Kenol Kobil Plc v Canarian Holdings Limited (Environment & Land Case 111 of 2019) [2025] KEELC 335 (KLR)
The bottom line
#A Mombasa court allowed Rubis Energy to secure pending mesne profits with a bank guarantee instead of deposits, but still ordered Rubis to pay the defendant's legal costs.
What this practically means
#Executive summary
#Key legal issues
#Whether the court was functus officio or being asked to sit on appeal on its own ruling of 19th June 2024
The application was in substance one for review under section 80 of the Civil Procedure Act and Order 45; the court could treat it as such despite the omission of the review provisions, and after varying the conditions declared itself functus officio.
The court reasoned that although the application avoided the label and limits of review, it comprised all the tenets of a review. Citing superior court decisions on the 'sufficient cause' ground and its analogous nature, the court exercised its discretion to treat the motion as a review and vary the stay conditions, thereafter declaring itself functus officio.
Whether a bank guarantee could substitute for continued deposit of accruing mesne profits
A bank guarantee adequate to cover two years' mesne profits at the decreed rate was sufficient security, granted within 14 days.
The court found it impossible to predict the appeal's duration or the exact accruing mesne profits, and held that a bank guarantee would sufficiently cover future mesne profits, which are unlikely to be as substantial as the already-deposited decretal sums. Guided by Westmont Holdings, it balanced the parties' interests and partially allowed prayer 3.
Whether the plaintiff's application was brought in bad faith (mala fides)
No mala fides; the plaintiff's deposit of the decretal amounts, though late, evidenced good faith and partial compliance.
The court observed that both parties admitted the decretal amounts had been deposited and that the defendant appeared to accept this as partial compliance. The only outstanding element was the monthly mesne profits, so the court found no mala fides in filing the application.
Who bears the costs of the application
Although the plaintiff partially succeeded, it was ordered to bear the defendant's costs.
Applying section 27 of the Civil Procedure Act, the court noted that costs follow the event but exercised discretion to award the defendant costs because the plaintiff only partially succeeded on what was essentially a discretionary application.
Legal principles established
#- An application to vary conditions attached to a stay order is in substance an application for review under section 80 of the Civil Procedure Act and Order 45 of the Civil Procedure Rules.
- Where a motion fails to cite the review provisions as required by Order 51 Rule 10, the court may nonetheless treat it as one for review.
- A court retains discretion to vary conditions of its own stay orders, including permitting a bank guarantee as sufficient security.
Court orders
#- 1.Prayer 3 of the notice of motion dated 15th August 2024 granted limited to the plaintiff being allowed to provide a bank guarantee as security for payment of a sum adequate to cover two (2) years' mesne profits at the rate decreed in the judgment delivered on 25th October 2023, within fourteen (14) days, pending hearing and determination of the appeal.
- 2.The defendant is awarded the costs in the application.
- 3.Should the plaintiff fail to comply, the defendant is at liberty to claim the release of the security deposited and execute for any balance and accrued mesne profits as decreed in the judgment.
- Jurisdiction invoked
- Sections 1A, 1B and 3A of the Civil Procedure Act and section 3 of the Environment and Land Court Act
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Kenol Kobil Plc v Canarian Holdings Limited (Environment & Land Case 111 of 2019) [2025] KEELC 335 (KLR)", Case Analysis (2025). ELC Mombasa (Notice of Motion dated 15th August 2024). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2025/335/eng@2025-01-29
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.