Kiu Construction Limited & 2 Others v Credit Bank PLC & Another
The bottom line
#Kenya's Court of Appeal refused to stop Credit Bank from selling Kiu Construction's land and vehicles, because the appeal wasn't convincing and money damages could compensate any loss.
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 applicants had demonstrated an arguable appeal under rule 5(2)(b) of the Court of Appeal Rules
- 2.Whether, unless the injunction sought was granted, the intended appeal would be rendered nugatory
Key legal issues
#Arguability of the intended appeal under rule 5(2)(b)
The Court was not satisfied that the applicants had an arguable appeal; their contention that they never defaulted was contradicted by their own undisputed pending offer made during negotiations.
The Court examined the Draft Memorandum of Appeal, in which the applicants contended they were servicing the loan and had not defaulted. At plenary hearing, however, it emerged that the parties had been negotiating and the applicants had given an offer they were yet to settle, a fact they did not dispute. The Court cautioned itself against making definitive findings to avoid embarrassing the bench seized of the main appeal, but concluded that arguability had not been demonstrated.
Nugatory aspect of the rule 5(2)(b) test
Even on the nugatory limb, the applicants failed; the 1st respondent being a reputable financial institution would pay damages if the appeal succeeded.
The Court noted that in any event, the first respondent was a reputable financial institution that would pay the applicants damages in the event their intended appeal succeeded. Loss of the charged properties and motor vehicles therefore did not render the appeal irreversible or non-compensable, and the applicants had failed on both limbs, dooming the motion.
Legal principles established
#- An applicant under rule 5(2)(b) must satisfy the Court on both the arguability and nugatory limbs; failure on one limb is fatal to the application.
- An arguable appeal under rule 5(2)(b) need not necessarily succeed; it suffices that it is not frivolous or idle.
- Where the respondent is a reputable financial institution capable of paying damages, the nugatory limb will generally not be satisfied.
Court orders
#- 1.The applicants' motion dated 2nd July 2024 was dismissed
- 2.Costs of the application awarded to the respondents
The bench
#One judgment of the whole court — no separate or dissenting opinions.
- On appeal from
- High Court of Kenya at Nairobi (Milimani)
- HCCOMM No. E397 of 2023 - Kiu Construction Limited & 2 Others v Credit Bank PLC & Another
- Jurisdiction invoked
- Rule 5(2)(b) of the Court of Appeal Rules, 2010
Relief refused
#Temporary injunction restraining the respondents from selling, offering for sale, advertising or dealing with the suit properties (Title No. Ruiru/Kiu Block 3/2680 and Title No. Nairobi/Block 126/574 & 576) and ten motor vehicles pending the hearing and determination of the appeal
The applicants failed to satisfy the Court on both limbs of the rule 5(2)(b) test - the appeal was not arguable and the intended appeal would not be rendered nugatory since the 1st respondent is a reputable financial institution able to pay damages
Costs
Costs of the application awarded to the respondents ('dismissed with costs to the respondents')
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.
Firstly, an applicant has to satisfy that he/she has an arguable appeal. However, this is not to say that it must be an appeal that will necessarily succeed, but sufice to state that it is an appeal that is not frivolous and/or idle.
An applicant has to satisfy the Court on both limbs.
Ultimately therefore and the applicants having failed to satisfy us on both limbs under rule 5 (2) (b) of this Court's Rules to grant an order of injunction, the applicant's motion dated 2nd July 2024, is without merit and the same is hereby dismissed with costs to the respondents.
we are alive to the fact the 1st respondent is a reputable financial institution and would pay the applicants damages in the event that their intended appeal was to be successful.
Issues in the judgment
#The coram prints the first judge's name as 'F. SICHALE'; this may be a typographical rendering in the copy of the judgment.
The judgment contains typographical errors in quoted text (e.g. 'sufier' for 'suffer', 'ofier' for 'offer', 'trifiing' for 'trifling'), reproduced here character-for-character.
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Kiu Construction Limited & 2 Others v Credit Bank PLC & Another", Case Analysis (2024). Court of Appeal Application by Notice of Motion dated 2nd July 2024 (arising from Milimani HCCOMM No. E397 of 2023). Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2024/1594/eng@2024-11-08
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.