Medina Corporation Company Limited v Meridian Properties Limited & 1 other

also supplemented their arguments by filing written submissions which I have considered together with the pleadings and I will make relevant references to them in my analysis and determination below. Analysis and Determination 3. The court is being urged to determine whether it should stay the execution of the judgment pending hearing and determination of the appeal. As submitted by the Defendants, the principles that guide the court in an application for stay of execution and proceedings pending an appeal are grounded in Order 42 Rule 6 (2) of the Civil Procedure Rules. In order to succeed, the applicant must demonstrate substantial loss may result unless the order of stay is made. It must also demonstrate that the application has been brought without undue delay and lastly, the applicant must give such security as the court may order for the due performance of the decree or order as the case may be. These principles have been buttressed by decisions of superior courts where it was added that the power to order stay of execution is discretionary and must be exercised in such a way that the appeal is not rendered nugatory and that this discretion is based on the facts and circumstances of each case (see Halai & Another v. Thornton & Turpin [1990] KECA 65 (KLR) and Butt v Rent Restriction Tribunal [1979] KECA 22 (KLR)] 4. The Plaintiff deponed that the transfer of the 20,000 shares would cause substantial and irreparable loss to it because the shares represent the company's entire issued share capital, the transfer would result in the Plaintiff losing ownership of its entire company, assets, goodwill, and business operations and it would permanently alter its shareholding structure, leading to a loss of corporate control and divesting it of all financial benefits. That if the execution proceeds before the appeal is heard, the appeal would become meaningless and an academic exercise and that the Defendants will suffer no prejudice that cannot be compensated by costs if the stay is granted. 5. The Plaintiff avers that the application has been filed promptly and without undue delay and that it is ready and willing to provide security for the due performance of the decree, as the court may deem fit. In response, the Defendants depone that the application is frivolous, bad in law and without merit and that the Plaintiff's deponent has a documented history of reneging on agreements regarding the shares. That the Plaintiff's intended appeal does not have good chances of success because the Court made clear findings of fact against the Plaintiff after a full hearing. 6. The Defendants contend that this dispute has dragged on since 1995 and the Defendants, one of whose directors has since passed away, are elderly and wish to see the matter concluded. They state that litigation must come to an end and a successful party is entitled to enjoy the fruits of its judgment and that the Plaintiff is attempting to delay the matter by filing this application and it is the Defendants who will be prejudiced if the stay is granted. They accuse the Plaintiff of not coming to court with clean hands and is undeserving of the equitable relief it seeks and that since the Court has declared that the Plaintiff holds the shares in trust for the Defendants, the Plaintiff does not stand to suffer any loss if the transfer is executed. Further, that the beneficial ownership has already been determined by the court and the Defendants thus pray that the application be dismissed with costs. 7. I do not think it is in dispute that the application has been timely filed considering it was done a few days after judgment was delivered. Much of the contention appears to be whether the Plaintiff will suffer substantial loss if the stay is not granted and whether it is willing to offer security. In my view, the loss of an entire company is the definition of substantial loss that would render the appeal nugatory. The trust declaration is a legal conclusion that is itself being appealed and if the appeal succeeds, the share transfer would be incredibly difficult to reverse as the shares are unique and not a simple debt that can be compensated by money. Further, the Plaintiff has demonstrated a clear willingness to provide security and it is the court which determines the security upon ordering stay to ensure the due performance of https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/11933/eng@2026-07-17 2

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the obligations by the applicant as to costs and to satisfy the decree (see Focin Motorcycle Co. Limited v Ann Wambui Wangui & Stephen Kinyua Mugo [2018] KEHC 8358 (KLR)]. 8. Since the decree is not monetary in nature and noting that the original share price as agreed by the parties in 1993 was Kshs.3,100,000.00/-, I will allow the stay application on condition that the Plaintiff deposits the sum of Kshs.5,000,000.00/- in an interest earning account in joint names of the advocates on record. 9. I therefore find that the Plaintiff has met the conjunctive conditions of Order 42 Rule 6(2) of the Rules. The application was filed without delay, the Plaintiff has offered security, and the loss of an entire company constitutes substantial loss that would render the appeal nugatory. The Defendants' main argument is that the appeal lacks merit, but that is not the relevant test at this stage as the court's discretion is circumscribed and exercised to preserve the subject matter of the appeal. A stay, coupled with conditions such as security and an expedited hearing, will allow the Defendants to enjoy the fruits of their judgment if the appeal fails while protecting the Plaintiff from irreversible harm if its appeal succeeds. Conclusion and Disposition 10. For the reasons stated above, I allow the Plaintiff’s application dated 21st July 2025 and stay the execution of this court’s judgment dated 13th June 2025 on condition that the Plaintiff deposits the sum of Kshs.5,000,000.00/- in an interest earning account in joint names of the advocates on record within 60 days of this ruling. In default, the stay orders will automatically lapse and the Defendants will be at liberty to execute. It is so ordered. DATED SIGNED AND DELIVERED VIRTUALLY AT NAIROBI THIS 17TH DAY OF JULY 2026 ............................................................................ J.W.W. MONGARE JUDGE IN THE PRESENCE OF Mr. Hezbon Ooko holding brief for Mr. Kanjama SC for the Plaintiff. Ms. Dave for the Defendant. Amos - Court Assistant https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/11933/eng@2026-07-17 3

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