SHELL & BP (MALINDI) KENYA LIMITED (FORMERLY AGIP KENYA LIMITED) vs JULIUS GIKONYO KIANO)JOHN KARABA NGUYO [2001] KECA 264 (KLR)
The bottom line
#Kenya's Court of Appeal protected a petrol station company from eviction while its lease dispute is on appeal, because losing the land would wipe out its investment.
What this practically means
#Executive summary
#Questions the Court framed
#The issues the Court set itself to decide, in its own words.
- 1.Whether the intended appeal is arguable.
- 2.Whether the applicant is the successor to Agip Limited (arguable point discerned by the Court).
- 3.Whether the exercise of the option contained in clause 3(iii) of the original lease entitled the applicant to a 10-year extension of the lease (arguable point discerned by the Court).
- 4.Whether the agreement of 23rd June 1999 creates new enforceable rights (arguable point discerned by the Court).
- 5.Whether the success of the intended appeal will be rendered nugatory if the injunction is not granted.
Key legal issues
#Whether the intended appeal is arguable.
Yes. The court discerned three arguable points: whether the applicant is the successor to Agip Limited; whether exercise of the option in clause 3(iii) of the original lease entitled the applicant to a 10-year extension; and whether the agreement of 23rd June 1999 creates new enforceable rights.
The court stressed that on an application for an injunction pending appeal it is not called upon to determine the appeal itself, only to decide whether it is arguable. It identified three contested questions arising on the pleadings: the applicant's succession to Agip Limited, the effect of the option in clause 3(iii) of the original lease, and whether the agreement of 23rd June 1999 created new enforceable rights. It held these points sufficient to establish arguability without expressing any view on their ultimate merits, treating arguability as a threshold satisfied by the identification of bona fide contested issues.
Whether the success of the intended appeal would be rendered nugatory if the injunction is not granted.
Yes. The applicant's predecessor built the petrol station on the suit property and there is substantial investment thereon; if the property goes out of the applicant's reach it would lose all it has put in, probably including over one million shillings paid to the first respondent, who is not the registered proprietor and says the money was a loan but was not offered to refund it.
Weighing the consequences of refusing the injunction, the court noted that the applicant's predecessor had built the petrol station on the suit property and that there was substantial investment thereon. If the property went out of the applicant's reach, it would lose all it had put in, probably including the sum of over one million shillings paid towards the proposed renewal, a payment the first respondent characterised as a loan but for which he had not been offered a refund. Loss of the property would therefore render a successful appeal nugatory.
Whether to grant the injunction sought pending the hearing and determination of the intended appeal.
Granted. Taking everything into account, the court granted the orders prayed in the notice of motion dated 13th September 2001, restraining the respondents from evicting the applicant or interfering with its quiet possession of the suit property pending the intended appeal, with the costs of the application to be costs in the intended appeal.
Both limbs of the test for an injunction pending appeal were satisfied: the intended appeal was arguable on at least three discerned points, and refusal of the injunction would have rendered any success nugatory because the applicant's petrol station and capital investment stood on land that could pass out of its reach. The court accordingly exercised its discretion to preserve the status quo, granting the orders prayed in the notice of motion dated 13th September 2001 and making the costs of the application costs in the intended appeal.
Legal principles established
#- On an application for an injunction pending the hearing and determination of an intended appeal, the court's first task is to decide whether the intended appeal is arguable; it is not called upon to determine the appeal itself.
- Having found the intended appeal arguable, the court must then consider whether the success of the appeal would be rendered nugatory if the injunction is not granted.
- Where the applicant has made substantial investment on the suit property and paid sums that may be irrecoverable, refusal of the injunction is capable of rendering a successful appeal nugatory.
Court orders
#- 1.The orders prayed in the notice of motion dated 13th September 2001 and lodged in Court on 14th September 2001 granted, namely an injunction restraining the respondents from evicting the applicant or taking or attempting to take possession of or interfering with the applicant's quiet possession of the premises known as Title Number KARATINA/BLOCK 1/284 Nyeri (formerly L.R. No. 7235/424) pending the hearing and determination of the intended appeal.
- 2.The costs of the application to be costs in the intended appeal.
The bench
#One judgment of the whole court — no separate or dissenting opinions.
- On appeal from
- High Court of Kenya at Nairobi
- H.C.C.C.C No. 986 of (year not stated in the ruling)
- Jurisdiction invoked
- Not expressly cited in the ruling; the application was a notice of motion to the Court of Appeal for an injunction pending the hearing and determination of an intended appeal (the underlying High Court chamber summons had been brought under Order XXXXIX rules 2, 3 and 9 of the Civil Procedure Rules and the inherent jurisdiction of the court).
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.
The upshot of all this is that we grant the orders prayed the notice of motion dated 13th September, 2001 and lodged in this Court on 14th September, 2001. The costs of this application shall be costs in the intended appeal.
Of course, at this stage, we are not called upon to determine the intended appeal. We are only called upon to decide if the intended appeal is arguable.
Having come to that conclusion we have to decide if the success of the intended appeal will be rendered nugatory if the injunction is not granted.
These points are sufficient to enable us to determine that the intended appeal is indeed an arguable one.
If the suit property goes out of the reach of the applicant it would lose all it has put in probably including the sum of over one million shillings it has paid to the first respondent who is as yet not the registered proprietor of the suit property.
Issues in the judgment
#The source text contains garbled/corrupted passages (apparent OCR artefacts) that obscure part of the narration of the lease terms.
The High Court case number is incomplete in the ruling - the year following the number is missing.
The coram heading places the court at Nyeri ('IN THE COURT OF APPEAL AT NYERI') but the ruling is stated to be dated and delivered at Nairobi.
The ruling is internally inconsistent on registered ownership: it opens by stating the first respondent 'was and still is the registered proprietor of the said property', yet the nugatory-analysis passage describes him as not yet registered proprietor.
The ruling is internally inconsistent as to who received the Shs.1,002,680: it is earlier stated as common ground that the second respondent received that sum, while the nugatory-analysis passage states the applicant paid it to the first respondent.
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "SHELL & BP (MALINDI) KENYA LIMITED (FORMERLY AGIP KENYA LIMITED) vs JULIUS GIKONYO KIANO)JOHN KARABA NGUYO [2001] KECA 264 (KLR)", Case Analysis (2001). Civil Application No. NAI. 317 of 2001 (UR.168/2001). Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2001/264/eng@2001-11-16
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.