REPUBLIC OF KENYA IN THE HIGH COURT OF KENYA AT KAKAMEGA CIVIL APPEAL NO. E145 OF 2025 SBM BANK KENYA LTD………………………………………APPELLANT/APPLICANT VERSUS RAYMOND OLENDO………………………………………………...1ST RESPONDENT KENYA DEPOSIT INSURANCE CORPORATION (KDIC)……..2 ND RESPONDENT RULING 1. The appeal herein arises from the Judgment delivered on 10 th September 2025 by Hon. P. Mutua (CM) in Kakamega CMCC No. 244 of 2019. 2. The dispute before the subordinate court arose from a bankercustomer relationship between the Plaintiff, Raymond Olendo, and Chase Bank (Kenya) Limited (then under receivership), whose assets and liabilities were subsequently assumed in part by SBM Bank Kenya Limited, the Appellant herein. 3. The Plaintiff had obtained several loan facilities from the bank for the purchase of motor vehicles to support his transport business. The vehicles financed served as securities and the original logbooks were retained by the bank. KK. HCCA E145 OF 2025 -RULING 1
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4. Following the placement of Chase Bank under receivership on 7 th April 2016 by the Central Bank of Kenya and the appointment of Kenya Deposit Insurance Corporation (KDIC) as receiver manager, the Plaintiff alleged that his deposits amounting to over Kshs. 10 million were unlawfully withheld and access thereto restricted under the moratorium regime. 5. The Plaintiff further complained that despite the bank holding substantial deposits belonging to him, the Defendants continued charging interest and penalties on the loan accounts, declined to offset the loans against the deposits, irregularly reversed transactions, failed to release logbooks for fully paid motor vehicles and wrongfully listed him with the Credit Reference Bureau. 6. He contended that the actions of the Defendants occasioned him financial loss, disrupted his business operations and damaged his reputation. 7. The Defendants denied liability and maintained that the Plaintiff had fallen into arrears in repayment of the facilities and that all actions taken were lawful and in accordance with the loan agreements and the statutory receivership framework. 8. Upon hearing the parties, the trial court entered judgment in favour of the Plaintiff and awarded him general and aggravated damages KK. HCCA E145 OF 2025 -RULING 2
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totaling Kshs. 9,500,000/= for breach of contract and related wrongful conduct. 9. Aggrieved by that decision, the Appellant lodged the present appeal together with the Notice of Motion dated 2nd October 2025 seeking stay of execution pending appeal. 10. The application is brought under Sections 1A, 1B and 3A of the Civil Procedure Act and Order 42 Rule 6 of the Civil Procedure Rules. 11. The Applicant seeks principally an order for stay of execution of the Judgment and Decree delivered on 10 th September 2025 pending the hearing and determination of the appeal. 12. The application is supported by the affidavit of KEVIN KIMANI sworn on 2nd October 2025. 13. The Applicant contends that the appeal is arguable and raises substantial issues regarding the treatment of the loan accounts, the legality of the findings of the trial court and the award of damages. 14. It is further deposed that the trial court had granted a temporary stay of execution for thirty (30) days which was due to lapse on 10 th October 2025 and unless stay is granted, execution is likely to proceed thereby rendering the appeal nugatory. KK. HCCA E145 OF 2025 -RULING 3
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15. The Applicant also states that it stands to suffer substantial loss if compelled to satisfy the decree before the appeal is heard and determined and has expressed willingness to furnish security. 16. The application was opposed by the 1 st Respondent who maintained that the Applicant had failed to satisfy the conditions for grant of stay pending appeal. Issue for Determination 17. The issue falling for determination is whether the Applicant has satisfied the conditions for grant of stay of execution pending appeal under Order 42 Rule 6 of the Civil Procedure Rules. Analysis and Determination 18. I have considered the application, the affidavit in support, the record and the applicable law. 19. The principles governing stay of execution pending appeal are provided under Order 42 Rule 6(2) of the Civil Procedure Rules which requires an applicant to demonstrate: a. Substantial loss may result unless stay is granted; b. The application has been made without unreasonable delay; and c. Such security as the court may order for due performance of the decree has been furnished. KK. HCCA E145 OF 2025 -RULING 4
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20. In Butt v Rent Restriction Tribunal {1982}klr 417, the Court held that the power to grant stay is discretionary and should be exercised in a manner that does not render an appeal nugatory. 21. Similarly, in Kenya Shell Ltd v Benjamin Karuga Kibiru& Another{1986} KLR 410 the Court of Appeal emphasized that substantial loss is the cornerstone of an application for stay. a. Whether the application was filed without delay 22. The impugned judgment was delivered on 10th September 2025 while the present application was filed on 2ndOctober 2025. 23. In the circumstances, I find that the application was filed timeously and without unreasonable delay. b. Whether substantial loss has been demonstrated 24. The decretal amount herein is Kshs. 9,500,000/=, a substantial sum. 25. The Applicant has expressed apprehension that once paid out, recovery may prove difficult if the appeal ultimately succeeds. 26. In National Industrial Credit Bank Ltd v Aquinas Francis Wasike & Another {2006}eKLR the Court of Appeal held that once an applicant raises reasonable apprehension regarding the respondent’s ability to refund the decretal sum, the evidential burden shifts to the respondent to demonstrate financial capability. KK. HCCA E145 OF 2025 -RULING 5
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27. No material was placed before this Court by the 1st Respondent demonstrating his ability to refund the decretal amount in the event the appeal succeeds. 28. Further, without delving into the merits of the appeal, I am satisfied that the memorandum of appeal raises arguable points touching on the management of the Plaintiff’s loan accounts during receivership, the application of the in duplum rule and the propriety of the award of damages. 29. Consequently, I am persuaded that the Applicant has demonstrated substantial loss. c. Whether security should be furnished 30. The Applicant has indicated willingness to furnish reasonable security pending the appeal. 31. In Focin Motorcycle Co. Limited v Ann Wambui Wangui & Another {2018} eKLR the Court observed that security is intended to guarantee due performance of the decree should the appeal fail. 32. Balancing the competing rights of the parties, I find it appropriate to grant conditional stay. Conclusion KK. HCCA E145 OF 2025 -RULING 6
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33. Consequently, the Notice of Motion dated 2nd October 2025 is allowed on the following terms: i. There shall be a stay of execution of the Judgment and Decree delivered on 10th September 2025 in Kakamega CMCC No. 244 of 2019 pending the hearing and determination of the appeal. ii. The Applicant shall deposit half of the decretal sum in an interest earning joint account in the names of counsel for the parties within forty-five (45) days from the date hereof. iii. In default of compliance with order (b) above, the stay granted herein shall automatically lapse. iv. Costs of the application shall abide the outcome of the appeal. v. Right of Appeal 30 days. vi. Mention 5.11.2026 for directions on main appeal. DATED, SIGNED AND DELIVERED IN OPEN COURT AT KAKAMEGA THIS 20TH DAY OF MAY, 2026. S.N MBUNGI JUDGE In the presence of:CA: Zilda/Velma Ms. Adhiambo, for the Applicant present online. Respondent absent. KK. HCCA E145 OF 2025 -RULING 7
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