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Court of AppealPartially AllowedCivil Application No. 76 of 2020

Stephen Kamau Njoroge & 2 others v Cabinet Secretaryministry of Trade & Industry & 7 others [2021] KECA 759 (KLR)

Court of Appeal of Kenya
19 March 2021
1,656 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~7 min to read original · ~4 min brief

The bottom line

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Kenya's Court of Appeal paused changes at KPCU until its appeal is heard, prioritising coffee farmers' interests while fast-tracking the case.

What this practically means

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Executive summary

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This was a single-judge-motion application under Rule 5(2)(b) of the Court of Appeal Rules by the three joint liquidators of Kenya Planters Coffee Union (KPCU), appointed after the Commissioner of Co-operatives cancelled KPCU's registration and placed it under liquidation. Nyamweya, J. of the High Court had on 10 February 2020 quashed that decision, holding the Commissioner acted ultra vires, with ulterior motives, unprocedurally and unconstitutionally, and ordered KPCU restored to its pre-cancellation state. The applicants sought stay of those orders pending an intended appeal, arguing the appeal was arguable and that without stay, gains in the liquidation process - including settlement of farmers' debts with a 3 billion shilling government cherry fund - would be lost. The 4th to 8th respondents opposed, arguing the appeal was not arguable, that the applicants were in continuing contempt of the quashing orders, and that stay would be a blank cheque to complete the liquidation. Applying the settled two-pronged test - an arguable appeal and the nugatory aspect - the court found the intended appeal arguable on whether the respondents prematurely invoked the High Court without exhausting the Co-operative Act remedy and whether they demonstrated interests in KPCU. On the nugatory limb, the court held the coffee farmers' interest paramount and granted an order maintaining the status quo ante rather than a conventional stay, directed the record of appeal be filed within sixty days, tied the appeal with Civil Appeal No. 367 of 2014 for case management with priority hearing, and ordered costs of the application to abide the appeal's outcome. The decision is a ruling on an interlocutory application and does not disturb the High Court's judgment.

Questions the Court framed

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The issues the Court set itself to decide, in its own words.

  1. 1.Whether the intended appeal is arguable and not frivolous
  2. 2.Whether, if the stay order sought is not granted, the appeal will be rendered nugatory
  3. 3.What orders should issue pending the hearing and determination of the intended appeal

Key legal issues

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01

Whether the intended appeal was arguable under Rule 5(2)(b)

Holding

The court was satisfied prima facie that the issues raised - whether the 4th to 8th respondents invoked the High Court prematurely without exhausting the Co-operative Act remedy, and whether they demonstrated their interests in KPCU - were arguable.

Reasoning

The applicants raised several grounds for the intended appeal, key among them whether the respondents filed suit prematurely without following the procedure for challenging the Commissioner's decision under the Co-operative Act, and whether they demonstrated interests in KPCU with its large membership. The court was persuaded prima facie that these issues were arguable, while cautioning that an arguable appeal need not necessarily succeed but need only be argued fully before the court.

p. 2
02

Whether the appeal would be rendered nugatory absent relief, and what relief should issue

Holding

Considering that KPCU has many shareholders, that the government pumped in a cherry fund of 3 billion shillings, that contempt allegations were unsupported by any application, and the public interest implications, the court maintained the status quo ante and fast-tracked the appeal.

Reasoning

It was common ground that KPCU has many other shareholders and that the government injected a 3 billion shilling cherry fund. The respondents alleged contempt but filed no application to commit the applicants. Weighing the public interest implications and the interest of coffee farmers as paramount, the court opted to maintain the status quo ante rather than a conventional stay, directed that the record of appeal be filed within sixty days, and tied the appeals together with priority hearing dates.

p. 3

Legal principles established

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  • An applicant under Rule 5(2)(b) must establish that the appeal or intended appeal is arguable and that unless an injunction or stay is granted the success of the appeal will be rendered nugatory
  • An arguable appeal is not one that must necessarily succeed, but one which ought to be argued fully before the Court

Court orders

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  1. 1.There be an order maintaining the status quo ante
  2. 2.The applicants to file and serve the record of appeal within sixty (60) days from the date hereof
  3. 3.Civil Appeal No. 367 of 2014 be tied together with the instant appeal for case management
  4. 4.Both appeals be given a priority hearing date
  5. 5.Costs of the application to abide the outcome of the appeal

The bench

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One judgment of the whole court — no separate or dissenting opinions.

William Ouko
W. OukoJA
Currently serving
majority
majority
Martha Karambu Koome
M. K. KoomeJA
Currently serving
majority
On appeal from
High Court of Kenya at Nairobi
NRB Jud. Rev. Misc Appl. No. 263 of 2019
Jurisdiction invoked
Rule 5(2)(b) of the Court of Appeal Rules
Consolidated with
Civil Appeal No. 367 of 2014 (tied together with the instant appeal for case management)

Relief refused

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A conventional order of stay of execution of the judgment and decree of the High Court

The court instead granted an order maintaining the status quo ante, holding that the interest of the coffee farmers is paramount pending the appeal

p. 3

Costs

Costs of the application to abide the outcome of the appeal.

Quotable passages

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Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.

For an applicant to succeed, he must not only show that his appeal or intended appeal is arguable but also that unless the Court grants him an injunction or stay as the case may be, the success of that appeal will be rendered nugatory.
p. 2Test for relief under Rule 5(2)(b)
an arguable appeal is not one that must necessarily succeed, but one which ought to be argued fully before the Court.
p. 3Meaning of an arguable appeal
As matters stand, we think the interest of the coffee farmers is paramount and until the appeal is heard and determined, the order that commends itself is one maintaining the status quo ante.
p. 3Basis for the relief granted
1. There be an order maintaining the status quo ante. 2. The applicants to file and serve the record of appeal within sixty (60) days from the date hereof. 3. Civil Appeal No. 367 of 2014 be tied together with the instant appeal for case management. 4. Both appeals be given a priority hearing date. 5. Costs of the application to abide the outcome of the appeal.
p. 3Final orders of the court

Issues in the judgment

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minor

The judgment contains typographical defects, including 'Githunguri vs. Jimba Credit Corporation Ltd. No. 2 [198] KLR 838' (incomplete year citation) and inconsistent spelling of 'KPCU' as 'New Kenya Planters Union Public Limited Company'.

Key timeline

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Practical implications

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Frequently asked questions

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Cite this brief

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Cite this brief

Caselaw, "Stephen Kamau Njoroge & 2 others v Cabinet Secretaryministry of Trade & Industry & 7 others [2021] KECA 759 (KLR)", Case Analysis (2021). Civil Application No. 76 of 2020. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2021/759/eng@2021-03-19

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