One Upperhill Towers Limited v Credit Bank Limited & 2 others
The bottom line
#Kenya's Court of Appeal refused to stop the auction of a property securing an unpaid Kshs.1.2 billion loan, confirming that defaulting borrowers rarely win injunctions.
What this practically means
#Executive summary
#Key legal issues
#Test for injunction pending appeal under Rule 5(2)(b)
The twin tests are arguability and nugatory-ness; the arguability threshold is low and requires only serious questions of law.
The Court reaffirmed that its Rule 5(2)(b) jurisdiction is original and discretionary. The applicant need not show the grounds will succeed, only that they raise serious questions of law worthy of consideration. However, arguability alone is insufficient; the applicant must also simultaneously satisfy the nugatory limb, assessed on the circumstances of each case and the conflicting claims of the parties.
Nugatory-ness where the applicant is in default under a charge
A heavily indebted chargor in unremedied default does not satisfy the nugatory limb, as the bank can compensate if the sale is later found wrongful.
The debt exceeded USD 15 million and was growing; counsel could not show the loan was being serviced. Injunctions are equitable. Upon default the charged property becomes a commodity for sale and the chargee's right to realise security is established. If notices turn out to be procedurally defective, the ascertained value of the property, if sold, can be paid, so the appeal would not be rendered nugatory.
Effect of alleged defective statutory notices and undervaluation on interlocutory relief
Alleged procedural defects in statutory notices do not by themselves justify injuncting a chargee in default at the Rule 5(2)(b) stage.
The applicant argued defective notices under sections 89, 90 and 96 of the Land Act and undervaluation contrary to section 97(2). The High Court had found default, notices, a redemption notice and valuation. The Court of Appeal treated these as arguable but insufficient without the nugatory limb, noting that any loss is compensable and citing Mrao Limited v First American Bank of Kenya Limited against injuncting a defaulting chargor.
Legal principles established
#- An applicant under Rule 5(2)(b) must demonstrate an arguable ground and that the appeal will be rendered nugatory if the injunction is not granted; arguability need only raise serious questions of law worthy of consideration, not probable success
- Where a chargor is in clear default, the charged property becomes a commodity for sale, and the mortgagee's right to realise the security arises upon default; such an applicant will ordinarily not deserve an injunction where damages can compensate
Court orders
#- 1.Dismissal of the notice of motion dated with the notice of appeal
- 2.Costs of the application to the respondents
- On appeal from
- High Court of Kenya at Nairobi
- HCCOM No. E053 of 2025
- Jurisdiction invoked
- Rule 5(2)(b) of the Court of Appeal Rules, 2022
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "One Upperhill Towers Limited v Credit Bank Limited & 2 others", Case Analysis (2025). Civil Application No. NAI E??? of 2025 (Rule 5(2)(b) application in intended appeal from HCCOM No. E053 of 2025). Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2025/1960/eng@2025-11-21
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.