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ELCPartially AllowedAppeal against BPRT Case No. 308 of 2020 and BPRT Case No. 309 of 2020; Notice of Motion dated 23rd September 2021· [2022] KEELC 1498 (KLR)

Mohamed Alwy & another v En Group (K) International Limited [2022] KEELC 1498 (KLR)

Environment and Land Court
9 February 2022
3,649 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~15 min to read original · ~4 min brief

The bottom line

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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

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Executive summary

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This was a ruling on a Notice of Motion dated 23rd September 2021 by the 1st and 2nd Appellants/Applicants, seeking stay of execution of the ruling of the Business Premises Rent Tribunal delivered on 10th September 2021 in BPRT Case Nos. 308 and 309 of 2020, pending hearing of their appeal. The Tribunal had confirmed a landlord's rent increment effective 1st March 2021, raising the applicants' monthly rents from Kshs 10,000 and Kshs 4,500 to Kshs 50,000 and Kshs 10,000 respectively. The applicants argued the Tribunal failed to exercise its discretion judicially by ignoring valuation reports of Kshs 24,000 and Kshs 40,000, and relied on authority that stay preserves the subject matter of the appeal. The Respondent opposed, contending that no substantial loss or security was demonstrated and that it would suffer loss of income at a prime location. The court framed three issues: the Order 42 Rule 6 threshold, entitlement to the orders sought, and costs. Applying the four conditions, the court held there was no unreasonable delay since the application was filed within the same month as the decision; that substantial loss was not strictly proved as the applicants did not show the respondent could not refund the decretal sum; and that no security was proposed, though it is the court that fixes security. Balancing the appellants' right of appeal against the respondent's right to enjoy its judgment, the court allowed the application and granted a conditional stay: continued payment of old rent, deposit of the accrued decretal sum into an interest-earning joint escrow account within 60 days failing which the stay would lapse, and costs in the cause.

Key legal issues

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01

Whether the Appellants/Applicants met the threshold for stay of execution under Order 42 Rule 6 of the Civil Procedure Rules, 2010

Holding

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.

Reasoning

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.

p. 4
02

Whether the appellants furnished security for costs

Holding

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.

Reasoning

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.

p. 4

Legal principles established

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  • 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

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  1. 1.Stay of execution of the BPRT ruling of 10th September 2021 granted pending hearing and determination of the appeal.
  2. 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. 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. 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. 5.Costs shall be in the cause.

Authorities

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Legislation

  • Civil Procedure ActSections 1A, 1B, 3A
  • Civil Procedure Rules, 2010Order 42 Rule 6(1) and 6(2)

Cases cited (8)

  • The Public Service Commission & 72 Others v Okiya Omtata & 4 others
    Civil Appeal (Application) No. E131 of 2021
  • RWW v EKW
    (2019) eKLR
  • Hon. Attorney General v LSK & Anor
    Civil Appeal (Application) No. 133 of 2011
  • James Wangalwa & Anor v Agnes Naliaka Chesoto
    (2012) eKLR
  • Machira T/A Machira & Co Advocates v East African Standard No. 2
    (2002) eKLR 63
  • Tabro Transporters Ltd v Absalom Dova Lumbasi
    (2012) eKLR
  • Focin Motorcycle Co. Limited v Ann Wambui Wangui & Anor
    (2018) eKLR
  • Swanya Ltd v Daima Bank Ltd
    Civil Application No. 45 of 2001
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

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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, "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.