Murira & 26 others v China Communications Construction Company Limited (Environment and Land Case 2 of 2020) [2025] KEELC 5749 (KLR)

FRED DSOUZA ONGWARE ............................................................ 20TH PLAINTIFF STENLEY MARETE JACKSON ....................................................... 21ST PLAINTIFF BOB SITATI KHAREMWA .............................................................. 22ND PLAINTIFF ANDREW KAGWA ONYAMO ........................................................ 23RD PLAINTIFF ANTHONY KUNGU KIARIE ......................................................... 24TH PLAINTIFF DENNIS WAFULA WAMALWA ...................................................... 25TH PLAINTIFF JANET NIELSEN NAMALWA ......................................................... 26TH PLAINTIFF JOSEPH MWANGI THATI ............................................................... 27TH PLAINTIFF AND CHINA COMMUNICATIONS CONSTRUCTION COMPANY LIMITED .................................................................................................. DEFENDANT RULING In respect of the notice of motion dated 16th April, 2025 seeking stay of execution of judgment delivered on 10/2/2025 and taxation proceedings Background 1. The Defendant/Applicant’s Notice of Motion dated 16th April, 2025 brought under Order 42 Rule 6(1) and (2) of the Civil Procedure Rules and Sections 1A, 1B and 3A of the Civil Procedure Act seeks for the following prayers; a. Pending hearing and determination of the Applicant intended Appeal, this Honorable court be pleased to stay the execution of the judgment delivered on 10/2/2025 by the Honorable Justice Gicheru and further consequential orders and decree. b. The Court be pleased to grant an order of stay of taxation proceedings in this matter pending the hearing and determination of the Applicant Intended Appeal. c. Costs of the Application be in cause. 2. The Motion is premised on the grounds on the face of it and Supporting Afidavit sworn by the Defendant’s Project Manager, Mr. Wen Yukun on 16th April, 2025. The deponent depones that the judgment delivered on 10th February, 2025 and subsequently reviewed on 12th March, 2025 directed the Defendant/Applicant to pay the Plaintifis Ksh. 32,122,100/=, with interest and costs. 3. It is averred that the Defendant/Applicant has filed a Notice of Appeal and requested courts proceedings for purposes of preparing the record of Appeal because it is aggrieved with the judgment. The deponent decries that execution proceedings might be commenced against the Defendant because the Plaintifis has served it with a decree demanding payment. Further taxation of the Bill of costs dated 3rd March, 2025 has been served upon the Defendant amounting to Ksh. 2,057,940/= and is scheduled for taxation on 26th May, 2025. 4. According to the Defendant, if the orders sought are not granted, it will sufier irreparable loss because it may not be refunded the monies should the Appeal succeed hence rendering it a nugatory. The https://new.kenyalaw.org/akn/ke/judgment/keelc/2025/5749/eng@2025-07-31 2

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Defendant insists that its appeal is arguable and has high chances of success. The Defendant further alleges that it is willing to comply with any conditions imposed on stay including depositing 50% of the decretal sum amounting to Ksh. 16,061,051/= as security in court within 40 days. Plaintifi ’s case 5. The Application is opposed by the Plaintifis through the replying afidavit of William Mungai Murira sworn on 6th May, 2025 who avows that the application has not met the threshold required for issuance of the orders sought because the Defendant has not demonstrated that it shall sufier substantial loss if the orders are not granted. It if further alleged that the Application seeks to forestall the taxation of the Plaintifis/Respondents’ Bills of Costs dated 3rd March, 2025 scheduled for taxation on 26th May, 2025. According to the Plaintifis, taxation proceedings ought to proceed to conclusion because they are independent of the Appeal. 6. The Plaintifi’s maintains that they are entitled to enjoy the fruits of their judgment given their suit has been concluded after five years in court. The Plaintifis claims that Kenya Revenue Authority tax evasion claims against the Defendant assessed at Ksh. 1,047,557,661/= were upheld by the Tax Tribunal on 9th August, 2024. Given that the Defendant is a foreign company registered in Kenyan and whose assets are unknown, it is likely to fold up and leave the country and the court’s jurisdiction while avoiding payment of the decretal sum and interest amounting to Ksh. 52,038,450/= and Ksh. 2,057,940.26/= respectively. 7. According to the Plaintifi, the Appeal is not arguable and has no chances of success because the restoration costs estimated at Ksh, 28,922,500 which were adopted by the court in its judgment were arrived at by an independent umpire appointed by the court to undertake the survey. The Plaintifis accuses the Defendant/Applicant of refusal to settle the decretal sum as ordered by the court yet its witness, DWI, a geologist admitted that the Defendant’s activities damaged the Plaintifis’ houses. 8. The Plaintifis opine that stay of execution should be granted on conditions that the Defendant pays the admitted costs amounting to Ksh. 11,960,000/= to them and which was proposed by its quantity surveyor, Ann Omufira, for restoring the plaintifis’ houses while the balance of Ksh. 42,136,390.26/= relating to judgment sum, interests and costs should be deposited in a joint interest earning account. Defendant’s Rejoinder 9. The Plaintifis assertions are denied through a further afidavit by the 1st Defendant’s Project Manager, Wen Yukun sworn on 19th May, 2025 who restates that the Defendant will sufier substantial loss if stay of execution is not granted. This is because pursuing and tracing the Plaintifis to refund the decretal sum might be impossible. The Defendant asserts that given its international reputation, it cannot leave the court’s jurisdiction because it is undertaking infrastructure projects in Kenya. Accordingly, its right to appeal if dissatisfied with court decision must be balanced against the Plaintifis’ right to enjoy the fruits of their judgment. 10. It is the Defendant’s case that it is not in a position to raise decretal sum of Ksh. 54,096,390.06/= proposed by the Plaintifis because it might cripple its ability to deliver ongoing infrastructure projects and defeat its right to appeal. It further denies ever admitting liability of damaging the Plaintifis’ houses; this is indeed one of the grounds of its Appeal. https://new.kenyalaw.org/akn/ke/judgment/keelc/2025/5749/eng@2025-07-31 3

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Courts directions 11. When the Application came up for inter partes hearing on 14th May, 2025, with the concurrence of the parties, the Court directed that the Application be disposed of through written submissions. Both sides complied and the court has had occasion to consider the submissions in writing this ruling. Issues for determination 12. Having considered the application in its entirely, the Plaintifis’ response as well as the submissions filed, the following issues present themselves for determination; a. Whether the Defendant has met the threshold for grant of stay of execution orders pending the hearing and determination of its intended Appeal; and b. Whether an order for stay should be issued in respect of the Taxation proceedings. Analysis and determination A. Whether the Defendant has met the threshold for grant of stay of execution orders pending the hearing and determination of its intended Appeal 13. 14. Order 42 Rule 6(2) of the Civil Procedure Rules stipulates that an Applicant for orders of stay of execution must satisfy the following conditions to enable court issue stay of execution orders in their favor; a. The Court is satisfied that the Applicant has established suficient cause. b. The court is satisfied the Applicant will sufier substantial loss if order is not granted. c. Application is made without undue delay. d. Security for due performance of decree or orders. While making reference to the above cited provisions, the Court of Appeal in Halai & another v Thornton & Turpin (1963) Ltd [1990] KECA 65 (KLR) stated as follows in respect to the conditionalities for stay of execution; “ The application before the superior court was made under Order XLI rule 4. In sub-rule (1) the order provides that the court appealed from may for suficient cause (emphasis is ours) order stay of execution of a decree or order made or passed by it. Before the superior court can exercise its discretion in favour of an applicant for a stay of execution, the applicant must first establish a suficient cause…..Thus, the Superior Court’s discretion is fettered by three conditions. Firstly, the applicant must establish a suficient cause; secondly the court must be satisfied that substantial loss would ensue from a refusal to grant a stay; and thirdly the applicant must furnish security. The application must, of course, be made without unreasonable delay.” 15. Similarly, the Court of Appeal in Butt v Rent Restriction Tribunal [1979] KECA 22 (KLR), made the following pronouncement on exercise of judicial discretion while granting stay of execution “ It is in the discretion of the court to grant or refuse a stay but what has to be judged in every case is whether there are or not particular circumstances in the case to make an order staying https://new.kenyalaw.org/akn/ke/judgment/keelc/2025/5749/eng@2025-07-31 4

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execution. It has been said that the court as a general rule ought to exercise its best discretion in a way so as not to prevent the appeal, if successful from being nugatory.” 16. The defendant claims that it has met the conditions for the grant of the orders sought because it lodged its Application without inordinate delay and that the Plaintifi might not refund the decretal sum if the Appeal succeeds. Further, the Plaintifis have not demonstrated that they generate income suficient to refund the Defendant the said monies in case its appeal succeeds. 17. The Defendant/Applicant assertions have been refuted by the Plaintifis who claims that the Appeal is unlikely to succeed because the restoration orders adopted by the Court were assessed by an independent umpire. Further, given that the Defendant is a foreign company, it might leave the County and the court’s jurisdiction as it escapes from paying the decretal sum. 18. The Plaintifis have additionally in support of their response filed before this court a judgment delivered by the Tax Tribunal on 9th August, 2024 in China Communications Construction Company Limited v Commissioner of Intelligence Strategic Operations, Investigations and Enforcement (Appeal E267 of 2023) [2024] KETAT 1202 (KLR) (9 August 2024) (Judgment) where the Defendant was directed to pay VAT and Income Tax amounting to Ksh.1,168,119,341/=. 19. A successful litigant in a law suit is entitled to enjoy the fruits of their judgment. Similarly, a party disgruntled by a decision of a court or tribunal has the right to institute Appeal proceedings. These annotations were made by Kuloba J when the learned Judged held as follows in Machira t/a Machira & Co Advocates v East African Standard [2002] KEHC 1167 (KLR); “ To be obsessed with the protection of an appellant or intending appellant in total disregard or fiitting mention of the so far successful opposite party is to fiirt with one party as crocodile tears are shed for the other, contrary to sound principle for the exercise of a judicial discretion. The ordinary principle is that a successful party is entitled to the fruits of his judgment or of any decision of the court giving him success at any stage. That is trite knowledge. This is one of the fundamental procedural values which is acknowledged and normally must be put in efiect by the way we handle applications for stay of further proceedings or execution, pending appeal. Of course, in the application of that ordinary principle, the court must have its sight firmly fixed on upholding the overriding objective of the rules of procedure for handling civil cases in the courts, which is to do justice in accordance with the law and to prevent abuse of the process of the court.” 20. On the issue of security for due performance of the decree, the Plaintifis and the Defendant have both adopted difierent positions and conditions which they urge the court to consider should it allow the Application. The court take notes that the application was filed without undue delay. 21. Having considered the arguments from both sides, and the principles applicable as discussed above, the court finds the application for stay of execution pending appeal merited. The court however has the responsibility to balance the interest of both sides. With that in mind the court will grant a conditional stay of execution pending appeal; the condition being that the Defendant deposits 50% of the decretal amount in an interest earning account jointly held by the Plaintifis’ and the Defendant’s Counsel in the next 45 days failing which the stay orders will automatically lapse and the Plaintifis will be at liberty to execute the decree of the court in their favour. https://new.kenyalaw.org/akn/ke/judgment/keelc/2025/5749/eng@2025-07-31 5

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B. Whether an order for stay should be issued in respect of the Taxation proceedings 22. Taking into considering that a decision has already been rendered in respect of the Party and Party Bill of Costs, I find that the Defendant/Applicant prayer seeking stay of taxation proceedings has already been overtaken by events. 23. On the issue of costs, the court directs that each party shall bear its own costs of this Application. 24. It is so ordered. DATED SIGNED AND DELIVERED AT KAJIADO VIRTUALLY THIS 31ST DAY OF JULY 2025. M.D. MWANGI JUDGE In the virtual presence of: Ms. Maruti h/b for Mr. Chenge for the Plaintifis Mr. Ondengu for the Defendant Court Assistant: Edwin https://new.kenyalaw.org/akn/ke/judgment/keelc/2025/5749/eng@2025-07-31 6

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