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ELCDismissedNot stated in the judgment· [2020] KEELC 3633 (KLR)

Paragon Eletronics Limited v Nginyo Investment Limited [2020] KEELC 3633 (KLR)

Employment and Labour Relations Court
6 February 2020
EOE. O. Obaga
581 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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A Kenyan court refused to pause enforcement of an Kshs. 819,494 money award because the applicant couldn't show it would suffer real, irrecoverable loss if the money was paid out.

What this practically means

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Executive summary

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This ruling by E. O. Obaga, Judge, deals with a notice of motion dated 26th April 2019 in which the Applicant sought a stay of execution pending appeal against a ruling delivered on 15th April 2019 by M/s A N Makau, which had dismissed the Applicant's application for review and setting aside of a judgment awarding the Respondent Kshs.819,494.20 with costs and interest. The Applicant argued it had filed an appeal with high chances of success and that execution would render the appeal nugatory. The Respondent opposed, contending the appeal had no merits, that the Applicant had not complied with Order 42 Rule 6(2)(b), and disputing the Applicant's explanation for its counsel's absence at the hearing. The court framed a single issue: whether the Applicant met the threshold for stay pending appeal, namely absence of unreasonable delay, demonstration of substantial loss, and provision of security. The court found no unreasonable delay since the application was filed eleven days after the ruling. However, as this was a money decree, it was rare for an appeal to be rendered nugatory; the Applicant had not shown it could not recover the decretal sum if successful on appeal, and thus had not demonstrated substantial loss. The question of security did not arise. The application was dismissed with costs to the Respondent. Orders dated, signed and delivered at Nairobi on 6th February 2020.

Key legal issues

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01

Whether the threshold for grant of stay pending appeal under Order 42 Rule 6 was met

Holding

The application was filed timeously, but the Applicant failed to demonstrate substantial loss, which is the decisive condition; security need not be considered where substantial loss is not shown

Reasoning

The ruling sought to be appealed was delivered on 15th April 2019 and the application filed on 26th April 2019, so there was no unreasonable delay. However, this is a money decree and it is rare for an appeal on such a decree to be rendered nugatory, since the Applicant did not claim it would be unable to recover the decretal sum if it ultimately succeeded. Without demonstration of substantial loss, the conditions for stay are not met and the issue of security does not arise.

p. 1

Legal principles established

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  • An applicant for stay pending appeal must show: (1) the application was made without unreasonable delay; (2) substantial loss will be suffered if stay is not granted; (3) security for the due performance of the decree
  • In money decrees it is rare for an appeal to be rendered nugatory because the successful applicant can recover the decretal sum

Court orders

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  1. 1.The application for stay of execution pending appeal is dismissed with costs to the Respondent

Authorities

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Legislation

  • Civil Procedure RulesOrder 42 Rule 6(2)(b)
On appeal from
Trial court (ruling by M/s A N Makau)
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, "Paragon Eletronics Limited v Nginyo Investment Limited [2020] KEELC 3633 (KLR)", Case Analysis (2020). Not stated in the judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2020/3633/eng@2020-02-06

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