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Court of AppealAllowedNot stated in the judgment· [2026] KECA 232 (KLR)

Sbm Holdings Limited v Sultan Khimji (suing As The Seller's Representatives On Behalf of The Former Shareholders of Fidelity Commercial Bank Limited) & 1 other

Court of Appeal of Kenya
13 February 2026
2,155 words in judgment
View original judgmentRead on Kenya Law Watch case
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·~9 min to read original · ~4 min brief

The bottom line

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Kenya's Court of Appeal paused a High Court commercial case, holding a company denied a fresh chance to seek arbitration had an arguable appeal involving the constitutional right to a fair hearing.

What this practically means

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Executive summary

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This is a ruling of the Court of Appeal, Nairobi, on a notice of motion dated 3rd March 2025 brought by S.B.M. Holdings Limited under Rule 5(2)(b) of the Court of Appeal Rules, seeking a stay of proceedings in Nairobi High Court Commercial Case No. E333 of 2022 pending an intended appeal against a High Court ruling of 20th February 2025. That ruling had dismissed the applicant's application under section 6 of the Arbitration Act to stay the Kenyan proceedings pending LCIA arbitration, on the basis that the issue had already been determined by an earlier ruling of 28th July 2023 delivered before the applicant was joined to the suit. The applicant contended it was denied its right to be heard under Article 50 of the Constitution and section 6 of the Arbitration Act, and that the dispute was already subject to a foreign anti-suit injunction and an LCIA jurisdictional ruling. The 1st respondent opposed, arguing the appeal was an attempt to re-litigate settled jurisdictional findings, that the applicant had not approached the court with clean hands, and that a stay would prejudice its right to an expeditious trial. Applying the two-limb Rule 5(2)(b) test, the Court found a single bona fide arguable ground on the alleged denial of the right to be heard, and held that because the intended appeal engages the non-derogable Article 50(1) right to a fair hearing, the balance tilted in favour of a stay. The Court allowed the application, stayed further proceedings in the High Court until the appeal is heard and determined, and ordered that costs abide the outcome of the appeal. The decision below was not disturbed; the Court of Appeal granted an interlocutory stay pending the appeal.

Key legal issues

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01

Whether the intended appeal is arguable where the applicant, joined after an earlier stay ruling, was refused a fresh section 6 Arbitration Act stay application

Holding

The Court found at least one bona fide arguable ground: whether the applicant was denied the right to be heard under section 6 of the Arbitration Act and Article 50 of the Constitution given it was not a party when the earlier ruling was delivered.

Reasoning

Applying Stanley Kang'ethe Kinyanjui v Tony Ketter, the Court held an arguable appeal need not succeed but must not be frivolous, and no definitive findings should be made at that stage. The applicant raised five grounds; two went to whether the trial Judge erred in holding the only remedy was appeal of the Mabeya, J. ruling when the applicant was admittedly not a party to it. That raised a genuine question of the right to be heard fit for full ventilation on appeal.

p. 4
02

Whether the appeal would be rendered nugatory if the High Court proceedings continue

Holding

Because the intended appeal concerns the non-derogable Article 50(1) right to a fair hearing, the nugatory limb was satisfied and a stay was warranted.

Reasoning

The Court noted the serious, grave and fundamental interruption a stay causes, citing Meta Platforms and NNPC v Odidere Enterprises, and the general practice of not granting stays. However, the applicant's asserted right to a fair hearing is non-derogable under Article 50(1). If the trial proceeded and the appeal later established a fair-hearing violation, the prejudice would be irreversible; therefore the balance tilted toward staying proceedings until the appeal is determined.

p. 4

Legal principles established

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  • An appeal under Rule 5(2)(b) must satisfy both limbs: a single bona fide arguable ground, and that the appeal will be rendered nugatory unless a stay is granted.
  • Where the subject of an intended appeal implicates the non-derogable right to a fair hearing under Article 50(1) of the Constitution, the balance tilts in favour of a stay of proceedings.

Court orders

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  1. 1.An order of stay of further proceedings in High Court Commercial Case No. E333 of 2022 until the hearing and determination of the applicant's appeal
  2. 2.Costs to abide the outcome of the appeal
On appeal from
High Court of Kenya
Nairobi High Court Commercial Case No. E333 of 2022
Jurisdiction invoked
Rule 5(2)(b) of the Court of Appeal Rules (application for stay of proceedings pending appeal)

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, "Sbm Holdings Limited v Sultan Khimji (suing As The Seller's Representatives On Behalf of The Former Shareholders of Fidelity Commercial Bank Limited) & 1 other", Case Analysis (2026). Not stated in the judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2026/232/eng@2026-02-13

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