Manguo Development Company Limited & 7 others v I&M Bank Limited (Civil Application E567 of 2024) [2025] KECA 1972 (KLR)
The bottom line
#The Court of Appeal refused to halt the sale of Limuru Mall, ruling the developers could be compensated with money if their appeal later succeeded.
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, unless a stay of execution or injunction is granted, the intended appeal would be rendered nugatory
Key legal issues
#Arguability of the intended appeal
The applicants raised bona fide issues worth consideration, including whether the bank was in breach in calling default on sums not fully disbursed and in charging interest on the full facility during the moratorium.
The court noted the applicants' complaint that the trial court effectively determined the entire suit at interlocutory stage, and that there were arguable questions on the bank's levy of interest on the undispersed Kshs.450 million and its calling of default on an incomplete project. Arguability is met where a bona fide issue worth of consideration is raised, and the applicants met that threshold.
Whether the appeal would be rendered nugatory without a stay
The second limb failed: the applicants admitted indebtedness, the property had been sold to a third party not joined to the application, and damages would adequately compensate them.
The court observed that the applicants admitted their indebtedness and that the property was charged as security; the suit property had been sold by auction to a third party who was not joined and who would be prejudiced by the orders sought; and, the debt being undisputed, the applicants could be adequately compensated by damages if the appeal succeeded. The application was therefore dismissed.
Legal principles established
#- An applicant under rule 5(2)(b) must satisfy both the arguability limb and the nugatory-appeal limb before relief can be granted.
- Both limbs must be demonstrated; satisfying one alone is insufficient.
- An appeal is rendered nugatory where the effect of refusing a stay is irreversible, or where damages will not reasonably compensate the aggrieved party.
Court orders
#- 1.The application dated 28th October 2024 is dismissed
- 2.Costs of the application 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 (Milimani)
- HC. COMM Case No. 6 of 2019
- Jurisdiction invoked
- Rule 5(2)(b) of the Court of Appeal Rules, 2022
Relief refused
#Stay of execution of the High Court ruling of 14th October 2024 (or maintenance of status quo ante) pending the intended appeal
The applicants failed to satisfy the second limb: they can be adequately compensated by damages, and the purchaser was not joined to the application.
Costs
The application dated 28th October 2024 is 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.
An applicant has to satisfy two requirements. Firstly, that he or she has an arguable appeal. Secondly, that unless an order of stay is granted, the appeal or intended appeal would be rendered nugatory.
the purpose of a remedy under rule 5(2)(b) is to preserve the subject matter of the appeal
the applicants can be adequately compensated by way of damages in the event their appeal succeeds
The application dated 28th October 2024 is accordingly found not to have merit, and is hereby dismissed with costs to the respondent.
the suit property has since been sold by way of auction to a third party, who has not been joined to this application or appeal, and who will be prejudicially afiected by any orders given on the application
Issues in the judgment
#Recurrent OCR corruption of the word 'effect'/'offer' ('efiect', 'oier', 'sufiicient', 'afiected') which may affect character-matching of verbatim quotes.
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Manguo Development Company Limited & 7 others v I&M Bank Limited (Civil Application E567 of 2024) [2025] KECA 1972 (KLR)", Case Analysis (2025). Civil Application (Court of Appeal, Nairobi) arising from Milimani HC. COMM Case No. 6 of 2019. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2025/1972/eng@2025-11-21
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.