Zakhem International Construction Limited v Oil Fields Engineering and Supplies Limited; Eco Bank Kenya Limited & 3 others (Interested Parties) (Civil Application E503 of 2024) [2025] KECA 280 (KLR)
The bottom line
#Kenya's Court of Appeal paused a High Court case and its orders pending appeal, finding overlapping bias concerns exceptional enough to justify a rare stay of proceedings.
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 Court has jurisdiction to entertain an appeal against an interlocutory order made in proceedings under sections 35 and 36 of the Arbitration Act without leave
- 2.Whether the intended appeal is arguable
- 3.Whether the intended appeal would be rendered nugatory if stay of execution is not granted
- 4.Whether exceptional circumstances exist to justify a stay of proceedings before the High Court
Key legal issues
#Jurisdiction over appeals from interlocutory orders in Arbitration Act proceedings
The Court declined to resolve the leave question on a stay application, treating its jurisdiction as properly triggered by the filed notice of appeal and reserving the leave question for a striking-out motion.
Although the impugned order was made in proceedings under sections 35 and 36 of the Arbitration Act, the order itself did not set aside or enforce an award; it was an order within undetermined proceedings. The Court held it was not obvious whether leave was required, and that the contestation was best ventilated on a striking-out application already filed, not on a stay motion.
Arguability and nugatory-ness for stay of execution
Both limbs were satisfied: the complaint that the 30th September 2024 order altered the scope of the DCI investigation directed on 8th August 2024 was worthy of consideration, and allowing investigations to proceed on the altered footing would render a successful appeal futile given the bearing on the recusal application.
The two orders prima facie appear at odds: the first directed the DCI to investigate whether the court had been approached by Prof. Ojienda; the second directed inquiry into whether Mr. Amina and Mr. Zakhem compromised the fair determination of the dispute. Because the investigations inform the recusal application, proceeding on the second directive would make a successful appeal worthless, futile or invalid.
Stay of proceedings - exceptional circumstances
A stay of proceedings was warranted because an exceptional circumstance was revealed: compounded apprehension of bias against the trial Judge, given that the two orders prima facie seem to be at odds.
Allegations of partiality and bias had been raised against the learned Judge even before the impugned order, and the later order was said to entrench that bias. Since the two orders prima facie conflict, the applicant's compounded apprehension was not trivial, satisfying the exceptional-circumstances threshold for staying proceedings.
Legal principles established
#- An applicant for stay pending appeal must demonstrate an arguable appeal and that the appeal will be rendered nugatory if stay is not granted; stay of proceedings is a drastic order granted only in exceptional circumstances.
Court orders
#- 1.Stay of execution of the order of the High Court issued on 30th September 2024 in HCCC Arbitration E042 of 2021, Zakhem International Construction Limited v Oilfields Engineering Supplies Limited consolidated with HCCC Arb. No. E056 of 2021, pending the hearing and determination of the intended appeal
- 2.Stay of the proceedings before the High Court pending the hearing and determination of the intended appeal
- 3.Costs of the motion to be in the intended appeal
The bench
#One judgment of the whole court — no separate or dissenting opinions.
- On appeal from
- High Court of Kenya, Commercial and Tax Division
- HCCC Arbitration E042 of 2021 (consolidated with HCCC Arb. No. E056 of 2021)
- Jurisdiction invoked
- Sections 3A and 3B of the Appellate Jurisdiction Act and rules 5(2)(b), 47 and 49 of the Court of Appeal Rules (as invoked by the motion)
- Consolidated with
- HCCC Arbitration E042 of 2021, Zakhem International Construction Limited v Oilfields Engineering Supplies Limited consolidated with HCCC Arb. No. E056 of 2021, Oilfields Engineering Supplies v Zakhem International Construction Limited
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.
The applicants must show an arguable appeal. One which even if unsuccessful eventually, raises at least one point worth of interrogation by the Court hearing the appeal.
Regarding stay of proceedings, it is a drastic order and will only be granted in exceptional circumstances (see Atsango Chesoni [2002] eKLR).
We prefer to treat our jurisdiction as properly triggered by the notice of appeal that has been duly filed and to reserve the more involved question regarding leave to a striking out motion, which we were advised by Mr Okubasu had been filed.
Ultimately, we allow both limbs of the application of 3rd October 2024 with the result that there shall be stay of execution of the order of the High Court issued on 30th September 2024
and stay of those proceedings pending the hearing and determination of the intended appeal. Costs of the motion shall be in the intended appeal.
Issues in the judgment
#The notice of motion is said to invoke rule 5(a)(b) of the Rules of this Court, which does not correspond to the standard rule 5(2)(b) formulation; possible typographical error.
The consent order quoted in paragraph 2 refers to HCC Arb No E036 of 2021, whereas the proceedings elsewhere in the judgment are consistently referred to as HCCC Arb. No. E056 of 2021; inconsistency in the case number.
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Zakhem International Construction Limited v Oil Fields Engineering and Supplies Limited; Eco Bank Kenya Limited & 3 others (Interested Parties) (Civil Application E503 of 2024) [2025] KECA 280 (KLR)", Case Analysis (2025). Civil Application No. E042 of 2024 (motion dated 3rd October 2024) arising from HCCC Arbitration E042 of 2021 consolidated with HCCC Arb. No. E056 of 2021. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2025/280/eng@2025-02-21
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.