Maiyek Wines and Spirits Limited v Commissioner of Domestic Taxes

1. Nairobi Court of Appeal Civil Application No. Nai. 91 of 2008 (UR 53/2008) Coastal Bottlers Limited v Commissioner Domestic Taxes 2. Century Oil Trading Company Ltd v Kenya Shell Limited Nairobi (Milimani) HCMCA No. 1561 of 2007 3. Gianfranco Manenthi & Another v Africa Merchant Assurance Co. Ltd [2019] eKLR 8. The appellant submitted that it is a going concern with substantial assets and the risk of it dissipating assets or becoming judgment proof is minimal. It also submitted that requiring 50% threshold is not a legal requirement but merely a discretionary consideration that should be exercised based on specific facts of each case. 9. The applicant urged the court to grant stay without imposing conditions of security as its position is that it has already paid all owing taxes and the amount demanded is erroneous. It contended that ordering it to pay Kshs. 6,000,000/- when it has already satisfied its tax obligations is unfair and unjust. Analysis and Determination 10. I have considered the submissions. The only issue before the court is the security for costs pending the hearing and determination of the appeal. 11. The court has the discretion to determine suitable security depending on the circumstances of the case. Arun C. Sharma v Ashana Raikundalia t/a Raikundalia & Co. Advocates & 2 Others [2014] eKLR 12. In determining the amount of security, the court should also consider that; “…insistence on a policy or practice that mandates security, for the entire decretal amount is likely to stifle possible appeals – especially in a Commercial Court, such as ours, where the underlying transactions typically tend to lead to colossal decretal amounts”. Sewankambo Dickson v Ziwa Abby HCT-00-CC MA 0178 of 2005, the High Court of Uganda at Kampala. 13. This matter emanated from a tax dispute which was determined by the Tax Appeals Tribunal. The respondent has sought 50% of the Kshs. 12,980,640/-. 14. The appellant asserted that ordering it to pay Kshs. 6,000,000/- when it has already satisfied its tax obligations is unfair and unjust. It was firm that it has already paid all owing taxes and the amount demanded is erroneous. For this reason, it urged the court grant stay without imposing conditions of security. 15. However, the court ought to balance the right of the applicant to appeal vis a vis the respondent’s right to enjoy the fruits of its judgment. Machira T/A Machira & Co Advocates vs. East African Standard (No 2) [2002] KLR 6 16. Security could be a condition for the grant of stay pending appeal. Order 42 Rule 6 of the Civil Procedure Rules Gianfranco Manenthi & Another v Africa Merchant Assurance Co. Ltd [supra] 17. Nonetheless, each case is determined on its own facts and circumstances. Parties intimated to the court that they are amenable to pursuing ADR on this appeal. The duty of the court under article 159(2)(c) of the Constitution is to promote alternative justice systems and expanding party autonomy to resolve their own disputes. Therefore, the court refers the parties to ADR and seek settlement of the issues herein. In light thereof, a stay of execution is hereby issued for 60 days pending a report from the ADR engagement within 60 days of today. Accordingly, the issue of security is deferred to await the outcome of the ADR. https://new.kenyalaw.org/akn/ke/judgment/kehc/2025/19246/eng@2025-12-17 2

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Disposal 18. In conclusion, the court makes the following orders: 1. A stay of execution and/ or any other enforcement action is issued FOR 60 DAYS to await the outcome of ADR engagement within 60 days from the date of this ruling. 2. In light thereof, the determination on provision of security is deferred pending the outcome of the ADR herein ordered. 3. Costs to be in the cause. DATED, SIGNED AND DELIVERED AT NAIROBI THIS 17TH DAY OF DECEMBER, 2025 THROUGH MICROSOFT TEAMS ONLINE APPLICATION F. GIKONYO M JUDGE In the presence of: Ms. Thatia for Kativa for Applicant Isuza for Ms. Nyakio for KRA CA Kinyua https://new.kenyalaw.org/akn/ke/judgment/kehc/2025/19246/eng@2025-12-17 3

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