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Court of AppealDismissedNotice of Motion dated 17th February 2025 (Civil Application under Rule 5(2)(b))· [2026] KECA 1525 (KLR)

Northern Construction Company Ltd & 3 others v Kcb Bank Kenya Limited

Court of Appeal of Kenya
31 July 2026
1,246 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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Kenya's Court of Appeal refused to pause a billion-shilling judgment because the winning bank can easily repay if the appeal later succeeds.

What this practically means

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Executive summary

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This is a single-judgment decision of the Court of Appeal at Nairobi (W. Karanja, L. Achode and Ahmed Hassan, JJ.A) dismissing a Notice of Motion dated 17th February 2025 brought under Rule 5(2)(b) of the Court of Appeal Rules seeking stay of execution of a ruling by Mabeya J. delivered on 27th November 2024 in Nairobi High Court Commercial Suit No. E302 of 2023. In that ruling, the High Court declined to set aside a default judgment entered against the applicants, who had failed to enter appearance or file a defence despite service by email and WhatsApp. Before the Court of Appeal, the applicants argued the intended appeal was arguable on service, default judgment, and judicial discretion, and that execution of a decretal sum of approximately Kshs.1,865,818,122.65 would render the appeal nugatory. The respondent countered that service was effected through recognised modes, that the judgment was regular, and that as one of Kenya's largest banks, with an asset base exceeding Kshs.1.3 trillion, it could refund any sums if the appeal succeeded; no security was offered by the applicants. Applying the settled two-limb, conjunctive Rule 5(2)(b) test as restated in Stanley Kang'ethe Kinyanjui v Tony Ketter, Reliance Bank Ltd v Norlake Investments and Republic v Kenya Anti-Corruption Commission, the Court found the intended appeal not arguable, since it attacked findings properly grounded on evidence without any prima facie error of principle, and found the nugatory limb unmet for a money decree where restitution capacity was unrebutted. The application was dismissed with costs to the respondent. The decision below was not disturbed, as this was an interlocutory application, not the appeal itself.

Key legal issues

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01

Whether the intended appeal was arguable

Holding

It was not; the appeal merely attacked findings properly grounded on evidence, with no prima facie error of principle by the High Court judge.

Reasoning

The Court reviewed the draft memorandum of appeal and the impugned ruling. The intended appeal challenged the refusal to set aside default judgment, i.e. the exercise of discretion. Evidence of service by email and WhatsApp was uncontested, and appearance was entered late for some applicants. The Court found no substantial question capable of disturbing the discretion and no obvious error of principle, so the arguability limb failed.

p. 3
02

Whether the intended appeal would be rendered nugatory without stay

Holding

It would not; the decree is monetary, the respondent demonstrably has the financial capacity to refund, and the applicants offered no security.

Reasoning

For money decrees, the applicant must show the respondent cannot refund. The respondent deponed that it is one of Kenya's largest banks with an asset base exceeding Kshs.1.3 trillion and can refund any sums; that deposition was unrebutted. The applicants also offered no security for due performance of the decree, which further militated against the exercise of the Court's discretion in their favour.

p. 3

Legal principles established

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  • An applicant under Rule 5(2)(b) must satisfy both conjunctive limbs: an arguable appeal and that the appeal will be rendered nugatory absent stay.
  • For a money decree, the nugatory limb requires the applicant to show that the respondent would be unable to refund the decretal sum if the appeal succeeds; failure to offer security for due performance weighs against granting stay.
  • An appellate court is slow to interfere with the exercise of judicial discretion absent misdirection in law, consideration of irrelevant matters, failure to consider relevant matters, or a plainly wrong conclusion.

Court orders

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  1. 1.The Notice of Motion dated 17th February 2025 is dismissed
  2. 2.Costs of the application are awarded to the respondent
On appeal from
High Court of Kenya at Nairobi
Nairobi High Court Commercial Suit No. E302 of 2023
Jurisdiction invoked
Rule 5(2)(b) of the Court of Appeal Rules

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, "Northern Construction Company Ltd & 3 others v Kcb Bank Kenya Limited", Case Analysis (2026). Notice of Motion dated 17th February 2025 (Civil Application under Rule 5(2)(b)). Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2026/1525/eng@2026-07-31

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