SBM Bank Kenya Limited v D Union De Banques Arabes Et Francaises – UBA & 2 others (Civil Application E443 of 2024 & Civil Appeal (Application) E653 of 2024 (Consolidated)) [2025] KECA 70 (KLR)
The bottom line
#Kenya's Court of Appeal has paused enforcement of a KSh judgment against Chase Bank, KDIC and SBM Bank until their appeal over a USD 5 million trust claim is heard.
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 intended appeals are arguable under rule 5(2)(b) of the Court of Appeal Rules
- 2.Whether the intended appeals would be rendered nugatory absent a stay of execution
Key legal issues
#Arguability of the intended appeals
The draft memoranda raised serious questions of law, notably whether doctrines of equity can override sections 3(1) of the Judicature Act and 3 of the Kenya Deposit Insurance Act, and whether a Quistclose Trust was created under the Trade Credit Agreement and LC.
The Court found the drafted grounds not idle arguments. The central grounds - that the learned Judge elevated the doctrines of equity while disregarding statutory provisions confining their application, and her finding that a Quistclose Trust existed under the LC facility - raised serious questions of law worthy of consideration. Only one such point was needed to satisfy the arguability threshold under rule 5(2)(b).
Whether the appeals would be rendered nugatory absent stay
Because U.B.A.F. is a foreign bank with no assets in Kenya, execution would make recovery of the decretal amount difficult if the appeals succeeded; the nugatory limb was satisfied.
The applicants feared U.B.A.F., a foreign bank with no Kenyan assets, would execute the judgment and that preferential treatment of U.B.A.F. would affect the ongoing liquidation process. The Court accepted that recovery would be difficult should the appeals succeed, holding that the applicants satisfied the twin principles under Rule 5(2)(b) and granting a stay pending the appeals.
Legal principles established
#- To succeed under rule 5(2)(b) an applicant must satisfy the twin principles that the appeal is arguable and that, absent stay, a successful appeal will be rendered nugatory.
- A single arguable point suffices on the arguability limb; the applicant need not establish a multiplicity of grounds or show the ground will succeed.
- Whether an appeal will be rendered nugatory depends on whether what is sought to be stayed is reversible, or if not reversible, whether damages will reasonably compensate the aggrieved party.
Court orders
#- 1.Stay of execution of the judgment and decree of the High Court at Nairobi delivered by Freda Mugambi J on 5th July 2024 in HCCC No. 206 of 2019 granted, pending the hearing and determination of the appeals
- 2.Costs of the applications to abide the outcome of the appeals
The bench
#One judgment of the whole court — no separate or dissenting opinions.
- On appeal from
- High Court at Nairobi
- HCCC 206 of 2019
- Jurisdiction invoked
- Rule 5(2)(b) of the Court of Appeal Rules 2022
- Consolidated with
- Civil Appeal (Application) No. E653 of 2024
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.
To succeed in an application made under rule 5(2) (b) of this Court's Rules, an applicant must satisfy the twin principles namely; that the appeal is arguable, and secondly, that absent stay, the intended appeal if successful, will be rendered nugatory.
In our view, these are not idle arguments and we are therefore satisfied that the intended appeal is arguable.
The applications by SBM Bank, Chase Bank and KDIC are therefore allowed, with the result that a stay of execution of the judgment and decree of the High Court at Nairobi delivered by Freda Mugambi J. on 5th July 2024 in HCCC No. 206 of 2019is hereby granted, pending the hearing and determination of the appeals therefrom.
The costs of the applications shall abide the outcome of the appeals.
Issues in the judgment
#The Court states the trial court ordered 'preservation' of funds by Okwany J in June 2022, but the same passage attributes the observation to an application 'partially allowed' by Okwany J; the deponent's surname is inconsistently spelled (Ahlijidja Romaric / Ahlija Aromaric) within the judgment.
Ground (l) of the applicants' grounds appears in the judgment without its letter prefix, interrupting the numbered sequence between (k) and (m).
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "SBM Bank Kenya Limited v D Union De Banques Arabes Et Francaises – UBA & 2 others (Civil Application E443 of 2024 & Civil Appeal (Application) E653 of 2024 (Consolidated)) [2025] KECA 70 (KLR)", Case Analysis (2025). Civil Application No. E443 of 2024 (consolidated with Civil Appeal (Application) No. E653 of 2024). Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2025/70/eng@2025-01-24
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.