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Court of AppealDismissedCourt of Appeal, Nairobi, Civil Application (stated in judgment as notice of motion dated 19th June 2024 under rule 5(2)(b))· [2025] KECA 165 (KLR)

Equity Bank (kenya) Limited v Fitidis Group of Companies Limited & 2 others

Court of Appeal of Kenya
7 February 2025
1,702 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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Kenya's Court of Appeal refused Equity Bank's bid to freeze enforcement of a Kshs 46 million judgment because the bank came to court with unclean hands.

What this practically means

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Executive summary

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By extempore ruling of 24th September 2024 a three-judge bench of the Court of Appeal at Nairobi (Kiage, M'inoti and Korir, JJA) dismissed with costs Equity Bank Kenya Ltd's application dated 19th June 2024 under rule 5(2)(b) of the Court of Appeal Rules, seeking stay of execution or maintenance of the status quo pending an intended appeal from the High Court at Machakos (Odunga, J) ruling of 27th June 2022, which had dismissed the bank's application to be discharged as garnishee in proceedings enforcing a decree of about Kshs 46.27 million against Civicon Ltd in favour of Fitidis and Light Steel. These reasons were delivered on 7th February 2025. The Court accepted that the intended appeal raised arguable points, including whether a garnishee's own property may be attached, but held the applicant failed to satisfy the second limb of the rule 5(2)(b) test: it never suggested the decree-holders could not repay the decretal sum, so the appeal would not be rendered nugatory. Decisively, the Court invoked the equitable character of rule 5(2)(b) relief: the bank had allowed Civicon to continue transacting in the garnished accounts after service of the order nisi and had given untruthful statements, conduct the High Court had found amounted to unclean hands. Following Eric Makokha v Sagini and David Kamau Gakuru v National Industrial Credit Bank, the Court held an equitable remedy is unavailable to an undeserving party. The application was dismissed with costs to Civicon and Light Steel. The decision binds subordinate courts and the High Court on the requirement that rule 5(2)(b) applicants satisfy both limbs and come to Court with clean hands.

Key legal issues

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01

Test for relief under rule 5(2)(b)

Holding

The applicant must satisfy both considerations: an arguable appeal and that the appeal will be rendered nugatory absent relief. Failure on either or both disentitles the applicant.

Reasoning

The Court reaffirmed the settled principles in Stanley Kangethe Kinyanjui v Tony Ketter: the applicant must show the intended appeal is arguable or not frivolous, and that without relief the appeal, if successful, will be rendered nugatory. Citing Jaribu Holdings Ltd v Kenya Commercial Bank Ltd, the Court held both considerations must be satisfied. The applicant failed the nugatory limb and, more decisively, failed on conduct grounds.

p. 4
02

Arguability of the intended appeal

Holding

The intended appeal raised several arguable points which are not frivolous; it suffices that even one issue deserving consideration is raised, and the Court should not say more lest it prejudge the appeal.

Reasoning

The Court accepted that the intended appeal raised arguable points, including whether a garnishee's property may be attached and liability for the judgment debtor's debts. However, it stressed that arguability alone does not guarantee relief: the points need not succeed at the hearing, and the Court must avoid prejudging the merits of the intended appeal.

p. 3
03

Nugatory value and equitable conduct

Holding

The applicant failed to demonstrate that the respondents were incapable of repaying the amount, and its conduct - allowing the judgment debtor to continue transacting in the garnished accounts and failing to give truthful statements - amounted to unclean hands barring an equitable remedy.

Reasoning

The Court noted the applicant never suggested Fitidis and Light Steel could not repay the decretal sum, undermining the nugatory claim. The greater concern was the applicant's conduct as a seeker of an equitable remedy: counsel confirmed at the hearing that Civicon had continued transacting in the garnished accounts, and the High Court had found the applicant approached it with unclean hands. Citing Eric Makokha v Lawrence Sagini and David Kamau Gakuru v National Industrial Credit Bank, the Court held equitable relief cannot issue to an undeserving party.

p. 4

Legal principles established

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  • An applicant under rule 5(2)(b) must satisfy both the arguability and the nugatory limbs of the test as summarised in Stanley Kangethe Kinyanjui v Tony Ketter & Others
  • Rule 5(2)(b) invokes the equitable jurisdiction of the Court, and a party who seeks an equitable remedy must show themselves worthy of it; unclean hands disentitle the applicant

Court orders

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  1. 1.Dismissal of the applicant's notice of motion dated 19th June 2024 seeking stay of execution or maintenance of the status quo pending appeal
  2. 2.Costs of the application awarded (to Civicon and Light Steel as recorded in the reasons)
On appeal from
High Court of Kenya at Machakos
Garnishee proceedings (ruling dated 27th June 2022)
Jurisdiction invoked
Rule 5(2)(b) of the Court of Appeal Rules, on a notice of appeal filed after extension of time granted by a single judge on 17th May 2024

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, "Equity Bank (kenya) Limited v Fitidis Group of Companies Limited & 2 others", Case Analysis (2025). Court of Appeal, Nairobi, Civil Application (stated in judgment as notice of motion dated 19th June 2024 under rule 5(2)(b)). Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2025/165/eng@2025-02-07

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