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ELCPartially AllowedNot stated in the judgment (Notice of Motion dated 30th October, 2024)· [2025] KEELC 1120 (KLR)

Petrazo Limited (Formerly Brighton Limited) & another v New Oshwal Distributor Limited & 4 others (Environment & Land Case E031 of 2022) [2025] KEELC 1120 (KLR)

Environment and Land Court
7 March 2025
6,482 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~26 min to read original · ~4 min brief

The bottom line

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A Mombasa court paused collection of a Kshs. 42 million judgment, but only if the losing company deposits Kshs. 21 million in a joint escrow account within 30 days.

What this practically means

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Executive summary

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This is a ruling of the Environment and Land Court at Mombasa (Naikuni J) on a Notice of Motion dated 30th October, 2024 by the 1st Defendant/Applicant, New Oshwal Distributors Limited, seeking stay of execution of the judgment delivered on 8th October, 2024, in which Kshs. 42,000,000 was awarded to the Plaintiff/Respondent, plus security of Kshs. 1,000,000 or, alternatively, retention of rent by the Respondents for two years pending appeal. The application was brought under Sections 1A, 1B, 3A, 38A and 51 of the Civil Procedure Act and Order 42 Rule 6(2) of the Civil Procedure Rules. The Respondent opposed through a Replying Affidavit of Manoj Shah, arguing the application failed to demonstrate an arguable appeal or substantial loss, that the security offer was grossly inadequate, and that any stay should be conditional on deposit of the full decretal sum in a joint interest-earning account. The court framed three issues: whether the application was merited, entitlement to reliefs, and costs. Applying Order 42 Rule 6(2), it found substantial loss proved, no undue delay (application filed 22 days after judgment, with a Notice of Appeal filed on the day of judgment), and held the security question was for the court, not the applicant, to determine. Although the three conditions are conjunctive, the court granted stay conditional on deposit of Kshs. 21,000,000 (half the decretal sum) in a joint escrow interest-earning account in the names of the three law firms within 30 days, failing which the application stands dismissed and execution may proceed. It made no orders as to costs.

Key legal issues

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01

Substantial loss

Holding

The Applicant proved it will suffer substantial loss if stay is not granted

Reasoning

Relying on Kenya Shell Ltd and Mukuma v Abuoga, the court found that the applicant demonstrated real risk that the decretal sum of Kshs. 42,000,000, if paid out, could not be recovered if the appeal succeeded. The respondent had not shown means to refund the decretal sum, so execution would render the intended appeal nugatory.

p. 10
02

Undue delay

Holding

The application was filed without undue delay

Reasoning

Judgment was delivered on 8th October 2024, a Notice of Appeal was filed the same day, and the application was filed on 30th October 2024, about 22 days after judgment. The court assessed the application as timeous and expeditious, satisfying the second condition under Order 42 Rule 6(2).

p. 10
03

Security for due performance

Holding

Stay granted conditionally on deposit of half the decretal sum (Kshs. 21,000,000) in a joint interest-earning escrow account

Reasoning

Although the applicant offered only Kshs. 1,000,000, the court held it is not bound by the type of security offered and must order appropriate security given that money depreciates. Guided by Aron C. Sharma and Gianfranco Manenthi, security is meant to guarantee due performance, not punish the judgment debtor, and the court fixed the quantum at half the decretal sum.

p. 11
04

Costs

Holding

No orders as to costs despite costs following the event

Reasoning

Costs follow the event under Section 27(1) of the Civil Procedure Act and the successful party ordinarily gets costs. However, the court expressly reserved its discretion and declined to award costs on this application, ordering that each party bear its own costs.

p. 12

Legal principles established

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  • The three conditions for granting stay of execution pending appeal under Order 42 Rule 6(2) are conjunctive and must all be met
  • The purpose of a stay of execution pending appeal is to preserve the subject matter of the dispute so the appeal, if successful, is not rendered nugatory

Court orders

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  1. 1.The Notice of Motion application dated 30th October, 2024 be and is hereby found to have merit and hence allowed subject to the fulfilment of the Pre-Conditions stated herein.
  2. 2.An order to stay the execution of the decree arising from the Judgment delivered on 8th October, 2024 pending the hearing and determination of the intended appeal in the Court of Appeal.
  3. 3.The 1st Defendant/Applicant to deposit Kshs. 21,000,000 as security in a Joint Escrow bank account in the names of Messrs. Taibjee & Bhalla Advocates LLP, S. Ruwa & Co. Advocates and Mutua-Waweru & Co Advocates within 30 days from delivery of the ruling pending the appeal.
  4. 4.Failure to comply with the security condition, the Notice of Motion shall automatically stand dismissed and execution of the Decree shall ensue procedurally as provided for by law.
  5. 5.There shall be no orders as to costs.
Jurisdiction invoked
Sections 1A, 1B, 3A, 38A and 51 of the Civil Procedure Act Cap. 21 and Order 42 Rule 6(2) of the Civil Procedure Rules 2010

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, "Petrazo Limited (Formerly Brighton Limited) & another v New Oshwal Distributor Limited & 4 others (Environment & Land Case E031 of 2022) [2025] KEELC 1120 (KLR)", Case Analysis (2025). Not stated in the judgment (Notice of Motion dated 30th October, 2024). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2025/1120/eng@2025-03-07

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