only by its date.
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Nyoro Construction Company Limited v Kenya Commercial Bank Limited (Civil Application E626 of 2024) [2025] KECA 157 (KLR)", Case Analysis (2025). Not stated in the judgment (arising from High Court Commercial and Tax Division Case No. E327 of 2023). Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2025/157/eng@2025-02-07
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.