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Court of AppealAllowedCivil Application No. E210 of 2024 (Nakuru) - application dated 16th October 2024· [2025] KECA 834 (KLR)

Kobilo Farm Limited & 1 other v Elfam Limited

Court of Appeal of Kenya
16 May 2025
1,976 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 paused execution of a land judgment because the appeal is arguable and proceeding could make the outcome irreversible.

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 (Mativo, Gachoka and Odunga, JJ.A) on a Notice of Motion dated 16th October 2024 brought by Kobilo Farm Limited and Metropole Holdings Limited under Rule 5(2)(b) of the Court of Appeal Rules, 2022 seeking stay of execution of the judgment and decree in Eldoret ELC No. 24 of 2024 pending an intended appeal. The underlying dispute arose from sale agreements dated 9th July 2018 over two parcels of land, Sergoit/Koiwoptaoi Block 13/9 and Block 13/4. Block 13/9 was transferred to the first applicant, but the balance for Block 13/4 was unpaid; after a 21-day notice went unheeded, the respondent treated the agreement as rescinded. The ELC judge found the agreement lawfully terminated with time of the essence, dismissed the applicants' claim save for a refund less a 10% forfeited deposit, and allowed the respondent's counter-claim. The applicants lodged an intended appeal raising ten grounds. Applying the settled twin principles from Chris Munga N. Bichage and Stanley Kang'ethe Kinyanjui, the court found one bona fide arguable ground - whether the judge erred in finding breach of the agreement - and held that execution would render the appeal nugatory since the land or jointly held funds could change hands irreversibly. The court allowed the application, staying execution on condition that the applicants deposit Kshs. 10,000,000/= in a joint interest-earning account within 45 days, failing which the stay lapses. Costs of the application were ordered to abide the outcome of the appeal.

Key legal issues

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01

Whether the intended appeal is arguable under Rule 5(2)(b)

Holding

Yes - at least one bona fide arguable ground existed, namely whether the learned judge erred in finding the applicants in breach of the sale agreement.

Reasoning

The court considered whether there was at least a single bona fide arguable ground warranting ventilation. Without going into the merits, it held that the challenge to the finding of breach was a matter properly for resolution on appeal. It applied the Kang'ethe standard that an arguable appeal need not necessarily succeed but must not be frivolous, and that the court must avoid definitive findings at the interlocutory stage.

p. 4
02

Whether the intended appeal would be rendered nugatory if stay is not granted

Holding

Yes - execution could make the appeal outcome irreversible, since the jointly held funds or the land or both may change hands.

Reasoning

The court noted each case depends on its own facts and that nugatory-ness turns on whether what is to be stayed is reversible, and if reversible, whether damages would reasonably compensate. Because the dispute concerns rights under a land sale agreement rather than a pure money decree, execution could transfer the land or dissipate the jointly held funds, making any appellate success irreversible. Both prerequisites were therefore satisfied, subject to security.

p. 4

Legal principles established

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  • An applicant under Rule 5(2)(b) must demonstrate both that the appeal is arguable and that it would be rendered nugatory if stay is not granted; one limb alone is insufficient.
  • An arguable appeal is one that is not frivolous and ought to be argued fully; the court on a Rule 5(2)(b) application must not make definitive findings of fact or law.

Court orders

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  1. 1.Stay of execution of the decree and judgment issued in Eldoret ELC No. 24 of 2024 pending hearing and determination of the applicants' intended appeal
  2. 2.Applicants to deposit Kshs. 10,000,000/= in a joint interest-earning account in the names of the advocates for both parties within 45 days, failing which the stay lapses
  3. 3.Costs of the application to abide the outcome of the appeal
On appeal from
Environment and Land Court, Eldoret
ELC No. 24 of 2024
Jurisdiction invoked
Rule 5(2)(b) of the Court of Appeal Rules, 2022 and Articles 48 & 159 of the Constitution

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, "Kobilo Farm Limited & 1 other v Elfam Limited", Case Analysis (2025). Civil Application No. E210 of 2024 (Nakuru) - application dated 16th October 2024. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2025/834/eng@2025-05-16

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