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Court of AppealDismissedNot stated in extract (Court of Appeal, Nairobi)· [2024] KECA 1210 (KLR)

Avistia Sro Limited v Maina Stephen Njenga & 8 others

Court of Appeal
20 September 2024
PKP. O. KiageKMK. M'inotiFTF. Tuiyott
2,433 words in judgment
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The bottom line

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Kenya's Court of Appeal refused to freeze disputed bank funds on appeal because the money was already gone and other court orders protected what remained.

What this practically means

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Executive summary

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By a motion dated 28th December 2023 under sections 3A and 3B of the Appellate Jurisdiction Act and Rule 5(2)(b) of the Court of Appeal Rules, the applicant sought stay of execution of the entire judgment and decree of the High Court (Commercial & Admiralty Division) at Nairobi, delivered by Mabeya J on 19th December 2023, together with an injunction restraining the respondents from withdrawing or transacting on three bank accounts held by the 6th respondent bank, pending an intended appeal. The High Court had dismissed the applicant's claim, holding inter alia that the agreement it relied on was not executed by or on behalf of the 10th respondent and that the applicable law was Singaporean. The 6th respondent opposed, deposing that following the judgment the account mandates had been restored and the 10th respondent had withdrawn the funds, leaving balances of Ksh.510,190, USD 488,632.37 and Nil, with the USD balance subject to a lien order in separate proceedings. The court applied the settled Rule 5(2)(b) test - an arguable appeal and nugatory-ness - and found the appeal arguable on the nature of the relationship between the parties, but held that the application was moot because the funds had been withdrawn and the remaining balances were already the subject of lien and status quo orders issued by other judges, which this Court could not interfere with except on appeal. Relying on the Supreme Court's mootness doctrine in Dande, the Court dismissed the application in toto with costs to the 6th, 7th, 8th and 10th respondents. Kiage, M'inoti and Tuiyott JJA delivered one unanimous judgment.

Key legal issues

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01

Whether an application for stay/injunction survives where the subject matter has been dissipated and the funds are subject to other court orders

Holding

The application is moot and fails entirely notwithstanding arguability of the appeal

Reasoning

The funds in the subject accounts had largely been withdrawn, and the balances remaining were subject to a lien order in Conrad Law Associates LLP and status quo orders issued by Mong'are, J and Mshila, J. An appellate court cannot interfere with those orders except on appeal, and equity will not grant orders that would be in vain or unenforceable. Mootness negates the entire application.

02

Test for stay of execution and injunction pending appeal under Rule 5(2)(b)

Holding

Applicant must establish an arguable appeal and that refusal would render the appeal nugatory

Reasoning

Restating the settled Rule 5(2)(b) principles per Stanley Kangethe Kinyanjui v Tony Ketter and Kieni Plains Co. Ltd v Ecobank Kenya Ltd, the court held that a stay or restraining order lies at the court's discretion exercised case by case. The first limb (arguability) was satisfied, but the nugatory limb failed because the orders sought would be academic.

p. 4

Legal principles established

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  • To merit stay or injunction under Rule 5(2)(b), an applicant must show an arguable appeal and that the appeal would be rendered nugatory if the orders are not granted
  • An application that has become moot fails in its entirety, including on the nugatory-ingredient limb

Court orders

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  1. 1.Application dismissed in toto
  2. 2.Costs to the 6th, 7th, 8th and 10th respondents
On appeal from
High Court of Kenya (Commercial & Admiralty Division)
HCCOMM No. E484 of 2022 [consolidated with HCC E454 of 2022 & HCC E469 of 2022]
Jurisdiction invoked
Sections 3A and 3B of the Appellate Jurisdiction Act and 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, "Avistia Sro Limited v Maina Stephen Njenga & 8 others", Case Analysis (2024). Not stated in extract (Court of Appeal, Nairobi). Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2024/1210/eng@2024-09-20

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