Kenya Deposit Insurance Corporation (as Liquidator of Dubai Bank Kenya Limited) v Rapid Communications Limited & 2 others; Bank of Africa Kenya Limited & 2 others (Interested Party) [2019] KECA 410 (KLR)
The bottom line
#Kenya's Court of Appeal confirmed that a judge can revisit a ruling before it is formally finalized, so the Kshs.25 million deposit stays frozen until the main case ends.
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 High Court (Olga Sewe, J.) was functus officio when, after the ruling of 22nd December 2017, it made a further order on 20th April 2018 that the escrow funds remain in the joint account instead of being released to KDIC
- 2.Whether the trial court erred in failing to order discharge of the mortgaged property after the amount owed was deposited in court (cross appeal)
Key legal issues
#Whether the High Court was functus officio when it revisited the release of the escrow deposit
The doctrine of functus officio did not apply because the order had not been perfected and the court had expressly reserved the issue for further orders, with all parties participating in the subsequent proceedings.
The Court held that finality, the core of the functus officio doctrine, is achieved when a judgment or order is perfected - drawn up, issued and entered - as explained in Jersey Evening Post vs Al Thani and Telkom Kenya vs John Ochanda. Here the impugned order of 22nd December 2017 was never perfected; the judge made a further order reserving the release of the funds for mention, and all parties were present and participated in the deliberations leading to the 20th April 2018 order, which was expressly made 'further to' the earlier orders. A court may therefore reserve the right to revisit a particular issue in its judgment without offending the doctrine.
The status and destination of the Kshs.25 million escrow deposit
The deposit shall remain in the escrow account until the hearing and determination of the High Court suit or further orders of that court; the signatories to the joint account are trustees of the deposit.
Escrow means an account held in trust or as security. Although the trial court's order of 23rd January 2017 for the deposit predated Sultan's enjoinment, the court overlooked its order of 30th January 2017 enjoining Sultan as a party and making it a signatory to the joint account. The signatories therefore became trustees of the deposit until the purpose of the deposit is concluded or the court makes further orders, and the funds must remain in situ pending trial.
The cross appeal seeking discharge of the Charge on the security
The cross appeal fails: the prayer for discharge is a triable substantive issue in the main suit, was not appealed against, and is incompatible with the escrow funds remaining in situ.
The trial court had rejected the prayer for discharge of the Charge because it was a substantive prayer in the plaint triable at the hearing of the suit. Sultan did not appeal against that ruling of 22nd December 2017, so a cross appeal was misplaced. Further, since the Court upheld the retention of the escrow deposit, an order for discharge of the security would be mutually incompatible with that finding. Both appeal and cross appeal were dismissed with each party bearing its own costs.
Legal principles established
#- Once a court pronounces itself with finality on an issue, it has no power to revisit the merits except on appeal, review under Order 45 CPR, or the slip rule; but finality under the functus officio doctrine is achieved only when the judgment or order has been perfected (drawn up, issued and entered), and a court may in its judgment reserve the right to revisit an issue, in which case the doctrine does not apply.
- The slip rule does not confer jurisdiction on a court to sit on appeal over its own judgment or to extensively review or substantially alter it.
Court orders
#- 1.The appeal is dismissed
- 2.The cross appeal is dismissed
- 3.The funds deposited in escrow in an interest earning joint bank account shall so remain until the hearing and determination of the case before the High Court or until further orders of that court
- 4.Each party shall bear its own costs
The bench
#One judgment of the whole court — no separate or dissenting opinions.
Wrote the judgment
Wrote the judgment
Wrote the judgment
- On appeal from
- High Court of Kenya at Nairobi
- Civil Suit No. 22 of 2017
- Jurisdiction invoked
- First appeal to the Court of Appeal under the Court of Appeal Rules against a ruling of the High Court in Civil Suit No. 22 of 2017
Relief refused
#KDIC's appeal seeking release of the escrow deposit to it
The impugned order had not been perfected and there was a further order that the issue would be revisited, with all parties participating; functus officio did not apply
Sultan's cross-appeal prayer for release of the escrow money to it
The signatories to the joint account are trustees of the deposit until its purpose is concluded or the court makes further orders
Sultan's cross-appeal prayer for discharge of the Charge on the security
The issue is a triable substantive prayer, no appeal lay against the ruling refusing it, and it is mutually incompatible with the escrow funds remaining in situ
Costs
Each party shall bear its own 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.
So that, finality, which is at the core of the doctrine of functus officio, is achieved when the judgment or order has been 'perfected' or 'drawn up, issued and entered'.
In those circumstances, it is our view that the doctrine of functus officio did not apply. We so find.
Even then, the slip rule does not confer jurisdiction or powers on the courts to sit on appeal over their own judgments or to extensively review or substantially alter them.
The signatories then became trustees until the purpose for which the deposit was made is concluded or the court makes further orders.
The upshot is that both the appeal and the cross appeal are lacking in merit and we order that they be and are hereby dismissed. Each party shall bear its own costs.
Issues in the judgment
#The judgment refers to Sultan Palace Development once as the '3rd respondent' and elsewhere as the '3rd interested party' in the same passage
Key timeline
#Practical implications
#Frequently asked questions
#Later judgments citing this (1)
#Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.
- Unifresh Exotics (K) Limited v Kaoyeni Enterprises Limited (Civil Appeal E065 of 2022) [2025] KECA 872 (KLR)[2025] KECA 872 (KLR)23 May 2025followed
Cite this brief
#Cite this brief
Caselaw, "Kenya Deposit Insurance Corporation (as Liquidator of Dubai Bank Kenya Limited) v Rapid Communications Limited & 2 others; Bank of Africa Kenya Limited & 2 others (Interested Party) [2019] KECA 410 (KLR)", Case Analysis (2019). Civil Appeal No. 194 of 2018. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2019/410/eng@2019-07-19
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.