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Court of AppealDismissedCivil Application No. Nai. 284 of 1998 (108/98)· [1998] KECA 159 (KLR)

Kenya Shell Limited v Charles Migui Maranga & 1 other

Court of Appeal
13 November 1998
658 words in judgment
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·~3 min to read original · ~4 min brief

The bottom line

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Winning the 'arguable appeal' test is not enough in Kenya — you must also prove your appeal becomes worthless without a stay, or the court will refuse one.

What this practically means

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Executive summary

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This is a ruling of the Court of Appeal at Nairobi (Gicheru, Omolo and Pall, JJ.A.) on a notice of motion under Rule 5(2)(b) of the Court of Appeal Rules in which Kenya Shell Limited sought a stay or injunction pending an intended appeal against an order of Mbogholi Msagha, J. dated 28th October 1998 in H.C.C.C. No. 643 of 1998, by which the High Court had granted the respondents a mandatory injunction concerning the operation of Shell's petrol station at Kenyatta Market. The court restated the established twin test: an applicant must show that the intended appeal is arguable and that, unless the relief sought is granted, the appeal if successful will be rendered nugatory. On arguability, the court was satisfied: the dispute over whether the 1988 or the 1995 agreement governed the dealership, and the judge's apparent view that the 1995 agreement was imposed on the respondents, raised debatable points, as did the submission that whichever agreement applied contained termination clauses that had been validly invoked. On the nugatory test, however, the applicant failed. The lease obliging Shell to hand over the dealership to the landlord's nominee took effect only on 1st May 1999, and the court declined to presume the appeal would not be heard by then. Nor had Shell demonstrated that its profit margin was so low that it would suffer irreparable loss. The application was accordingly dismissed with costs to the respondents. The ruling binds subordinate courts on the Rule 5(2)(b) twin-test formulation.

Key legal issues

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01

Arguability of the intended appeal

Holding

The intended appeal was arguable, as the question whether the 1995 agreement was imposed on the respondents and the validity of termination under either the 1988 or 1995 agreement were debatable points

Reasoning

The court found the dispute over which agreement (1988 or 1995) governed the petrol station operation raised debatable points. Counsel's submission that both agreements contained termination clauses and that termination was validly effected furnished a further arguable point. Arguability was therefore satisfied, but this alone was insufficient.

p. 1
02

Nugatory value of the intended appeal

Holding

The applicant failed to establish that the appeal would be rendered nugatory absent a stay; the lease obligations took effect only from 1st May 1999 and no irreparable loss on profit margins was demonstrated

Reasoning

The court noted the lease terms did not take effect until 1st May 1999 and declined to presume the appeal would not be heard by then. The applicant also failed to show, even before the trial judge, that its profit margin was so low that it would suffer irreparable loss if the injunction stood. The nugatory test thus failed and the application was dismissed.

p. 2

Legal principles established

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  • An applicant under Rule 5(2)(b) must satisfy the twin tests of an arguable appeal and that the appeal will be rendered nugatory if the stay or injunction sought is not granted

Court orders

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  1. 1.The application under Rule 5(2)(b) is dismissed with costs to the respondents
On appeal from
High Court of Kenya at Nairobi
H.C.C.C. No. 643 of 1998
Jurisdiction invoked
Rule 5(2)(b) of the Court of Appeal Rules

Key timeline

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Practical implications

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Frequently asked questions

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Cite this brief

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Cite this brief

Caselaw, "Kenya Shell Limited v Charles Migui Maranga & 1 other", Case Analysis (1998). Civil Application No. Nai. 284 of 1998 (108/98). Source: https://new.kenyalaw.org/akn/ke/judgment/keca/1998/159/eng@1998-11-13

Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.