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Court of AppealDismissedCivil Appeal (Application) E118 of 2024

Pride Inn Hotel & Investments Limited & 3 others v Sai Holdings Limited

Court of Appeal
11 October 2024
1,789 words in judgment
View original judgmentRead on Kenya Law Watch case
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·~7 min to read original · ~4 min brief

The bottom line

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The Court of Appeal refused to pause a Mombasa land case, confirming that failed arbitration sends parties back to court and re-litigating settled issues wastes everyone's money.

What this practically means

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Executive summary

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The applicants, defendants in ELC Suit No. 143 of 2023 before the Environment and Land Court at Mombasa, sought a stay of proceedings pending appeal against a ruling of Matheka, J. dated 24 April 2024 dismissing their preliminary objection. The objection had challenged the trial court's jurisdiction on two grounds: that the respondent's suit was time-barred under section 4(1) of the Limitation of Actions Act, and that the trial court was functus officio under section 7 of the Arbitration Act. The application was brought under sections 3 and 3A of the Appellate Jurisdiction Act and rule 5(2)(b) of the Court of Appeal Rules, 2022. The respondent opposed, contending that the same issues had been determined in Civil Appeal No. E087 of 2022, making the present application res judicata and an abuse of process. Applying the settled twin principles from Trust Bank v Investech Bank - arguability and nugatory-ness, to be satisfied conjunctively - the Court held the intended appeal was not arguable. The amendment-of-pleadings complaint had already been settled by the Court in E087 of 2022, the applicants merely recasting the same grounds as a preliminary objection. On functus officio, both parties agreed the arbitral proceedings had collapsed; the Court held that section 7 of the Arbitration Act empowers interim measures pending arbitration but does not oust the court's jurisdiction once arbitration fails. The nugatory limb therefore fell away. The application was dismissed with costs to the respondent. The decision binds the Environment and Land Court, which may proceed with the suit.

Questions the Court framed

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The issues the Court set itself to decide, in its own words.

  1. 1.Whether the intended appeal is arguable under rule 5(2)(b)
  2. 2.Whether the appeal, if successful, would be rendered nugatory absent a stay of proceedings
  3. 3.Whether the application and appeal are res judicata and an abuse of process given Civil Appeal No. E087 of 2022

Key legal issues

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01

Whether the intended appeal is arguable under rule 5(2)(b)

Holding

The appeal was not arguable; the amendment-of-pleadings issue was settled in Civil Appeal No. E087 of 2022 and the functus officio argument rested on a misapprehension of section 7 of the Arbitration Act.

Reasoning

The Court found the applicants were re-litigating the amendment issue decided in E087 of 2022, merely recast as a preliminary objection. On functus officio, both parties agreed the arbitration collapsed, so parties had no recourse but to revert to court; section 7 only provides for interim measures and does not oust jurisdiction.

02

Whether the appeal would be rendered nugatory absent a stay

Holding

The nugatory limb fell away because the applicants failed the arguability limb; the twin principles must be satisfied conjunctively.

Reasoning

Having found no arguable grounds, the Court held the second limb need not be considered. Failure of the first limb disposes of the application without weighing the parties' conflicting interests.

p. 4
03

Whether the trial court became functus officio under section 7 of the Arbitration Act

Holding

No; section 7 empowers interim measures pending arbitration and does not oust the court's jurisdiction once arbitral proceedings collapse.

Reasoning

Counsel agreed the arbitral proceedings failed, the arbitrator having recused himself for want of jurisdiction. Once arbitration failed, the parties had to revert to court. The applicants' argument was therefore founded on a misapprehension of the law.

p. 3

Legal principles established

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  • An applicant under rule 5(2)(b) must demonstrate both that the appeal or intended appeal is arguable and that it would be rendered nugatory if the orders are not granted; the two limbs are conjunctive.
  • Section 7 of the Arbitration Act empowers a court to issue interim measures pending arbitration but does not oust the court's jurisdiction where arbitral proceedings collapse.
  • A single bona fide issue suffices to show an arguable appeal, which need not necessarily succeed but must not be frivolous.

Court orders

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  1. 1.The application for stay of proceedings pending appeal is dismissed with costs to the respondent

The bench

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One judgment of the whole court — no separate or dissenting opinions.

majority
majority
On appeal from
Environment and Land Court at Mombasa
ELC Suit No. 143 of 2023
Jurisdiction invoked
Sections 3 and 3A of the Appellate Jurisdiction Act and rule 5(2)(b) of the Court of Appeal Rules, 2022

Relief refused

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Stay of proceedings in the trial court pending hearing and determination of the main appeal

The intended appeal was found to have no arguable grounds; the twin rule 5(2)(b) principles must be satisfied conjunctively and the first limb failed

Costs

The application is dismissed with costs to the respondent.

Quotable passages

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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 upshot, we find that the application is devoid of merit and is hereby dismissed with costs to the respondent.
Final orders - dismissal of stay of proceedings application
It is trite that the twin principles under rule 5(2)(b) of this Court's Rules must be satisfied conjunctively.
p. 4Conjunctive satisfaction of rule 5(2)(b) principles
The section does not oust the court's jurisdiction to determine a matter if arbitration proceedings collapse.
p. 3Scope of section 7 of the Arbitration Act
Our conclusion in the circumstances is that the issue of amendment of pleadings was settled by this Court in Civil Appeal No. E087 of 2022
p. 3Res judicata as between successive appeals on the same issue

Issues in the judgment

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minor

Signature block describes D. K. Musinga as 'JUDGE OF APPEAL' while the parenthetical '(P)' suggests President of the Court of Appeal; rank is inconsistently presented.

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, "Pride Inn Hotel & Investments Limited & 3 others v Sai Holdings Limited", Case Analysis (2024). Civil Appeal (Application) E118 of 2024. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2024/1910/eng@2024-10-11

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