Home Afrika Limited v I&m Bank Limited & 1 other
The bottom line
#Kenya's Court of Appeal refused to stop I&M Bank from selling a guarantor's property, holding that merely disputing the debt amount is not enough.
What this practically means
#Executive summary
#Key legal issues
#Whether the intended appeal is arguable
The appeal is arguable because the record discloses a genuine dispute whether the principal borrower's debt to the 1st respondent had been settled, which raises matters for closer scrutiny at the hearing of the appeal.
The court observed that both the applicant and the 2nd respondent dispute the indebtedness said to have been admitted in the High Court. Where indebtedness is disputed, the sale of the guarantor's property is a matter calling for scrutiny. These are not frivolous issues; hence the first limb of the rule 5(2)(b) test was satisfied.
Whether the intended appeal would be rendered nugatory if the injunction is not granted
The refusal of the injunction would not render the appeal nugatory: the suit property had already been sold on 16th April, 2026, the applicant can be compensated by the 1st respondent in damages, and the applicant voluntarily offered its property as security with knowledge of the risk.
The court noted the property had been sold and the injunctive relief was overtaken by events and moot; the 1st respondent is a reputable bank able to compensate the applicant; and the applicant, having charged its property as a guarantor, understood the risk of sale. Job-loss and shareholder-value arguments were found unconvincing. The second limb therefore failed.
Effect of a dispute over the amount outstanding on an application to restrain statutory power of sale
A dispute as to the amount outstanding cannot, by itself, justify an injunction preventing a mortgagee or chargee from exercising its statutory power of sale where there is default.
The court, citing Mrao Ltd vs First American Bank of Kenya, held that the applicant's sole thrust - disputing the amount owed - was insufficient legal basis for the court to exercise its discretion in the applicant's favour, absent any other reason.
Legal principles established
#- An applicant under rule 5(2)(b) must satisfy both limbs - arguability of the appeal and the nugatory aspect - before the court can grant a stay or injunction pending appeal.
- A mere dispute as to the amount outstanding is not a sufficient legal basis to restrain a chargee from exercising its statutory power of sale where there is default.
- An arguable appeal is not one that will necessarily succeed, but one which raises issues for consideration by the court.
- Once property is offered as security for a loan, it assumes a merchantable quality shorn of sentimental value and is liable to be sold upon default in repayment.
Court orders
#- 1.The application dated 2nd April, 2026 is dismissed
- 2.Costs of the application awarded to the 1st respondent
- On appeal from
- High Court of Kenya
- Nairobi High Court Civil Case No. E603 of 2025 - Mitini Scapes Development Limited vs I & M Bank Ltd (injunction application therein)
- Jurisdiction invoked
- Rule 5(2)(b) of the Court of Appeal Rules, 2022 (original and discretionary jurisdiction to grant stay or injunction pending appeal)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Home Afrika Limited v I&m Bank Limited & 1 other", Case Analysis (2026). Notice of motion dated 2nd April, 2026 (Court of Appeal application under rule 5(2)(b)). Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2026/1030/eng@2026-05-29
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.