Anspar Beverages Limited v Development Bank of Kenya Limited,East African Development Bank, International Finance Corporation,Abn Amro Bank N.V [2003] KECA 117 (KLR)
The bottom line
#Kenya's Court of Appeal stopped a company in receivership's assets from being sold, ruling its appeal over who authorised the lawsuit was arguable.
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 applicant had an arguable intended appeal from the striking out of its suit
- 2.Whether the appeal, if successful, would be rendered nugatory if the injunction sought were not granted
Key legal issues
#Whether the intended appeal challenging the striking out of the suit for want of authority was arguable
The court found arguable points: the defence puts matters in issue without need of a reply, and the applicant's affidavits asserting authorization should have been presumed correct on a preliminary point of law.
The judge had held the suit invalid because no organ of the company authorized it, relying on the absence of traversal in a reply. The Court of Appeal held that Order VI rule 10(1) makes a defence self-proving so no reply is needed, and that on a preliminary point of law the facts asserted by affidavit, including authorization by Mr Tanna, had to be presumed correct per Mukisa Biscuit. This made the appeal arguable.
Whether success in the intended appeal would be rendered nugatory without the injunction
Counsel for the respondents conceded that if the plant, machinery and land were sold to third parties, nothing would remain for the applicant to fight for; the nugatory test was satisfied.
Both counsel for the first and second respondents and for the receivers/managers conceded that a sale of the assets to third parties would leave the applicant with nothing to recover even if the appeal succeeded. The court therefore found the second limb of the Rule 5(2)(b) test met and granted the injunction to preserve the assets.
Whether the injunction could be refused because the plaint had been struck out and no suit existed
The court rejected the submission that no suit existed, since the intended appeal sought to resurrect the plaint, in which event the chamber summons could be argued on its merits.
Counsel for the third respondent argued there was no suit to protect because the plaint was struck out. The court held this misunderstood the position: on a successful appeal the plaint could be reinstated and the pending application argued, so preserving the status quo pending appeal was appropriate.
Legal principles established
#- A company cannot institute a suit in its own name unless the action has been sanctioned by the board of directors or the company in general or special meeting, evidenced by a resolution.
- A company in receivership may sue to challenge the receivership without the permission or consent of the receiver.
- A preliminary objection in law is argued on the assumption that all the facts pleaded by the other side are correct.
- Where there is no reply to a defence, there is joinder of issue on that defence; what is pleaded in defence need not be traversed in a reply.
- For an injunction under Rule 5(2)(b) to issue, the applicant must show an arguable appeal and that the appeal would be rendered nugatory if not granted.
Court orders
#- 1.Injunction granted in terms of the second prayer of the application under Rule 5(2)(b) pending the filing, hearing and determination of the intended appeal, the first prayer having been spent
- 2.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. No. 1155 of 2002
- Jurisdiction invoked
- Rule 5(2)(b) of the Court of Appeal Rules - injunction pending the filing, hearing and determination of an intended appeal
Relief refused
#Evaluation of the merits or demerits of the pending chamber summons application before the superior court
The court held it would be premature to evaluate the merits of the application still pending before the High Court
Costs
The costs of this application will be costs in the intended 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.
We allow the second prayer of the application, the first prayer being spent. The costs of this application will be costs in the intended appeal.
A preliminary objection in law is argued on the assumption that all the facts pleaded by the other side are correct
a company in receivership could sue to challenge the said receivership without the permission or consent of the receiver
10(1) If there is no reply to defence, there is joinder of issue on that defence
As the injunction application is still pending we cannot start our own evaluation of the merits or demerits of the application before the superior court.
Key timeline
#Practical implications
#Frequently asked questions
#Later judgments citing this (4)
#Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.
- Mutegi & another v Republic (Criminal Appeal (Application) 100 of 2023) [2025] KECA 942 (KLR)[2025] KECA 942 (KLR)23 May 2025followed
- Ethics and Anti Corruption Commission v Tioko Logorion & 11 others [2021] KECA 1045 (KLR)[2021] KECA 1045 (KLR)29 Jan 2021
- Abdiwahab Sheikh Osman Hathe v Mohamed Ali Sheikh & 3 others [2017] KEMC 41 (KLR)[2017] KEMC 41 (KLR)14 Dec 2017applied
- Joel Nyabuto Omwenga & 2 others v IEBC & another [2013] KEMC 68 (KLR)[2013] KEMC 68 (KLR)5 Jul 2013followed
Cite this brief
#Cite this brief
Caselaw, "Anspar Beverages Limited v Development Bank of Kenya Limited,East African Development Bank, International Finance Corporation,Abn Amro Bank N.V [2003] KECA 117 (KLR)", Case Analysis (2003). Civil Application No. Nai. 1 of 2003. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2003/117/eng@2003-02-14
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.