Limited & 3 others v Kiraka & 2 others

2. This matter was placed before me earlier today. Upon considering the nature of the application, I urged the parties to engage each other with a view to exploring the possibility of an amicable resolution. 3. I am gratified to note that the parties subsequently reported that they had reached a consensus on the grant of an order for stay of execution pending appeal. I thank Mr. Nzuli and Mr. Okumu, learned counsel for the Appellant and the Respondent respectively, for their industry and cooperation in narrowing the issues for determination, thereby facilitating the expeditious disposal of the application. 4. The only issue upon which they were unable to agree relates to the nature and quantum of the security to be furnished by the Appellant as a condition for the grant of the stay. In the circumstances, I directed the parties to address the court by way of brief submissions on the sole outstanding issue concerning the nature and quantum of the security to be furnished. 5. On the issue, Mr. Nzuli submitted that the Appellant is a company with businesses across the country and is financially capable of satisfying the decree should the appeal ultimately fail. 2|Page

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6. Counsel contended that, on the other hand, there was no evidence that the Respondent would be in a position to refund the decretal sum if the appeal were to succeed after payment. 7. Counsel urged the court to accept a bank guarantee from a Tier One bank as security, arguing that such a guarantee is as good as cash and readily enforceable. He further submitted that the court has a wide discretion in determining the nature of security and is not obliged to direct the deposit of the entire decretal sum, a bank guarantee being a sufficient alternative. 8. On his part, Mr Okumu submitted that the appropriate security in the circumstances is the deposit of the entire decretal sum of Kshs. 293,060/- within 30 days. He argued that the purpose of security under the law is to guarantee satisfaction of the decree should the appeal fail and that only a deposit of the full decretal amount would adequately achieve that objective. 9. In support of his submissions, counsel relied on the decision in Charles Karuga Mwangi v Charles Watuthu Nyaga [2021] eKLR, where the court, when face with a similar challenge, directed that the decretal sum be deposited in an interest-earning account in the joint names of the parties’ advocates. 3|Page

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10. Counsel maintained that such an arrangement would adequately safeguard the interests of both parties pending the determination of the appeal. 11. He opposed the proposal to furnish a bank guarantee, contending that the identity of the proposed bank had not been disclosed and that practical challenges are sometimes encountered in the realization of bank guarantees. 12. I have carefully considered the rival submissions by learned counsel. As stated above, the only issue falling for determination is the nature and quantum of the security to be furnished by the Appellant as a condition for the grant of stay pending appeal. 13. The applicable legal framework is found in Order 42 Rule 6(2) of the Civil Procedure Rules, which provides that no order for stay of execution shall be made unless the court is satisfied, inter alia, that the Applicant has furnished such security as the court may order for the due performance of the decree or order as may ultimately be binding upon him. 14. The requirement for security is therefore mandatory, although the nature and quantum thereof lies within the discretion of the court. 15. The purpose of security is neither to punish the judgement debtor nor to unjustly enrich the decree-holder. Rather, it is to 4|Page

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guarantee the due performance of the decree should the appeal ultimately fail while balancing the competing interests of both parties. 16. As the Court of Appeal observed in Focin Motorcycle Co. Limited v Ann Wambui Wangui & Another [2018] eKLR, the object of security is to ensure that the decree-holder is not prejudiced by being kept out of the fruits of a lawful judgement pending appeal. 17. Likewise, in Arun C. Sharma v Ashana Raikundalia t/a Raikundalia & Co. Advocates & 2 Others [2014] eKLR, the High Court emphasized that the court enjoys an unfettered discretion to determine the nature and quantum of security that will adequately secure the due performance of the decree. 18. In the present case, the decree sought to be stayed is purely a money decree. While the Appellant has proposed to furnish a bank guarantee from a Tier One bank, the particular bank has not been identified. 19. More fundamentally, the purpose of security is to ensure that, should the appeal fail, the decretal sum is readily available in satisfaction of the decree. In the circumstances of this case, I am persuaded that the deposit of the entire decretal sum best serves that objective. Such a deposit affords complete 5|Page protection to both parties. It secures the

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Respondent’s decree while preserving the substratum of the appeal and ensuring that, should the appeal succeed, the funds remain intact and available to the Appellant. 20. I respectfully agree with the approach adopted by the High Court in Charles Karuga Mwangi v Charles Watuthu Nyaga [2021] eKLR, where, in comparable circumstances, the court directed the deposit of the entire decretal sum in an interest-earning account in the joint names of the advocates for the parties. 21. Accordingly, there being no opposition to the grant of stay save for the issue of security, I am satisfied that the interests of justice will be adequately served by granting the application upon appropriate terms. 22. In the result, the notice of motion dated 11th June, 2026 is allowed on the following terms: a. There shall be a stay of execution of the decree and all consequential orders in Kisumu Small Claims Court Civil Case No. E4993 of 2025 pending the hearing and determination of the appeal. b. The Appellant shall, within thirty (30) days from the date hereof, deposit the entire decretal sum in an interestearning account with a reputable bank to be agreed upon in the joint names of the advocates on record for the parties. 6|Page

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c. In default of compliance with order (b) above within the stipulated period, the order of stay shall automatically lapse without the necessity of any further order of the court. d. The costs of the application shall abide the outcome of the appeal. DELIVERED (virtually), DATED & SIGNED this 9th July, 2026. JOE M. OMIDO JUDGE FOR APPELLANT: Mr. Nzuli. FOR RESPONDENT: Mr. Okumu. COURT ASSISTANTS: Mr. Ngoge & Mr. Juma. Court: Mention on 8th October, 2026 for directions on the appeal. The Appellant to file and serve the Record of Appeal before then. JOE M. OMIDO JUDGE 7|Page

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