CFC Financial Services Limited v Juja Road Fancy Store Limited [2010] KECA 425 (KLR)
The bottom line
#Kenya's Court of Appeal stopped jail-bound contempt proceedings against a company's officers, confirming a stay where an appeal raised arguable points.
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 intended appeal would be rendered nugatory if the stay is not granted
Key legal issues
#Whether the intended appeal is arguable under Rule 5(2)(b)
The Court found the appeal arguable because the order required reversal and cancellation of register entries in shares, which raised arguable points even if the applicant acted without authority.
The applicant was required to reverse and cancel the entry reflecting the purchase of 10,000 shares of ICDC Investments Company Limited registered in the respondent's name. The Court considered that reversing the entries and transferring shares to someone else raised arguable points, noting the respondent had not sought refund of the purchase money. Arguability does not require the appeal to ultimately succeed.
Whether the appeal would be rendered nugatory absent a stay
The nugatory test was satisfied because the respondent had applied to commit officers of the applicant to civil jail for six months for non-compliance, and if committed, a successful appeal would be rendered nugatory.
The respondent had made an application in the superior court for committal of certain officers of the applicant to civil jail for six months for failure to comply with the order of 6th February 2009. If those officers were committed and the appeal eventually succeeded, the success would have been rendered nugatory. Both requirements of Rule 5(2)(b) were therefore satisfied.
Legal principles established
#- An arguable appeal is not one that must succeed; it suffices that the appeal raises arguable points.
Court orders
#- 1.Order of stay of execution in the terms contained in prayers 1 and 2 of the motion
- 2.Costs of the motion to be in the appeal
The bench
#One judgment of the whole court — no separate or dissenting opinions.
- On appeal from
- High Court of Kenya at Nairobi, Milimani Commercial Court
- H.C. C.C. No. 331 of 2008
- Jurisdiction invoked
- Rule 5(2)(b) of the Court of Appeal Rules
Relief refused
#Prayers 3 and 4 of the notice of motion
The Court saw no reason to grant the additional orders sought and rejected them.
Costs
The costs of the motion shall be in the 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.
The applicant has thus satisfied both requirements for an application under Rule 5 (2) (b) of the Court’s Rules.
The Court has repeatedly pointed out that an arguable appeal does not in any way connote an appeal that will or must succeed.
Accordingly we allow the applicant’s notice of motion dated 13th November, 2009 and lodged in the Court on 16th November, 2009 with the result that there shall be an order of stay in the terms contained in prayers 1 and 2 of the motion.
The costs of the motion shall be in the appeal. Those shall be the orders of the Court.
Issues in the judgment
#The ruling refers to Khaminwa, J with both 'he' and 'she' pronouns: 'Khaminwa, J ruled on that application on 23rd October, 2009. She granted to the applicant leave to appeal' versus earlier 'made by the superior court (Khaminwa, J)'. The gendered reference is internally inconsistent with the earlier description 'the learned Judge’s order'.
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "CFC Financial Services Limited v Juja Road Fancy Store Limited [2010] KECA 425 (KLR)", Case Analysis (2010). Civil Application No. 328 of 2009. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2010/425/eng@2010-02-05
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.