Arvind Velji Shah v Zaverchand Sojpal Jetha Holdings Ltd & 5 others [2009] KECA 316 (KLR)
The bottom line
#Kenya's Court of Appeal ruled it has no power to 'stay' an injunction, so businesses must comply with injunctions pending appeal.
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 (not frivolous)
- 2.Whether the success of the intended appeal would be rendered nugatory if the orders sought were refused
- 3.Whether the Court has jurisdiction under rule 5(2)(b) of the Court of Appeal Rules to grant a stay of an injunction
Key legal issues
#Whether rule 5(2)(b) of the Court of Appeal Rules empowers the Court to stay an injunction
It does not; the rule permits only a stay of execution, an injunction, or a stay of further proceedings, and a stay of an injunction is not among them.
The Court examined the text of rule 5(2)(b), which lists three types of orders: a stay of execution, an injunction, and a stay of any further proceedings. A stay of an injunction is omitted. The Court reasoned that granting a stay of an injunction would nullify the injunction before the appeal against it is heard, an omission likely intended by the Rules Committee. Following Consolidated Bank of Kenya v Usafi Limited, the Court held that an injunction once granted is in force and requires no execution.
Whether the intended appeal was arguable
Yes; both limbs of the rule 5(2)(b) test as to arguability were effectively conceded and the Court agreed the intended appeal was arguable and not frivolous.
Counsel for the 1st and 3rd to 6th respondents conceded arguability. The Court observed that the learned Judge granted injunction orders without hearing the application inter partes, and that if he merely extended interim orders, the extension prima facie offended order 39 rule 3(2) of the Civil Procedure Rules. However, the Court made no final decision on those matters, reserving them for the appeal court.
Whether refusal of the stay would render the intended appeal nugatory
The Court did not reach the nugatory limb because it found it had no jurisdiction to grant the orders sought in the first place.
Although the applicant argued that the companies would become insolvent and that he risked bankruptcy on personal guarantees, the Court held that the orders sought were simply not available under rule 5(2)(b) since the order to be stayed was an injunction. With no jurisdiction to make the orders, the nugatory-ness inquiry was immaterial and the application had to be dismissed.
Legal principles established
#- Rule 5(2)(b) of the Court of Appeal Rules does not confer jurisdiction on the Court to grant a stay of an injunction; the only orders available are a stay of execution, an injunction, or a stay of further proceedings.
- An injunction, once ordered, is in force and requires no further proceedings to give effect to it, so it cannot be 'stayed' or stayed in execution.
- An application under rule 5(2)(b) must satisfy the twin tests: the appeal or intended appeal must be arguable, and its success must not be rendered nugatory if the orders sought are refused.
- An injunction imposes a duty to stop doing something rather than a duty to do something, and such orders cannot be executed for purposes of stay.
Court orders
#- 1.The notice of motion dated seeking stay pending intended appeal is dismissed
- 2.No order as to costs
The bench
#One judgment of the whole court — no separate or dissenting opinions.
- On appeal from
- High Court of Kenya at Mombasa
- Mombasa H.C.C.C. No. 2 of 2009
- Jurisdiction invoked
- Rule 5(2)(b) of the Court of Appeal Rules
Relief refused
#Stay of the High Court injunction orders pending the hearing and determination of the intended appeal
The Court had no jurisdiction under rule 5(2)(b) to stay an injunction; that rule permits only a stay of execution, an injunction, or a stay of further proceedings, and a stay of an injunction is not included.
Costs
No order as to costs. The judgment states: 'The application is dismissed. We make no order as to costs.'
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 consider that under the rule in its present form there are only three types of orders permitted to be made under rule 5 (2) (b) namely; (i) a stay of execution. (ii) an injunction. (iii) a stay of any further proceedings
We are of the view that once an injunction has been ordered it is in force and no further proceedings are required to give effect to it.
The application is dismissed. We make no order as to costs.
First the applicant must demonstrate that the appeal or the intended appeal is arguable, that is to say, it is not frivolous. Secondly he must also show to the satisfaction of the Court that were the appeal or the intended appeal to succeed, that success would be rendered nugatory by the refusal of the Court to grant the orders sought
Having come to the conclusion that we have no jurisdiction under rule 5 (2)(b) to grant the order sought we need say no more than that the Notice of Motion dated 12 th July 2005 is incompetent and we order that it be and is hereby struck out with no order as to the costs thereof.
Issues in the judgment
#The judgment quotes a passage from Consolidated Bank of Kenya v Usafi Limited which refers to a 'Notice of Motion dated 12 th July 2005', a date inconsistent with the present 2009 application, creating ambiguity as to whether the quoted striking-out order text is being applied verbatim to this case.
The judgment refers to 'order 39 rule 3 (2) of the Civil Procedure Code' in one passage although the Rules elsewhere are consistently cited as the Civil Procedure Rules.
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Arvind Velji Shah v Zaverchand Sojpal Jetha Holdings Ltd & 5 others [2009] KECA 316 (KLR)", Case Analysis (2009). Civil Application No. 96 of 2009 (UR 60/09). Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2009/316/eng@2009-05-29
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.