First Community Bank Limited v Isaac Investments Limited (Civil Application 386 of 2021) [2023] KECA 319 (KLR)
The bottom line
#Kenya's Court of Appeal ruled you cannot get a stay of execution against a dismissal order, and you must appeal the specific order you want stayed.
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 Bank had an arguable intended appeal against the dismissal of its application for review
- 2.Whether the intended appeal would be rendered nugatory if stay of execution of the Ruling of October 13, 2021 was not granted
- 3.Whether an order of stay of execution can issue against a negative order (dismissal of an application for review)
Key legal issues
#Whether a stay of execution can be granted in respect of a negative order dismissing an application for review
No. A negative order that merely dismisses an application and confers no relief is not capable of execution or stay.
The Court relied on George Ole Sangui v Kedong Ranch Limited, where it held that a dismissal order is not a positive order requiring any party to do or refrain from doing anything, is not capable of execution or enforcement, and cannot be stayed. The Ruling of October 13, 2021 merely dismissed the review application; staying it would not affect the orders of July 22, 2021, whose execution through arbitration was already in progress.
Whether the stay sought could be anchored on an appeal against the dismissal of the review application rather than the substantive ruling
No. The Bank filed no notice of appeal against the Ruling of July 22, 2021 which it effectively sought to stay.
The Court observed that the Bank had only appealed against the October 13, 2021 ruling dismissing review. The operative orders it wished to stay were those of July 22, 2021 referring the dispute to arbitration and preserving the suit property. An applicant under Rule 5(2)(b) must appeal against the order sought to be stayed; a stay cannot ride on an appeal against a different order.
Whether the intended appeal would be rendered nugatory absent the stay
No. Execution of the arbitration referral and preservatory orders could not render an appeal against the review dismissal nugatory.
Applying the Kinyanjui principles, the Court found the nugatory limb unmet: the dispute was already subject to arbitration under the Arbitration Act, the July 22, 2021 orders were interim preservatory orders, and no third-party interests were demonstrated, as no third party had been enjoined nor evidence of their interests produced.
Legal principles established
#- An order of stay of execution cannot be anchored on an appeal against a negative order (such as dismissal of an application for review), as such an order is not capable of execution or enforcement.
- An application for stay under Rule 5(2)(b) cannot be sustained against a ruling where the applicant filed no notice of appeal against the operative order sought to be stayed.
Court orders
#- 1.The Bank's notice of motion dated November 10, 2021 is dismissed with costs
The bench
#One judgment of the whole court — no separate or dissenting opinions.
- On appeal from
- High Court
- Jurisdiction invoked
- Sections 3A and 3B of the Appellate Jurisdiction Act and Rules 5(2)(b) & 42 of the Court of Appeal Rules, 2010
Relief refused
#Stay of execution of the Ruling and orders delivered on October 13, 2021
The order appealed against is a negative order dismissing an application for review, which is not capable of execution or stay
Order for status quo ante the Ruling of July 22, 2021
The orders of July 22, 2021 referring the dispute to arbitration and preserving the property could not be stayed through an appeal against the dismissal of a review application
Costs
The Bank's notice of motion dated November 10, 2021 is dismissed with 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.
In the circumstances before us, the Bank has not met the threshold for granting orders of stay of execution under Rule 5(2)(b) of the Court of Appeal Rules.
Accordingly, the Bank's notice of motion dated November 10, 2021 is dismissed with costs
The application for stay of the Ruling of July 22, 2021 cannot be anchored on the appeal against the order dismissing the application for review of the Ruling of July 22, 2021. If the Bank was aggrieved by the Ruling and orders made on July 22, 2021, it ought to have filed an appeal against that order.
The act of dismissal of the suit could not be stayed. It is our finding that to the extent to which the application seeks stay of the order of the dismissal of the suit it cannot be granted.
Without complying with the principles in this Rule, the Bank cannot seek refuge under section 3A and 3B of the Appellate Jurisdiction Act, that requires the Court to facilitate the just, fair, expeditious, proportionate and accessible resolution of disputes.
Issues in the judgment
#The judgment refers to the ruling of July 22, 2021 as having been delivered with orders, but in one passage refers to orders 'issued on July 12, 2021', an apparent internal date inconsistency
The judgment cites 'Rule 6 of the Arbitration Act' although the Arbitration Act contains sections, not rules
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "First Community Bank Limited v Isaac Investments Limited (Civil Application 386 of 2021) [2023] KECA 319 (KLR)", Case Analysis (2023). Civil Application No. Nai. of 2021 (Notice of Motion dated November 10, 2021). Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2023/319/eng@2023-03-17
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.