Chase Bank Kenya Limited (in Liquidation) v Equity Bank Kenya Limited & another (Civil Appeal (Application) E1075 of 2025) [2026] KECA 494 (KLR)
The bottom line
#The Court of Appeal allowed Equity Bank to proceed toward selling the Riverside Office Block because Chase Bank can be compensated in money if its appeal later succeeds.
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 the injunction sought is granted, the intended appeal, if successful, will be rendered nugatory
Key legal issues
#Arguability of the intended appeal
The intended appeal was arguable: at least one bona fide arguable issue was disclosed, satisfying the first limb of rule 5(2)(b).
The Court reviewed the Memorandum of Appeal, which raised issues including whether proper statutory notices under the Land Act were served on KDIC, the lawfulness of the conversion of the facility from USD to KES and the increase in interest, the effect of the Mareva injunction, and the applicant's claimed beneficial interest under the Declaration of Trust. Without pronouncing on the merits, the Court found these issues bona fide and deserving of consideration, satisfying the first limb.
Whether the appeal would be rendered nugatory absent the injunction
The appeal would not be rendered nugatory if the suit property were sold, because the respondent, a tier-1 bank, is capable of compensating the applicant in damages; the second limb of rule 5(2)(b) therefore failed.
The Court weighed competing contentions: the applicant argued the property would be irretrievably lost from the liquidation estate if sold, likely at undervalue, prejudicing depositors and creditors; the respondent argued the dispute was essentially monetary and compensable. The Court noted the respondent is an established financial institution capable of meeting any decree, and that the outstanding loan exceeding KES 1.3 billion continues to accrue interest, so further delay could see the debt outstrip the property's value. Any loss following a successful appeal is determinable and compensable.
Consequence of failing one limb of the rule 5(2)(b) test
Because the applicant satisfied only the arguability limb and not the nugatory limb, the application had to be dismissed.
The rule 5(2)(b) jurisdiction is granted only upon satisfaction of both limbs. The Court had already found the appeal arguable but found no nugatory risk given the respondent's capacity to compensate in damages. Since both limbs must be satisfied, the failure of the second limb was determinative and the application fell to be dismissed with costs to the respondent.
Legal principles established
#- On a rule 5(2)(b) application, an applicant must satisfy the Court both that the appeal or intended appeal is arguable and that, unless the orders sought are granted, the appeal if successful will be rendered nugatory; failure on either limb is fatal.
- An arguable appeal is not one that must ultimately succeed, but one that merits judicial interrogation on appeal; a single bona fide arguable ground suffices.
- Whether an appeal will be rendered nugatory depends on whether what is sought to be stayed, if allowed to happen, is reversible; or if not reversible, whether damages will reasonably compensate the aggrieved party.
Court orders
#- 1.Dismissal of the applicant's rule 5(2)(b) application
- 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 at Nairobi
- HCCOM No. E515 of 2025
- Jurisdiction invoked
- Sections 1A, 3A and 3B of the Appellate Jurisdiction Act and rule 5(2)(b) of the Court of Appeal Rules
Relief refused
#Injunction restraining the respondent from advertising for sale, disposing of, alienating or otherwise interfering with L.R. No. 4275/13 (I.R. 74510) - the Riverside Office Block, pending the intended appeal
The applicant failed to satisfy both limbs of the rule 5(2)(b) test: although an arguable issue was disclosed, the appeal would not be rendered nugatory because the respondent is capable of compensating the applicant in damages if it ultimately succeeds
Costs
The application was 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.
As the applicant has not satisfied both limbs under rule 5(2)(b) of this Court's Rules, we hereby dismiss this application with costs to the respondent.
It is trite law that in an application of this nature, an applicant must satisfy this Court that the appeal or the intended appeal is arguable, and that unless the orders sought are granted, the appeal, if successful, shall be rendered nugatory.
It is well settled that an arguable appeal is not one that must ultimately succeed, but one that merits judicial interrogation on appeal.
whether or not an appeal will be rendered nugatory depends on whether or not what is sought to be stayed, if allowed to happen, is reversible; or if it is not reversible, whether damages will reasonably compensate the party aggrieved.
If, after hearing the appeal, it turns out that the respondent ought not, in the circumstances, to have exercised its statutory power of sale, the value of the suit property is capable of being determined and the respondent will no doubt make good that loss.
Issues in the judgment
#The judgment gives inconsistent dates for the letter of variation: it first refers to a letter of variation dated 7th October 2021, and later, in the respondent's affidavit, to a letter of variation dated 30th September 2021.
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Chase Bank Kenya Limited (in Liquidation) v Equity Bank Kenya Limited & another (Civil Appeal (Application) E1075 of 2025) [2026] KECA 494 (KLR)", Case Analysis (2026). Rule 5(2)(b) application arising from intended appeal against HCCOM No. E515 of 2025. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2026/494/eng@2026-03-13
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.