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ELCPartially AllowedApplication dated 16/4/2018 (arising from judgment delivered 5/4/2018)· [2018] KEELC 3078 (KLR)

Water Resources Management Authority v Krystalline Salt Limited [2018] KEELC 3078 (KLR)

High Court of Kenya
30 May 2018
1,651 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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The High Court paused enforcement of a Kshs 3 billion judgment, but only because the losing company promised a Kshs 1 billion bank guarantee within 45 days.

What this practically means

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Executive summary

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This is a ruling by the High Court (K. Bor, J) on the Defendant's application dated 16/4/2018 seeking stay of execution of the judgment delivered on 5/4/2018, pending the Defendant's appeal, in a suit in which a decree of over Kshs. 3 billion (principal judgment sum of Kshs. 2,079,590,000 with accrued interest to Kshs. 3,098,589,098) was entered against the Defendant. The Defendant, a salt manufacturer employing over 2,800 staff, argued it had filed a Notice of Appeal, applied within 3 days, that the decree far exceeded its assets (Kshs. 700 million as at 2017), that execution would shut down its business, and that the Plaintiff, a public body named in the National Budget as having non-performing loans, could not refund the sum if the appeal succeeded. It offered a bank guarantee of Kshs. 50–100 million, contending the true decree should be about Kshs. 17 million. The Plaintiff opposed, relying on the Defendant's provisional 2017 accounts showing a profit of over Kshs. 2.49 billion including a WARMA provision of Kshs. 2,079,455,000, and proposed deposit of half the decretal sum (Kshs. 1.5 billion) in a joint interest-earning account, citing Antoine Ndiaye v. African Virtual University. The Defendant distinguished that case. The court granted a stay of execution conditional on the Defendant furnishing a bank guarantee from a reputable bank for Kshs. 1 Billion within 45 days, with each party bearing its own costs.

Key legal issues

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01

Conditions for stay under Order 42 Rule 6

Holding

The three conditions — no inordinate delay, substantial loss, and willingness to furnish security — framed the court's enquiry, and stay was granted subject to security

Reasoning

The Defendant applied within 3 days of the judgment, claimed the decree exceeded its assets and that the Plaintiff could not refund the sum on appeal, and offered a bank guarantee. The court accepted that security should be furnished but fixed its quantum at Kshs. 1 Billion, taking into account the Defendant's provisional accounts showing a 2017 profit of Kshs. 2,496,890,535 and a WARMA provision of Kshs. 2,079,455,000 made in anticipation of the claim.

p. 2
02

Quantum and form of security

Holding

Security must meet the performance of the decree; the court has discretion on the amount depending on circumstances

Reasoning

The Plaintiff relied on Antoine Ndiaye v. African Virtual University where half the decretal sum was paid and half deposited; the Defendant distinguished it as involving no demonstrated substantial loss. The Defendant conceded the court's discretion on the amount of security. The court balanced the parties' interests, considering the Defendant's audited-provisional financials and ordered a Kshs. 1 Billion bank guarantee as the condition for stay.

p. 2

Legal principles established

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  • Stay of execution pending appeal may be granted conditional on the applicant furnishing security for the due performance of the decree

Court orders

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  1. 1.Stay of execution of the decree granted on condition that the Defendant furnishes security by way of a bank guarantee from a reputable bank for the sum of Kshs. 1 Billion within 45 days
  2. 2.Each party to bear its own costs

Authorities

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Legislation

  • Civil Procedure RulesOrder 42 Rule 6

Cases cited (1)

  • Antoine Ndiaye v. African Virtual University
    [2015] eKLR
Jurisdiction invoked
Order 42 Rule 6 of the Civil Procedure Rules (stay of execution 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, "Water Resources Management Authority v Krystalline Salt Limited [2018] KEELC 3078 (KLR)", Case Analysis (2018). Application dated 16/4/2018 (arising from judgment delivered 5/4/2018). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2018/3078/eng@2018-05-30

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