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Court of AppealPartially AllowedNot stated in the judgment

Berlin Equipment Ltd & another v Tata Africa Holdings (K) Ltd (Civil Appeal 593 of 2019) [2026] KECA 100 (KLR)

Court of Appeal
30 January 2026
DMD. K. MusingaJNJoel NgugiGOG. V. Odunga
2,126 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~9 min to read original · ~4 min brief

The bottom line

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Kenya's Court of Appeal ruled judges cannot force defendants to deposit the full disputed amount just to be allowed to defend a lawsuit.

What this practically means

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Executive summary

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This was an appeal to the Court of Appeal against part of a High Court ruling (Okwany, J, 21st November 2019, HCCC No. E104 of 2019) which set aside a default judgment entered against the appellants but conditioned that setting aside on the deposit of the entire decretal sum of Kshs. 22,396,115.22 within thirty days, failing which the default judgment would stand reinstated. The respondent raised a preliminary objection that the appeal was incompetent for want of leave under section 75 of the Civil Procedure Act and order 43 of the Civil Procedure Rules, contending the default judgment had been entered in default of defence. The court rejected this, holding that the impugned ruling was an order under order 10 rule 11 and that the right of appeal from such an order cannot be curtailed by implication; no distinction could be drawn between default judgments entered in default of appearance and in default of defence. On the merits, the court applied the settled principles in Shah v Mbogo and the appellate abuse-of-discretion standard in Mbogo v Shah. It found that having determined that the defence and counterclaim raised triable issues, the judge had misdirected herself in imposing a condition that was disproportionate and had the effect of denying the appellants a hearing unless they first secured the entire claimed sum, particularly where a substantial counterclaim was pleaded. The court allowed the appeal, set aside the conditional aspect of the ruling, allowed the appellants' application of 8th July 2019 unconditionally, directed the suit to proceed to hearing on the merits on a priority basis before a judge other than Okwany, J, and ordered that costs of the appeal and the High Court application abide the outcome of 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 leave to appeal was required and, if so, whether its absence deprives this court of jurisdiction
  2. 2.Whether the learned Judge abused her discretion in imposing the condition requiring deposit of the entire decretal sum as a term for setting aside the default judgment

Key legal issues

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01

Whether leave to appeal was required for an appeal against an order made under order 10 rule 11 of the Civil Procedure Rules

Holding

The appeal lay as of right; no leave was required and the preliminary objection on want of leave failed.

Reasoning

The impugned ruling was made on an application anchored under order 10 rule 11. Order 43 rule 1 enumerates orders from which an appeal lies as of right, and includes orders made under order 10 on setting aside default judgment. The court rejected the distinction between default judgments in default of appearance and in default of defence, holding that a right of appeal granted by the rule cannot be curtailed by implication.

p. 3
02

Whether the condition requiring deposit of the entire decretal sum as a term for setting aside the default judgment was a judicious exercise of discretion

Holding

It was not; the condition was disproportionate, insufficiently connected to expedition, and effectively denied the appellants a hearing, amounting to an abuse of discretion warranting appellate interference.

Reasoning

Having found triable issues, the court had restored the matter to a contested posture requiring proof at trial; compelling deposit of the full claim before liability was determined sat uneasily with that finding. Expedition could be achieved through case-management tools. The substantial counterclaim showed the dispute was not straightforward debt recovery, and the condition tilted the playing field and undermined equality of arms.

p. 4

Legal principles established

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  • Where order 10 rule 11 grants a right of appeal as of right from an order under that rule, that right cannot be curtailed by implication; no distinction may be drawn between default judgments entered in default of appearance and in default of defence for purposes of the right of appeal.
  • Once a court finds that a defence raises triable issues warranting setting aside of a default judgment, terms imposed must be just, proportionate and rationally connected to a legitimate objective; a condition compelling deposit of the entire disputed decretal sum as a precondition to defending the suit is an abuse of discretion.
  • An onerous condition that is difficult or impossible to meet within the stipulated time effectively amounts to a denial of the opportunity to be heard; terms under order 10 rule 11 must regulate the process, not foreclose it.
  • An appellate court interferes with a trial judge's exercise of discretion only where the judge misdirected himself in law, misapprehended the facts, took into account irrelevant considerations, failed to take into account relevant considerations, or where the decision is plainly wrong.

Court orders

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  1. 1.The appeal is allowed and the part of the High Court ruling of 21st November 2019 requiring deposit of Kshs. 22,396,115.22 as a condition for setting aside the default judgment is set aside
  2. 2.The appellants' application dated 8th July 2019 is allowed unconditionally to the extent that the default judgment entered on 17th June 2019 is set aside
  3. 3.The defence and counterclaim filed on 21st June 2019 shall stand as duly filed
  4. 4.The suit shall proceed to hearing on the merits before the High Court on a priority basis before a judge other than Okwany, J
  5. 5.The costs of the appeal and of the application in the High Court shall abide the outcome of the suit

The bench

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

DM
majority
JN
majority
GO
majority
On appeal from
High Court
HCCC No. E104 of 2019
Jurisdiction invoked
Section 75 of the Civil Procedure Act and Order 43 rule 1 of the Civil Procedure Rules (appeal as of right from an order under Order 10 rule 11)

Relief refused

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Immediate costs of the appeal and of the High Court application

Costs were deferred to abide the outcome of the suit

p. 4

Costs

The costs of this appeal as well as the costs of the application in the High Court shall abide the outcome of the suit.

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.

We, therefore, hold that the appeal lay as of right and that this court’s jurisdiction was properly invoked. The preliminary objection on want of leave accordingly fails.
p. 3Jurisdiction - appeal as of right from order 10 rule 11
requiring the appellants to deposit the entire decretal sum as a precondition to defending the suit had the practical efiect of compelling them to secure the full claim before liability was determined.
p. 3Conditions for setting aside default judgment
Moreover, a condition that is so onerous as to be dificult or impossible to meet within the stipulated time efiectively amounts to a denial of the opportunity to be heard. Terms imposed under order 10 rule 11 must regulate the process, not foreclose it.
p. 4Fair hearing and proportionality of conditions
Accordingly, the appeal succeeds. We allow the appeal and set aside that part of the ruling of the High Court delivered on 21st November, 2019 requiring the appellants to deposit Kshs. 22,396,115.22 as a condition for setting aside the default judgment.
p. 4Final orders - disposition
The costs of this appeal as well as the costs of the application in the High Court shall abide the outcome of the suit.
p. 4Costs order

Issues in the judgment

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minor

The coram appears only as the judge names and the delivery date; the judge titles and the second judge's name are rendered unclearly in the signature block ('JOEL NGUGI' appears as 'JOEL NGUGI' but the text is garbled in places), and no case title or appeal number for this appeal is stated anywhere in the judgment.

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (5)

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Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.

Cite this brief

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Cite this brief

Caselaw, "Berlin Equipment Ltd & another v Tata Africa Holdings (K) Ltd (Civil Appeal 593 of 2019) [2026] KECA 100 (KLR)", Case Analysis (2026). Not stated in the judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2026/100/eng@2026-01-30

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