Mohamed Alwy & another v En Group (K) International Limited [2022] KEELC 1498 (KLR)
The bottom line
#A Mombasa court paused a steep rent increase, but only because the tenants agreed to keep paying the old rent and deposit the disputed difference.
What this practically means
#Executive summary
#Key legal issues
#Whether the Appellants/Applicants met the threshold for stay of execution under Order 42 Rule 6 of the Civil Procedure Rules, 2010
The court found that although substantial loss was not fully demonstrated, the application was made without delay and it was in the interest of justice to grant stay on conditions securing the decretal sum.
The court applied the four conditions in Order 42 Rule 6: sufficient cause, substantial loss, absence of unreasonable delay and security. It found no delay as the application was filed within the same month as the tribunal's decision. Though the appellants failed to prove the respondent could not refund the decretal sum, the court held that a huge rent increase would strain the small-scale businesses, and that balancing the appellants' right to appeal against the respondent's right to enjoy its judgment required a conditional stay secured by deposit of the decretal sum in a joint escrow account.
Whether the appellants furnished security for costs
The appellants proposed no security, but the court exercised its own discretion to fix the security, directing a deposit of the accrued rental difference within 60 days.
The court held that it is not the respondent who demands security for costs; the court itself determines the security upon ordering stay to ensure due performance. Although the appellants proposed none, the court imposed the deposit of the rental sum ordered by the tribunal from 1st March 2021 to 24th September 2021 into an interest-earning joint escrow account, with the stay to lapse on failure to comply.
Legal principles established
#- The purpose of a stay of execution pending appeal is to preserve the subject matter in dispute while balancing the appellant's right of appeal against the decree holder's right to enjoy the fruits of the judgment.
- The conditions for stay under Order 42 Rule 6 are interconnected; absence of one affects the court's discretion.
- Substantial loss lies in the inability of the respondent to refund the decretal sum if the appeal succeeds.
- It is the court, not the respondent, that determines the security to be furnished upon granting stay.
Court orders
#- 1.Stay of execution of the BPRT ruling of 10th September 2021 granted pending hearing and determination of the appeal.
- 2.The 1st and 2nd Appellants/Applicants to continue paying the old and/or current tenancy rent to the Respondent until the appeal is heard and determined.
- 3.The 1st and 2nd Appellants/Applicants to provide security for costs by depositing the decretal sum being the rental sum as ordered by the BPRT from 1st March 2021 to 24th September 2021.
- 4.The decretal sum to be deposited in an interest earning escrow joint holding bank account in the names of Messrs. Michael Ngure & Company Advocates and Abdulrahaman Saad & Associates within 60 days, failing which the stay shall stand vacated.
- 5.Costs shall be in the cause.
- On appeal from
- Business Premises Rent Tribunal
- BPRT Case No. 308 of 2020 and BPRT Case No. 309 of 2020
- Jurisdiction invoked
- Order 42 Rule 6 of the Civil Procedure Rules, 2010; Sections 1A, 1B and 3A of the Civil Procedure Act, Cap. 21
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Mohamed Alwy & another v En Group (K) International Limited [2022] KEELC 1498 (KLR)", Case Analysis (2022). Appeal against BPRT Case No. 308 of 2020 and BPRT Case No. 309 of 2020; Notice of Motion dated 23rd September 2021. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2022/1498/eng@2022-02-09
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.