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Court of AppealAllowedNotice of motion dated 23rd March, 2021 (Civil Application)· [2021] KECA 188 (KLR)

Kenafric Matches Ltd v Match Masters Limited & another (Civil Application E092 of 2021) [2021] KECA 188 (KLR)

Court of Appeal of Kenya
19 November 2021
DMD. MusingaRNR. N. NambuyeJMJ. Mohammed
2,079 words in judgment
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The bottom line

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Kenya's Court of Appeal paused a trademark injunction against Kenafric Matches, ruling the appeal was arguable and stopping the injunction would cause losses too big to compensate with money.

What this practically means

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Executive summary

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This is a single-judgment decision of the Court of Appeal at Nairobi (Musinga, P, Nambuye and Mohammed, JJA) on a notice of motion dated 23rd March 2021 brought by Kenafric Matches Limited under rule 5(2)(b) of the Court of Appeal Rules, seeking stay of execution of a High Court ruling in Commercial Case No. E250 of 2020 and a stay of those proceedings pending an intended appeal. The High Court had granted Match Masters Limited a temporary injunction restraining Kenafric from selling, producing and marketing its 'BIG FIVE' and 'BIG 5' safety matches pending the main suit, with an undertaking in damages of Kshs 10 million. Applying the settled twin principles from Trust Bank Limited v Investech Bank Limited and Stanley Kang'ethe Kinyanjui v Tony Ketter, the court found the intended appeal arguable, notably on whether the High Court had granted a mandatory injunction at an interlocutory stage, and found that the appeal would be rendered nugatory because the applicant faced losses of about Kshs 378 million over four months, losses not compensable in damages, and potential job losses. The application was allowed, with costs to abide the outcome of the intended appeal. No separate opinions were written; the bench was unanimous. The decision binds subordinate courts and the High Court on the rule 5(2)(b) twin principles as applied to the facts.

Key legal issues

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01

Whether the intended appeal is arguable

Holding

The intended appeal is arguable, particularly on whether the High Court erred in granting a mandatory injunction at an interlocutory stage.

Reasoning

The court considered the grounds in the motion and draft memorandum of appeal. It found a single bona fide arguable ground sufficient, specifically that the High Court's order restraining production and sale amounted to a mandatory injunction granted at an interlocutory stage. It declined to make definitive findings lest it embarrass the bench hearing the main appeal.

p. 4
02

Whether the appeal would be rendered nugatory if stay is not granted

Holding

The appeal would be rendered nugatory because the applicant stands to lose about Kshs 378 million over four months, suffer losses not compensable in damages, and its employees may lose jobs.

Reasoning

The court weighed the conflicting claims of both parties on their merits. It found that cessation of production and sale would cause substantial financial losses including breach of trust with stakeholders and suppliers and loss of livelihoods, which the 1st respondent's Kshs 10 million undertaking in damages would not adequately compensate.

p. 4

Legal principles established

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  • An applicant under rule 5(2)(b) must demonstrate both that the appeal or intended appeal is arguable and that, if successful, it will be rendered nugatory absent a stay.
  • An arguable appeal is not one that must necessarily succeed, but one that is not frivolous and ought to be argued fully before the court.
  • In determining whether an appeal will be rendered nugatory, the court must consider the conflicting claims of both parties and each case on its merits; the test is whether what is sought to be stayed is reversible or reasonably compensable in damages.

Court orders

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  1. 1.The application dated 23rd March, 2021 is allowed
  2. 2.Costs shall abide by the outcome of the intended appeal
On appeal from
High Court of Kenya
High Court Commercial Case No. E250 of 2020
Jurisdiction invoked
Rule 5(2)(b) of the Court of Appeal Rules

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (1)

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Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.

Cite this brief

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Cite this brief

Caselaw, "Kenafric Matches Ltd v Match Masters Limited & another (Civil Application E092 of 2021) [2021] KECA 188 (KLR)", Case Analysis (2021). Notice of motion dated 23rd March, 2021 (Civil Application). Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2021/188/eng@2021-11-19

Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.