Dari Limited & 5 others v East African Development Bank
The bottom line
#Supreme Court refuses to halt foreign judgment enforcement; bank can compensate if appeal succeeds.
What this practically means
#The Supreme Court struck out new evidence because the applicants did not follow the proper procedure for introducing it. The court also refused to stop enforcement of a foreign judgment against Dari Limited, ruling that the East African Development Bank is a reputable institution capable of repaying the money if the appeal succeeds. Additionally, the court said related High Court cases should continue in lower courts, not be halted by the Supreme Court.
Executive summary
#Questions the Court framed
#The issues the Court set itself to decide, in its own words.
- 1.Whether the applicants' supplementary affidavits sworn on June 12, 2023 should be struck out.
- 2.Whether the applicants have met the threshold for issuance of conservatory orders staying execution of the Court of Appeal judgment and staying proceedings before the High Court.
Key legal issues
#Whether the applicants' supplementary affidavits introducing new documents not part of the record in the superior courts below should be struck out.
The supplementary affidavits are struck out because the applicants failed to follow the formal procedure under rule 26 of the Supreme Court Rules for adducing additional evidence.
The court noted that the annexures in the supplementary affidavits were not produced in the superior courts below. While the affidavits sought to rebut the respondent's averments, this does not allow the applicants to introduce additional evidence through the backdoor. Proper procedures under section 20 of the Supreme Court Act and rule 26 of the Supreme Court Rules must be followed, and the applicants failed to do so.
Whether the applicants have met the threshold for issuance of conservatory orders staying execution of the Court of Appeal judgment.
The applicants failed to meet the threshold, particularly on the nugatory aspect and public interest.
The court applied the three-part test from Gatirau Peter Munya: arguable appeal, nugatory aspect, and public interest. While the appeal was arguable, the court found that the balance of probability favoured the respondent on the nugatory aspect because the respondent is a reputable international bank capable of compensating the applicants, and the applicants did not demonstrate the applicability of diplomatic immunity. On public interest, the dispute was essentially a private commercial matter, and enforcement of a foreign judgment is not per se a matter of public interest.
Whether the Supreme Court can grant stay of proceedings pending before the High Court that are not directly the subject of the appeal before it.
The Supreme Court cannot grant stay of proceedings that are not within its purview on appeal; the trial court should be allowed to proceed.
The court found that the proceedings the applicants sought to stay (High Court Commercial Cause and Insolvency Causes) do not directly arise from the appeal before the Supreme Court. The impugned Court of Appeal judgment makes no reference to these proceedings. Following its precedent in Kenya Plantation & Agricultural Workers' Union, the court held that the trial court should be afforded the first opportunity to express an opinion, and the dissatisfied party should follow the appellate hierarchy.
Legal principles established
#- To introduce new evidence in the Supreme Court, you must file a formal application under rule 26 of the Supreme Court Rules, not just a supplementary affidavit.
- The Supreme Court will not stay proceedings that are not directly part of the appeal before it; lower courts should handle them first.
- For conservatory orders, the applicant must show the appeal is arguable, would be rendered nugatory without a stay, and that public interest favors the stay.
- A private commercial dispute does not automatically raise public interest for granting a stay of execution.
- A reputable financial institution's ability to compensate the other party weighs against finding the appeal nugatory.
Court orders
#- 1.The notice of motion application dated April 25, 2023 and filed on April 26, 2023 be and is hereby dismissed.
- 2.The notice of motion application (Petition (Application) No E012 of 2023) dated June 23, 2023 and filed on June 27, 2023 be and is hereby allowed.
- 3.The notice of motion application (Application No E017 of 2023) dated June 23, 2023 is hereby allowed.
- 4.Costs of the application shall abide the outcome of the appeal.
The bench
#One judgment of the whole court — no separate or dissenting opinions.
- On appeal from
- Court of Appeal of Kenya
- Civil Appeal No 70 of 2020
- Jurisdiction invoked
- Article 163(4)(a) of the Constitution of Kenya, 2010
- Consolidated with
- Application No E017 of 2023
Relief refused
#Conservatory orders staying execution of the judgment dated April 20, 2023 in Civil Appeal No 70 of 2020
The applicants failed to demonstrate the public interest criterion and the nugatory aspect favoured the respondent.
Stay of proceedings before the High Court in Milimani High Court Commercial Cause No E469 of 2019 and related insolvency causes
These proceedings are not within the purview of this court and the trial court should be afforded the first opportunity to render its decisions.
Costs
Costs of the application shall abide the outcome of the appeal.
Quotable passages
#Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.
Under rule 26 of the Supreme Court Rules, a party seeking to adduce additional evidence should make a formal application to the court.
To consider whether to entertain the interlocutory relief sought, an applicant must demonstrate that the appeal is arguable and not frivolous; that if stay is not granted the appeal will be rendered nugatory; and that it is in the public interest that the order of stay is granted.
It is our inescapable conclusion that the applicants have not demonstrated to our satisfaction that they can surmount the public interest criteria for exercise of our discretion in their favour.
The notice of motion application dated April 25, 2023 and filed on April 26, 2023 be and is hereby dismissed.
The notice of motion application (Petition (Application) No E012 of 2023) dated June 23, 2023 and filed on June 27, 2023 be and is hereby allowed.
Costs of the application shall abide the outcome of the appeal.
Key timeline
#Practical implications
#Strict compliance with Rule 26 required
When seeking to adduce additional evidence before the Supreme Court, you must file a formal application under rule 26 of the Supreme Court Rules, 2020. Introducing evidence through supplementary affidavits without following this procedure will result in striking out. Also, note that the Supreme Court will not grant stay of proceedings not directly before it; you must follow the appellate hierarchy.
Foreign judgment enforcement upheld
The court refused to stay execution of a foreign judgment against Dari Limited, emphasizing that the respondent bank is reputable and capable of compensating if the appeal succeeds. Businesses facing enforcement of foreign judgments should be aware that the Supreme Court will consider the financial strength of the judgment creditor when assessing whether the appeal would be rendered nugatory.
Know your appeal rights
If you are a party to a commercial dispute and want to stop enforcement while appealing, you must meet a high threshold: show your appeal is arguable, that without a stay the appeal would be pointless, and that public interest supports the stay. The court will not automatically grant a stay just because you have an appeal.
Frequently asked questions
#What is the Supreme Court's rule for introducing new evidence in Kenya?+
You must make a formal application under rule 26 of the Supreme Court Rules, 2020. Simply filing a supplementary affidavit is not enough and will be struck out, as happened in Dari Limited v East African Development Bank.
Can the Supreme Court stop a High Court case that is related to an appeal in Kenya?+
No, the Supreme Court will not stay proceedings that are not directly part of the appeal before it. The trial court should be allowed to proceed, and you must follow the normal appeal process.
What does it take to get a conservatory order from the Supreme Court in Kenya?+
You must show that your appeal is arguable, that without the order the appeal will be rendered nugatory, and that it is in the public interest to grant the order. The court balances these factors, as seen in Dari Limited v East African Development Bank.
Is a private commercial dispute considered a matter of public interest for a stay in Kenya?+
Generally no. The Supreme Court held that a dispute over enforcement of a foreign judgment is essentially a private commercial matter and does not automatically raise public interest concerns for granting a stay.
Cite this brief
#Cite this brief
Caselaw, "Dari Limited & 5 others v East African Development Bank", Case Analysis (2023). Petition (Application) E012 of 2023 & Application E017 of 2023 (Consolidated). Source: https://new.kenyalaw.orghttps://new.kenyalaw.org/akn/ke/judgment/kesc/2023/90/eng@2023-10-06
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.