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Court of AppealPartially AllowedNotice of motion dated 10th September 2024 (Court of Appeal application arising from Nyeri High Court Civil Suit No. 8 of 2010)

Gamma Villa Limited v Almasi Bottlers Limited (Civil Application E464 of 2024) [2025] KECA 19 (KLR)

Court of Appeal
17 January 2025
1,003 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 paused a Kshs.56.8 million judgment against a clearing agent, but only if it secures a Kshs.28 million bank guarantee within 45 days.

What this practically means

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Executive summary

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This is a ruling of the Court of Appeal at Nairobi (Musinga, P., Tuiyott and Odunga, JJA) delivered on 17th January 2025 on a notice of motion dated 10th September 2024 seeking stay of execution of a judgment of Muchemi, J delivered on 11th July 2024 in Nyeri High Court Civil Suit No. 8 of 2010. The trial court had entered judgment for the respondent against the applicant, a clearing and forwarding agent, for Kshs.56,871,056 plus interest and costs, comprising Kshs.52,060,606 as tax refund, Kshs.2,443,750 as costs of judicial review proceedings, Kshs.376,700 for tax consultancy and Kshs.2,000,000 for loss of business. The dispute arose from the applicant's alleged wrongful detention of a consignment of concentrates in exercise of a claimed lien. The court applied the settled twin principles from Stanley Kangethe Kinyanjui v Tony Ketter: the intended appeal must be arguable and, if successful, rendered nugatory absent a stay. Holding the appeal arguable and finding that the colossal judgment sum could collapse the applicant's company, the court granted a conditional stay: the applicant to provide a bank guarantee of Kshs.28,000,000 within 45 days, failing which the application stands dismissed and the respondent may execute. The applicant was ordered to bear the costs of the application. The application was thus partially allowed.

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
  2. 2.Whether the appeal, if successful, would be rendered nugatory unless execution of the trial court's judgment is stayed
  3. 3.On what terms, if any, stay of execution should be granted

Key legal issues

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01

Whether the intended appeal is arguable

Holding

The intended appeal was arguable on the face of the Draft Memorandum of Appeal.

Reasoning

The court perused the Draft Memorandum of Appeal and found the intended appeal arguable, but declined to elaborate to avoid embarrassing the bench that would eventually hear the appeal.

p. 2
02

Whether the appeal would be rendered nugatory if stay is not granted

Holding

Although the respondent's ability to refund was not doubted, the colossal judgment sum and the risk that execution would collapse the applicant's company justified a conditional stay.

Reasoning

The court weighed the applicant's risk of financial ruin against the respondent's entitlement to the fruits of judgment. Because the applicant could offer only Kshs.1,000,000 in escrow, the court granted stay conditional on a substantial bank guarantee of Kshs.28,000,000, balancing both interests.

p. 2

Legal principles established

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  • An applicant for stay of execution pending appeal must demonstrate that the appeal or intended appeal is arguable and that, unless the orders sought are granted, the appeal, if successful, will be rendered nugatory.
  • An arguable appeal is not one that must succeed but one raising issues deserving full consideration by the Court.
  • A successful decree-holder is entitled to the fruits of the judgment; where stay is granted, it may properly be made conditional on reasonable security, such as a bank guarantee.

Court orders

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  1. 1.Conditional stay of execution of the trial court's judgment pending appeal
  2. 2.The applicant shall provide a bank guarantee in the sum of Kshs.28,000,000 in favour of the respondent within 45 days from the date of the order
  3. 3.If the applicant fails to provide the guarantee within the stipulated period, the notice of motion dated 10th September 2024 shall stand dismissed and the respondent shall be at liberty to execute the trial court's judgment
  4. 4.The applicant shall bear the costs of the application

The bench

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

majority

Wrote the judgment

majority
majority
On appeal from
High Court of Kenya
Nyeri High Court Civil Suit No. 8 of 2010
Jurisdiction invoked
Appellate jurisdiction of the Court of Appeal to stay execution of a decree pending an intended appeal (notice of appeal filed); application under rules governing stay of execution pending appeal

Relief refused

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Unconditional stay of execution

The court granted only a conditional stay because the applicant, as decree-holder is entitled to fruits of the judgment and the applicant's offer of security was inadequate

p. 2

Costs

The applicant shall bear the costs of the application.

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.

An applicant has to demonstrate that the appeal or intended appeal is arguable, and that unless the orders sought are granted, the appeal, if successful, will be rendered nugatory.
p. 2Principles for stay of execution pending appeal
An arguable appeal is not necessarily one that must succeed, it is one that raises issues that deserve full consideration by the Court.
p. 2Meaning of an arguable appeal
The applicant shall provide a bank guarantee in the sum of Kshs.28,000,000 in favour of the respondent within 45 days from the date hereof.
p. 3Final orders - conditional stay terms
If the applicant fails to provide the guarantee within the stipulated period of time, the applicant's notice of motion dated 10th September 2024 shall stand dismissed, and the respondent shall be at liberty to execute the trial court's judgment.
p. 3Final orders - consequence of non-compliance

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, "Gamma Villa Limited v Almasi Bottlers Limited (Civil Application E464 of 2024) [2025] KECA 19 (KLR)", Case Analysis (2025). Notice of motion dated 10th September 2024 (Court of Appeal application arising from Nyeri High Court Civil Suit No. 8 of 2010). Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2025/19/eng@2025-01-17

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