Okello & 2 others v Fin Tea Limited & another (Civil Appeal (Application) E053 of 2024) [2025] KECA 1099 (KLR)
The bottom line
#The Court of Appeal refused to stop Citi Bank from enforcing its charge over a Mombasa property because the borrowers could not prove the bank couldn't repay them if they later won.
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' appeal is arguable
- 2.Whether the appeal will be rendered nugatory if the injunction pending appeal is not granted
Key legal issues
#Whether the applicants' appeal is arguable under rule 5(2)(b)
The appeal was arguable: the question whether the charge related to the original amount and whether money was actually advanced are worthy grounds of consideration.
The court reviewed the intended grounds of appeal, including alleged misapplication of sections 35 of the Limitation of Actions Act and 44A of the Banking Act, and the contention that the USD300,000 facility was never advanced. It found these grounds not frivolous and therefore arguable, while noting that their ultimate success was for the bench hearing the appeal.
Whether the appeal would be rendered nugatory if the injunction is not granted
No. The decree is monetary; the 1st respondent is a reputable bank capable of paying damages, and any improper sale is compensable in damages under section 99(4) of the Land Act.
Applying the money-decree jurisprudence, the court noted the applicants bore the burden of showing the respondent could not repay the decreed sums. That averment was unrebutted. Further, a chargor's remedy for an improper exercise of the power of sale lies in damages, so a sale of the suit property would not render the appeal nugatory; an injunction would instead disadvantage the bank, whose loan has been non-performing since 2018.
Legal principles established
#- An applicant for an injunction or stay pending appeal under rule 5(2)(b) must satisfy both the arguability and nugatory limbs; demonstrating only one is insufficient.
- An arguable appeal is one that is not frivolous and is worthy of consideration; the applicant need not show an overwhelming probability of success.
- A money decree generally will not render an appeal nugatory where the respondent is able to repay the decretal amount on success of the appeal, subject to hardship considerations.
- Where property is offered as security for a bank facility, the remedy for an unauthorised, improper or irregular exercise of the chargee's statutory power of sale lies in damages, and a bank able to pay damages should not be restrained from exercising that power even where the debt is contested.
Court orders
#- 1.The Notice of Motion dated 13th December 2024 is dismissed
- 2.Costs of the application awarded to the 1st respondent
The bench
#One judgment of the whole court — no separate or dissenting opinions.
- On appeal from
- High Court of Kenya at Mombasa
- Jurisdiction invoked
- Rule 5(2)(b) of the Court of Appeal Rules, 2022 and sections 3A and 3B of the Appellate Jurisdiction Act, Cap 9
Relief refused
#Temporary injunction restraining the 1st respondent from enforcing the Legal Charge dated 20th November 1998 over Plot No. 1191, Section I, Mainland North Mombasa pending appeal
The applicants failed to satisfy the two-prong test of an arguable appeal and renderment of the appeal nugatory; the 1st respondent is a reputable bank capable of paying damages if the appeal succeeds
Costs
The Notice of Motion dated 13th December 2024 is dismissed with costs to the 1st respondent.
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.
These two limbs must both be demonstrated and it would not be enough that only one is demonstrated.
an applicant need not show that his appeal has an overwhelming probability of success; an applicant just needs to show that there is merit in his appeal
A person prejudiced by an unauthorised, improper or irregular exercise of the power of sale shall have a remedy in damages against the person exercising that power.
Ultimately, we find that the applicants have failed to satisfy the two-prong test for granting injunctive orders under rule 5(2) (b) of the Court of Appeal Rules, 2022. Accordingly, the Notice of Motion dated 13th December 2024 fails and is hereby dismissed with costs to the 1st respondent.
Issues in the judgment
#The judgment records the Notice of Appeal as filed before the Record of Appeal it refers to, but states the Record of Appeal is dated 27th March 2024 while the Notice of Motion is dated 13th December 2024, creating an apparent internal date inconsistency.
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Okello & 2 others v Fin Tea Limited & another (Civil Appeal (Application) E053 of 2024) [2025] KECA 1099 (KLR)", Case Analysis (2025). Civil Application (Injunction Pending Appeal). Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2025/1099/eng@2025-06-20
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.