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Court of AppealPartially AllowedMotion dated 8th July 2021 (intended appeal from HCCC 6 of 2019, Bungoma)· [2022] KECA 114 (KLR)

County Government of Trans Nzoia v Hersi & 3 others (Civil Application E104 of 2021) [2022] KECA 114 (KLR)

Court of Appeal
11 February 2022
RNR. N. NambuyePKP. O. KiageFTF. Tuiyott
727 words in judgment
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The bottom line

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Kenya's Court of Appeal paused execution of a Kshs. 33 million judgment against Trans Nzoia County, but only if it secures a Kshs. 10 million bank guarantee within 30 days.

What this practically means

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Executive summary

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The County Government of Trans Nzoia moved the Court of Appeal at Kisumu under Rule 5(2)(b) of the Court of Appeal Rules for a stay of execution of a High Court judgment (HCCC 6 of 2019, Bungoma, delivered 3rd June 2021) awarding the 1st and 2nd respondents Kshs. 33,000,000. The suit arose from a road maintenance tender awarded to Miltone Contractors Limited, which borrowed Kshs. 30,000,000 from Eco Bank Kenya Limited secured by a charge over parcel EAST BUKHUSU/SOUTH KANDUYI/2952, and a tripartite domiciliation agreement under which the County Government was to channel tender payments through the bank, which held a lien over the proceeds. When payments were not made and the bank threatened to exercise its statutory power of sale, the 1st and 2nd respondents sued and obtained judgment against the County Government. The applicant argued its intended appeal was arguable, contending the learned Judge erred in applying the Public Procurement and Disposal Act and in ignoring illegalities in the tendering process. The 1st and 2nd respondents opposed, maintaining a valid agreement existed. Applying the settled Kinyanjui v Ketter test, the court found the grounds arguable and that the appeal would be rendered nugatory absent relief. It granted a stay conditioned on the applicant providing a Kshs. 10,000,000 bank guarantee with Eco Bank within 30 days, failing which the order lapses; if complied with, the stay extends to the hearing and determination of the appeal. Costs were ordered to abide the intended appeal. The judgment does not disturb the High Court decision; the interlocutory application was allowed on conditional terms.

Key legal issues

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Whether the applicant met the Rule 5(2)(b) threshold of an arguable appeal and nugatory prejudice

Holding

The court found the grounds arguable and held that refusal of relief would render the appeal nugatory, warranting a conditional stay secured by a bank guarantee

Reasoning

Applying the settled two-limb test from Kinyanjui v Ketter, the court concluded the grounds raised on the intended appeal were arguable, and that without relief the appeal would be nugatory. Balancing the parties' interests, given the sum involved and the risk of foreclosure to the 2nd respondent, the court conditioned the stay on provision of a Kshs. 10,000,000 bank guarantee within 30 days.

p. 2

Legal principles established

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  • An applicant for relief under Rule 5(2)(b) must show both an arguable appeal and that the appeal would be rendered nugatory if the orders sought (stay or injunction) are not granted

Court orders

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  1. 1.Stay of proceedings/execution granted on condition that the applicant provides a bank guarantee for Kshs. 10,000,000 with the 3rd respondent (Eco Bank Kenya Limited) within 30 days, failing which the interim order shall lapse
  2. 2.If the condition is complied with, the stay shall extend to the hearing and determination of the appeal
  3. 3.Costs of the motion to be in the intended appeal
On appeal from
High Court
HCCC 6 of 2019 at Bungoma
Jurisdiction invoked
Rule 5(2)(b) of the Court of Appeal Rules, founded on a filed notice of appeal

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, "County Government of Trans Nzoia v Hersi & 3 others (Civil Application E104 of 2021) [2022] KECA 114 (KLR)", Case Analysis (2022). Motion dated 8th July 2021 (intended appeal from HCCC 6 of 2019, Bungoma). Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2022/114/eng@2022-02-11

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