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Court of AppealAllowedCivil Application No. E042 of 2022 (as drawn from the judgment; application dated 28th October 2024 under Rule 5(2)(b))

Mugambi v Galaxy Merchants Limited (Civil Appeal (Application) E071 of 2024) [2025] KECA 1007 (KLR)

Court of Appeal of Kenya
2 May 2025
1,978 words in judgment
View original judgmentRead on Kenya Law Watch case
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·~8 min to read original · ~4 min brief

The bottom line

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Kenya's Court of Appeal halted further civil jail time for a debtor, ruling that imprisonment cannot be undone if an appeal later succeeds.

What this practically means

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Executive summary

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This is a single application under Rule 5(2)(b) of the Court of Appeal Rules, 2022, decided by a unanimous bench of Jamila Mohammed, J. Lesiit and Ali-Aroni, JJA, at Nyeri on 2nd May 2025. The applicant, Kenneth Mutembei Mugambi, sought stay of execution of the judgment of Hon. Edward M. Murithi, J. in HCCA No. E042 of 2022 and of proceedings in HCCA No. 20 of 2017, pending appeal. He had already served a six-month civil jail term on a money decree of approximately Kshs.4.5 million arising from CMCC No. 40 of 2014, and faced a further prospective commitment. The respondent opposed, arguing res judicata (a similar application in HCCA No. E029 of 2024 having been dismissed), that the judgment appealed from was a negative order with nothing to stay, and that a money decree could not be rendered nugatory. The court held that res judicata did not apply because the earlier application was dismissed on a technicality, not on the merits; that the propriety of the appeal could not be challenged in a replying affidavit; and that the applicant had arguable issues, including whether a person can be jailed twice for the same debt and whether a No Asset Procedure discharged the debt. Incarceration being irreversible and uncompensable by damages, the nugatory limb was satisfied. The application was allowed as prayed, with costs to abide the outcome of the appeal. This is an interlocutory decision; the decision below was not disturbed.

Questions the Court framed

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

  1. 1.Whether the application is res judicata by virtue of a prior dismissed application in HCCA No. E029 of 2024
  2. 2.Whether the applicant has an arguable appeal under the twin principles for stay under Rule 5(2)(b)
  3. 3.Whether the appeal, if successful, would be rendered nugatory if stay is not granted
  4. 4.Whether a person already committed to civil jail for six months for a debt can be committed for a further term
  5. 5.Whether a challenge to the propriety of an appeal (spanning two High Court judgments) can be raised in a replying affidavit or submissions

Key legal issues

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01

Whether the prior dismissal of a stay application in HCCA No. E029 of 2024 rendered this application res judicata

Holding

No; res judicata under section 7 of the Civil Procedure Act does not apply where the earlier application was dismissed on a technicality rather than on the merits.

Reasoning

The earlier application was dismissed because the applicant had applied for stay of the trial court's judgment as opposed to stay of the High Court matter. Since it was not determined on merit, section 7 of the Civil Procedure Act is inapplicable, following the IEBC v Maina Kiai decision. The fact that both matters arise from the same debt did not alter this conclusion.

p. 3
02

Whether the applicant demonstrated an arguable appeal

Holding

Yes. The court identified arguable issues: whether one can be committed to civil jail a second time for the same debt, whether the debt was discharged upon a No Asset Procedure declaration under the Insolvency Act, and whether the credit purchase was fraudulent.

Reasoning

Guided by Somak Travels Ltd v Gladys Aganyo, only one arguable point is needed. The court found the questions of repeat incarceration for the same debt, discharge of debt under a No Asset Procedure, interpretation of section 360(2) of the Insolvency Act, and alleged fraud through bounced cheques all meriting full argument. An arguable appeal need not succeed, only be non-frivolous.

p. 3
03

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

Holding

Yes, because the applicant faces a likely second civil jail commitment, and incarceration cannot be compensated by damages, repayment or reversal.

Reasoning

Applying the nugatory test from Stanley Kang'ethe Kinyanjui v Tonny Keter, the court noted that what is sought to be stayed must be reversible or compensable by damages. Incarceration in civil jail is neither. The applicant had already served six months and faced a further six-month commitment, so the nugatory limb was satisfied notwithstanding that the decree was a money decree.

p. 4

Legal principles established

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  • To merit an order of stay under Rule 5(2)(b), an applicant must satisfy the twin principles of an arguable appeal and that the appeal would be rendered nugatory if stay is declined.
  • An application under Rule 5(2)(b) is not an appeal; it is an interlocutory application distinct from a substantive appeal.
  • A challenge to the propriety of an appeal cannot be raised in a replying affidavit or submissions; it must be raised by a formal application.
  • Section 7 of the Civil Procedure Act (res judicata) does not apply where a prior application was dismissed on a technicality and not determined on merit.
  • One arguable point is sufficient to satisfy the first principle; an arguable point need not succeed on appeal.
  • Incarceration in civil jail cannot be compensated by an award of damages, repaid or reversed, and therefore renders an appeal nugatory if stay is refused.

Court orders

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  1. 1.Stay of execution in High Court Civil Case No. 20 of 2017 and of the judgment of Hon. Edward M. Murithi, J. at Meru delivered on 29th February 2024 in HCCA No. E042 of 2022, pending determination of the appeal
  2. 2.Costs of the application to abide the outcome of the appeal

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 at Meru
HCCA No. E042 of 2022
Jurisdiction invoked
Rule 5(2)(b) of the Court of Appeal Rules, 2022

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.

The result is that the application is merited. The application dated 28th October 2024 is allowed as prayed. The costs to abide the outcome of the appeal.
p. 4Final orders - stay granted with costs abiding the appeal
We continue to emphasize that to merit an order of stay, an applicant must satisfy the Court that first, he has an arguable appeal, which means one that raises a bona fide point worthy of consideration, though it must not necessarily succeed
p. 2Twin principles for stay under Rule 5(2)(b)
It is trite law that the applicant need not show a multiplicity of arguable points. One arguable point is suficient to satisfy the first principle.
p. 3Standard for arguability
It is our view that incarceration of the applicant cannot be compensated by an award of damages, repaid or reversed if the order for stay is not granted and the appeal succeeds
p. 4Nugatory principle - civil jail incarceration
we are satisfied that as the application was not determined on merit, section 7 of the Civil Procedure Act does not apply.
p. 3Res judicata where prior dismissal was on a technicality

Issues in the judgment

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minor

The judgment inconsistently refers to the trial court case number: paragraph 6 says 'CMCC No. 40 of 2019' while paragraphs 1 and 10 refer to 'CMCC 40 of 2014' / 'CMCC No. 40 of 2014'.

minor

The case number field is ambiguous: the application dated 28th October 2024 relates to an appeal from HCCA No. E042 of 2022, yet no distinct appeal number for the application before the Court of Appeal is stated in the judgment.

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, "Mugambi v Galaxy Merchants Limited (Civil Appeal (Application) E071 of 2024) [2025] KECA 1007 (KLR)", Case Analysis (2025). Civil Application No. E042 of 2022 (as drawn from the judgment; application dated 28th October 2024 under Rule 5(2)(b)). Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2025/1007/eng@2025-05-02

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