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Court of AppealAllowedCivil Application (rule 5(2)(b) motion dated December 1, 2023) arising from intended appeal against HCOMM No. E320 of 2022· [2024] KECA 97 (KLR)

National Irrigation Authority (formerly The National Irrigation Board) v Sogea-satom S.a.s

Court of Appeal of Kenya
9 February 2024
1,286 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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The Court of Appeal halted enforcement of a multi-million-shilling ruling against the National Irrigation Authority, because the French contractor owns no assets in Kenya.

What this practically means

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Executive summary

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The National Irrigation Authority moved the Court of Appeal under rule 5(2)(b) of the Court of Appeal Rules, 2022 seeking a stay of execution of a ruling delivered on 26 September 2023 by the High Court at Nairobi (Majanja, J.) in HCOMM No. E320 of 2022, pending its intended appeal. The underlying dispute concerns contract NIB/T/096/2011-2012 for civil works on the Mwea Irrigation Development Project in Kirinyaga County, worth over KES 3.5 billion. A Dispute Board issued four decisions in favour of the respondent, SOGEA-SATOM S.A.S, totalling several hundred million shillings. The High Court held that the plaintiff was entitled to enforce the Dispute Board decisions as there was, in the judge's view, no dispute for resolution, dismissed the applicant's application to refer the matter to arbitration and stay the proceedings, and allowed summary judgment. Before the Court of Appeal, the applicant argued that it had an arguable appeal - on the existence of a dispute requiring arbitration, the absence of triable issues, and the distinction between provisional and binding Dispute Board decisions - and that the appeal would be rendered nugatory because execution was imminent and the respondent, a foreign company with no known Kenyan assets, might be unable to refund. The respondent countered that it had a Kenyan branch and subsidiary capable of satisfying any award. Applying the settled two-limb test, the court found a single arguable ground suffices and identified two bona fide grounds; on the nugatory limb, it held the applicant had shown reasonable grounds for doubting recovery, shifting the evidential burden to the respondent, who gave no evidence of financial capability. Balancing the parties' interests, the court allowed the application, stayed execution of the High Court ruling pending the intended appeal, and ordered costs of the motion to be in the appeal.

Key legal issues

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01

Arguability of the intended appeal

Holding

The draft memorandum of appeal raised at least two arguable grounds: whether the trial court wrongly found no triable issue, and whether there was a dispute for resolution necessitating arbitration.

Reasoning

The court perused the draft memorandum and identified two grounds standing out on arguability: the finding that the applicant raised no triable issue, and whether a dispute existed for arbitration. Citing precedent, the court held that a single bona fide arguable point suffices and need not succeed at full hearing. The first limb was therefore satisfied without interrogating the remaining grounds.

p. 2
02

Whether the appeal would be rendered nugatory without stay

Holding

Yes. The respondent owns no property in Kenya, and although it claimed a Kenyan branch and subsidiary, it provided no evidence of financial capability; the applicant would suffer disproportionate hardship if successful on appeal but unable to recover.

Reasoning

It was undisputed the respondent owned no property in Kenya. The evidential burden therefore shifted to the respondent, who asserted a Kenyan branch and subsidiary but produced no proof of financial capability. Balancing the parties' interests, the court found enforcement procedures against a foreign company inadequate protection, and that refusing stay would cause hardship out of proportion to any prejudice to the respondent.

p. 3

Legal principles established

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  • On a rule 5(2)(b) application the applicant must first demonstrate an arguable, non-frivolous appeal, and second that the appeal will be rendered nugatory if stay is refused.
  • A single arguable ground suffices to satisfy the first limb; it need not be a point that must succeed on full hearing.
  • A mere assertion that the respondent may be unable to refund the decretal sum is insufficient; the applicant must provide reasonable grounds, after which the evidential burden shifts to the respondent.

Court orders

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  1. 1.Stay of execution of the ruling dated September 26, 2023 delivered by the High Court at Nairobi (Majanja, J.) in HCOMM No. E320 of 2022, pending the hearing and determination of the intended appeal
  2. 2.Costs of the motion to be in the appeal
On appeal from
High Court of Kenya at Nairobi
HCOMM No. E320 of 2022
Jurisdiction invoked
Rule 5(2)(b) of the Court of Appeal Rules, 2022 (discretionary jurisdiction to grant stay of execution pending 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, "National Irrigation Authority (formerly The National Irrigation Board) v Sogea-satom S.a.s", Case Analysis (2024). Civil Application (rule 5(2)(b) motion dated December 1, 2023) arising from intended appeal against HCOMM No. E320 of 2022. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2024/97/eng@2024-02-09

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