Commissioner of Domestic Taxes v Hapag-LLoyd Kenya Ltd (Civil Application E623 of 2025) [2026] KECA 1277 (KLR)
The bottom line
#Kenya's Court of Appeal paused a High Court order requiring KRA to refund Hapag-Lloyd over Kshs 6 million in VAT until its appeal is heard.
What this practically means
#Executive summary
#Questions the Court framed
#The issues the Court set itself to decide, in its own words.
- 1.Whether a single application for stay is competent where three income tax appeals were heard together but not formally consolidated
- 2.Whether the intended appeal is arguable
- 3.Whether the appeal would be rendered nugatory if stay is not granted
Key legal issues
#Competence of a single stay application covering three appeals heard together but not consolidated
The application was competent because the High Court rendered one judgment disposing of the three matters.
Although no formal consolidation order was made, the three appeals involved the same parties and issues, were heard together and were disposed of in one judgment and decree in the spirit of efficient use of judicial resources. The court declined to require three separate stay applications, holding that one judgment suffices for one application.
Whether the intended appeal is arguable under Rule 5(2)(b)
The question whether an agent of a foreign principal not registered for VAT that incurs input VAT is entitled to VAT refunds under Sections 17 and 13 of the VAT Act is arguable.
The applicant contended the High Court misapprehended Sections 17 and 13(5) of the VAT Act on input VAT claims and that the respondent is an agent of a non-resident entity not registered for VAT. The court found this a pertinent and serious question of law, noting that one arguable point is sufficient.
Whether the appeal would be rendered nugatory if stay is not granted
The nugatory prong was satisfied because the respondent did not demonstrate its ability to refund the decretal amount should the appeal succeed.
The applicant asserted the respondent could not make good the refunds if the appeal succeeded. The court held this shifted the burden to the respondent, which offered only that its principal was a reputable, long-standing international shipping company without demonstrating financial ability to refund. That failure established the nugatory factor.
Legal principles established
#- Where matters involving the same parties and issues are heard together and disposed of by one judgment, a single application for stay in respect of that judgment is competent even absent a formal consolidation order.
- Where a party asserting that the decretal amount would be irrecoverable has discharged its evidential burden of raising the issue, the respondent must demonstrate its financial ability to refund.
Court orders
#- 1.Execution of the judgment of the High Court delivered on 26th September 2025 is stayed pending the hearing and determination of the applicant's appeal
- 2.Costs of the application shall abide by the outcome of the appeal
The bench
#One judgment of the whole court — no separate or dissenting opinions.
- On appeal from
- High Court at Nairobi
- Income Tax Appeal Nos. E009 of 2025, E230 of 2024 and E231 of 2024
- Jurisdiction invoked
- Sections 3A and 3B of the Appellate Jurisdiction Act and Rule 5(2)(b) of the Court of Appeal Rules
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.
Consequently, we allow the application dated 27th October 2025 in terms of prayer 3 and hereby order that execution of the judgment of the High Court delivered on 26th September 2025 is hereby stayed pending the hearing and determination of the applicant’s appeal.
One arguable point is suficient.
The applicant having asserted that the respondent would not be able to refund the decretal amount, it was incumbent upon the respondent to demonstrate that it can do so.
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Commissioner of Domestic Taxes v Hapag-LLoyd Kenya Ltd (Civil Application E623 of 2025) [2026] KECA 1277 (KLR)", Case Analysis (2026). Notice of Motion dated 27th October 2025 (in Income Tax Appeal Nos. E009 of 2025, E230 of 2024 and E231 of 2024). Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2026/1277/eng@2026-07-03
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.