Dhanjal Investments Ltd v Shabaha Investment Ltd (Civil Application E049 of 2025) [2026] KECA 627 (KLR)
The bottom line
#The Court of Appeal in Mombasa refused to halt execution against a company's land, confirming that directors' inheritance disputes cannot block enforcement against company property.
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 appeal is arguable
- 2.Whether, unless stay and injunctive orders are granted, the intended appeal will be rendered nugatory
Key legal issues
#Whether the intended appeal is arguable
The Court was not persuaded that any arguable issue was raised; the separate corporate personality point is settled and the exhaustion argument is misplaced.
The draft memorandum alleged the trial judge failed to apply the doctrine of exhaustion because of pending succession causes concerning deceased directors. The Court held these grounds disclose no clear legal or factual error: a company is separate from its directors' estates, and execution from a final judgment does not depend on unrelated processes. The decree was issued in 2019, affirmed on appeal in 2022, and a Supreme Court petition was struck out, leaving a valid enforceable decree.
Whether the appeal would be rendered nugatory absent stay
No nugatory aspect was established: the operative order is prohibitory and preserves the property pending computation; possible future sale with remedies does not render the appeal nugatory.
The High Court declined to authorize immediate sale and directed filing of a proper computation under Order 22 rule 7 before further execution steps. Preservation maintains the status quo and secures the property. Mere apprehension of eventual sale is insufficient; lawful sale with a successful later appeal attracts legal remedies such as restitution.
Legal principles established
#- An applicant under rule 5(2)(b) must demonstrate both that the intended appeal is arguable and that it will be rendered nugatory unless the orders sought are granted; failing either limb is fatal.
- Arguability must be shown by pointing to a clear legal or factual error, not by general dissatisfaction with the decision; an arguable appeal need only raise a single bona fide issue.
- Disputes relating to the estates of a company's deceased directors cannot prevent execution against property registered in the name of the company, the company being a separate legal entity.
- A mere preservation order (prohibitory order) pending computation of a decretal amount cannot render an intended appeal nugatory, and a sale in due course of law has remedies if the appeal later succeeds.
Court orders
#- 1.The notice of motion dated 17th June 2025 is dismissed
- 2.Costs of the application awarded to the respondent
The bench
#One judgment of the whole court — no separate or dissenting opinions.
Wrote the judgment
- On appeal from
- High Court of Kenya at Mombasa
- Mombasa Civil Suit No. 38 of 1997, Shabaha Investments Limited v. Dhanjal Investments Limited
- Jurisdiction invoked
- Rules of this Court, rules 5(2)(b), 44(1) and 49(1) (Court of Appeal Rules) - application for injunction and stay pending intended appeal
Relief refused
#Injunction restraining the respondent from dealing with L.R. No. 1549/Section I Mainland North, Mombasa pending the intended appeal
The applicant failed both limbs of the rule 5(2)(b) test - the appeal is not arguable and would not be rendered nugatory, as the order in force is merely prohibitory and preserves the property
Stay of further proceedings and consequential orders in Mombasa Civil Suit No. 38 of 1997 pending the intended appeal
Halting execution of a long-unsatisfied decree without strong justification would unfairly deny the decree holder the benefit of a valid judgment
Costs
Application dismissed with costs to the 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.
in applications of this nature, the applicant must demonstrate, first, that the intended appeal is arguable, and secondly, that unless the orders sought are granted, the appeal will be rendered nugatory
However, arguability must be shown by pointing to a clear legal or factual error in the impugned ruling and not simply by expressing general dissatisfaction with the trial court's decision.
the High Court properly applied the well-established principle that a company is a separate legal entity and, therefore, disputes relating to the estates of deceased directors cannot prevent execution against property registered in the name of the company
Accordingly, the notice of motion dated 17th June 2025 is hereby dismissed with costs to the respondent.
Issues in the judgment
#The ruling under challenge is dated 22nd May 2025, yet the notice of appeal recording the intention to appeal that ruling is also dated 22nd May 2025; the judgment does not explain whether the notice was filed the same day or whether leave/time issues arise.
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Dhanjal Investments Ltd v Shabaha Investment Ltd (Civil Application E049 of 2025) [2026] KECA 627 (KLR)", Case Analysis (2026). Civil Application No. E014 of 2025 (intended appeal from Mombasa Civil Suit No. 38 of 1997). Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2026/627/eng@2026-03-25
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.