MBARAKI BULK TERMINAL LTD v EAST AFRICAN BULKING SERVICES LTD & 2 OTHERS [2007] KECA 120 (KLR)
The bottom line
#Kenya's Court of Appeal confirmed that winning a stay of execution requires proving both an arguable appeal and irreparable harm—money losses don't count.
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 raises arguable points (conceded by the respondents)
- 2.Whether, unless stay of execution is granted, the intended appeal, if successful, will be rendered nugatory
Key legal issues
#The twin test for stay under rule 5(2)(b) of the Court of Appeal Rules
Both limbs must be satisfied; arguability alone is insufficient
The court restated that rule 5(2)(b) jurisdiction is original and discretionary, requiring the applicant to show (i) arguable grounds of appeal and (ii) that without the stay the appeal would be rendered nugatory. The 1st respondent conceded arguability, so only the nugatory limb was contested; failure on that limb alone mandated dismissal.
Whether reversing the transfer, consolidation and discharge of cautions would render the applicant's intended appeal nugatory
No — the loss was quantifiable economic loss and the property would remain recoverable if the appeal succeeded
The court examined the substance of the superior court's orders: they merely restored the cautions and the register to their prior state. The property would revert to the 3rd respondent, which no longer claimed any interest, and the 1st respondent could not deal in it while cautions were in place. Any loss of profits or expenses was quantifiable, and the respondents were not shown incapable of compensating the applicant.
Balancing the applicant's economic claims against the 1st respondent's right to enjoy the fruits of its judgment
There must be just cause for denying a successful litigant the fruits of its decision; the applicant could deal freely with the property if a stay were granted, potentially placing it beyond the reach of the 1st respondent
The court weighed the applicant's alleged economic loss and job losses against the 1st respondent's purchaser's interest under a caution and its judgment in its favour. Granting a stay would let the applicant deal with the property as it wished, possibly defeating the 1st respondent, whereas refusal left the applicant with a compensable, quantifiable claim.
Legal principles established
#- An applicant under rule 5(2)(b) must satisfy two cumulative tests: that the appeal or intended appeal is arguable, and that unless the order sought is granted the appeal, if successful, will be rendered nugatory; satisfying only one limb is fatal
- Economic or financial loss that is quantifiable and compensable by a solvent counterparty does not render the success of an intended appeal nugatory
Court orders
#- 1.Civil Application Nos. 4 and 5 of 2007 (consolidated) dismissed
- 2.Costs of the applications to the respondents (dismissed with costs)
The bench
#One judgment of the whole court — no separate or dissenting opinions.
Wrote the judgment
- On appeal from
- High Court of Kenya at Mombasa
- H.C. Miscellaneous Civil Appl. No. 946 of 2005
- Jurisdiction invoked
- Rule 5(2)(b) of the Court of Appeal Rules (original and discretionary jurisdiction of the Court of Appeal)
- Consolidated with
- Civil Application No. 5 of 2007 (consolidated with Civil Application No. 4 of 2007)
Relief refused
#Stay of execution of the ruling and orders of Sergon J delivered on 15th December 2006
The applicant satisfied only the arguability test and failed to demonstrate that the intended appeals, if successful, would be rendered nugatory; any loss was held to be quantifiable and compensable
Costs
The consolidated applications were dismissed with costs — costs awarded against the applicant in favour of the respondents.
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.
If an applicant does establish one issue but not the other, his application must fail.
In view of this I see no possibility of the applicant’s intended appeals being rendered nugatory.
If there will be any loss, it will be economic, which I think is quantifiable, and the court will be entitled to make appropriate orders to remedy any such loss.
As Deverell JA is also of the same view, it is hereby ordered that Civil Application Nos.4 and 5 be and are hereby dismissed with costs.
Issues in the judgment
#The judgment inconsistently refers to the superior court decision as Miscellaneous Civil Application No. 946 of 2005 in the heading and No. 967 of 2005 in the body
The rule under which the applications were dismissed is variously cited as rule 5(2)(b) and 'rule 5(2) (b)(e)'
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "MBARAKI BULK TERMINAL LTD v EAST AFRICAN BULKING SERVICES LTD & 2 OTHERS [2007] KECA 120 (KLR)", Case Analysis (2007). Civil Application Nos. 4 & 5 of 2007. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2007/120/eng@2007-03-16
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.