Njeru Industries Ltd & 2 others v I & M Bank Limited (Civil Application E548 of 2025) [2026] KECA 1102 (KLR)
The bottom line
#Kenya's Court of Appeal refused to stop a bank from enforcing charged property, ruling borrowers must prove both an arguable appeal and irreversible loss.
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 (raises bona fide, non-frivolous issues) under Rule 5(2)(b)
- 2.Whether, if the appeal succeeds, it would be rendered nugatory unless the interlocutory injunction is granted
- 3.Whether the Court should interfere with the superior court's exercise of discretion in declining injunctive relief
Key legal issues
#Arguability of the intended appeal
The intended appeal was not arguable; the Deed of Settlement on its face acknowledged indebtedness and the superior court committed no apparent misdirection of principle.
The Court found it undisputed that secured facilities were advanced and defaulted on. The Deed of Settlement and related instruments reflected an acknowledgment of indebtedness with agreed repayment terms. The superior court considered the material before it and found allegations of fraud, coercion and unconscionability unsubstantiated at the interlocutory stage. No apparent misdirection of principle or arguable question warranting appellate interrogation was demonstrated against the low but mandatory arguability threshold.
Nugatory aspect
Even assuming arguability, the appeal would not be rendered nugatory because the loss alleged is compensable by a financially capable regulated bank.
The subject matter comprised charged properties and business assets voluntarily offered as security, which upon default are available for realization. No irreversible loss or loss incapable of adequate monetary compensation was shown, particularly given the respondent's status as a regulated financial institution capable of restitution should the appeal succeed. Alleged harm to business, goodwill and estate interests remained insufficiently demonstrated.
Interference with superior court discretion
At an interlocutory appellate stage the Court interferes with a judge's discretion sparingly and only where the Rule 5(2)(b) threshold is clearly met.
The motion invited the Court to interfere with the superior court's exercise of discretion in declining interim injunctive relief. Following Mbogo v Shah, such interference requires a misdirection or that the judge was clearly wrong occasioning injustice. The Court held this jurisdiction must be exercised sparingly and only where the Rule 5(2)(b) threshold is clearly met, which was not satisfied here.
Legal principles established
#- An applicant under Rule 5(2)(b) must satisfy both the arguability and nugatory limbs cumulatively before the Court exercises its discretion.
- An arguable appeal need not succeed; it suffices that it raises at least one bona fide, non-frivolous issue deserving consideration.
- The Court of Appeal will not interfere with a judge's exercise of discretion unless the judge misdirected himself or was clearly wrong, occasioning injustice.
- Charged property voluntarily offered as commercial security is, upon default, available for realization, and sentimental or familial attachment does not defeat enforcement.
Court orders
#- 1.The motion dated 15th September 2025 seeking interlocutory injunctive relief pending the intended appeal is dismissed
- 2.The applicants to pay the costs of the application
The bench
#One judgment of the whole court — no separate or dissenting opinions.
- On appeal from
- High Court of Kenya
- Not stated
- Jurisdiction invoked
- Rule 5(2)(b) and Rule 47 of the Court of Appeal Rules, 2022
Relief refused
#Temporary injunction restraining the respondent from appointing administrators, taking over management, or realizing the charged properties pending the intended appeal
Applicants failed to satisfy the twin requirements of Rule 5(2)(b): no arguable appeal demonstrated and no nugatory aspect shown
Preservation of status quo over the 1st applicant's business, land and equipment
The securities were voluntarily charged and, upon default, are available for realization; losses alleged are compensable in damages
Costs
The motion dated 15th September 2025 is dismissed with costs (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.
The motion dated 15th September 2025 seeking interlocutory injunctive relief pending the intended appeal accordingly fails and is dismissed with costs.
These requirements are cumulative in the sense that both must be met before the Court can exercise its discretion in favour of the applicant.
An arguable appeal, for purposes of this jurisdiction, is not one that must necessarily succeed, but one that raises at least a bona fide and non- frivolous issue deserving of consideration on appeal.
The discretion of this Court is, therefore, not properly invoked in their favour.
Upon default, such securities are, by operation of law and contract, available for realization.
Issues in the judgment
#Discrepancy in the debt figures pleaded: the supporting affidavit and submissions refer to an outstanding amount of USD 6,250,000.00, while counsel for the applicants described the Deed of Settlement as reflecting an acknowledged debt of Kshs.6.25 million.
The judgment records that the application was heard on 16th December 2025 but delivered on 12th June 2026, a date later than the stated hearing; also the copy certification suggests typographical irregularities in the text (e.g. 'sufiered', 'refiected').
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Njeru Industries Ltd & 2 others v I & M Bank Limited (Civil Application E548 of 2025) [2026] KECA 1102 (KLR)", Case Analysis (2026). Motion dated 15th September 2025 (Court of Appeal, Rule 5(2)(b) application). Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2026/1102/eng@2026-06-12
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.