Equip Agencies Ltd & 4 others v I&M Bank Ltd & another (Civil Appeal (Application) E361 of 2022) [2026] KECA 1526 (KLR)
The bottom line
#Kenya's Court of Appeal allowed I&M Bank to proceed against four properties, holding compensation would cover the borrowers if their appeal succeeds.
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' intended appeal against the High Court ruling of 3rd June 2022 dismissing their interlocutory injunction is arguable (first limb of rule 5(2)(b)).
- 2.Whether, if the injunction is not granted, the success of the intended appeal would be rendered nugatory (second limb of rule 5(2)(b)).
Key legal issues
#Whether the intended appeal is arguable (first limb of rule 5(2)(b)).
Yes. The applicants' contest of the debt figure asserted by the bank — repayment exceeding Kshs 1 billion against facilities of Kshs 450 million, the unlawful consolidation of facilities, and the in duplum rule under the Banking Act — constituted an arguable point.
The court reiterated that the arguability threshold under rule 5(2)(b) is low and that even a single point meriting inquiry suffices. The applicants disputed the indebtedness claimed by the 1st respondent, contending the facilities had been repaid with over Kshs 1 billion, that consolidating them was unilateral and illegal, and that the in duplum rule capped the debt. Without saying more lest it prejudice the bench that would eventually hear the appeal, the court held that this contest over the debt figure was an arguable point, satisfying the first requirement.
Whether the intended appeal would be rendered nugatory if the injunction is not granted (second limb of rule 5(2)(b)).
No. The value of the suit properties is known, the 1st respondent is a reputable commercial bank able to pay damages, and damages would adequately compensate the applicants; the second limb failed.
Guided by Stanley Kang’ethe Kinyanjui, the court held that 'nugatory' turns on whether what is sought to be stayed is irreversible or incapable of being recompensed by damages. The respondents' unrebutted affidavit established that the value of the suit properties was known and that the bank, a reputable commercial institution, could pay any damages; the court also accepted the plausible argument that continued delay could let the debt outstrip the securities. Since damages would adequately compensate the applicants, the second limb failed and the injunction could not issue.
The governing principles for an application under rule 5(2)(b) of the Court of Appeal Rules.
The twin limbs — an arguable appeal and nugatory-ness — are conjunctive and both must be satisfied; the applicants satisfied one and failed the other, so the application was declined in its entirety.
The court framed rule 5(2)(b) as requiring both an arguable appeal and that its success not be rendered nugatory, the two limbs being conjunctive. Relying on its own earlier decisions in Ishmael Kagunyi Thande and Republic v Kenya Anti-Corruption Commission, it stressed that demonstrating only one limb avails an applicant nothing if the other is not demonstrated. Here the applicants passed the arguability test but failed the nugatory test, so the application was declined with costs to the respondents.
Legal principles established
#- An applicant under rule 5(2)(b) must demonstrate both limbs — an arguable appeal and that its success would be rendered nugatory — since demonstrating only one limb avails nothing.
- The arguability threshold under rule 5(2)(b) is low; a single point meriting inquiry by the Court suffices.
- An appeal is rendered nugatory where what is sought to be stayed would be irreversible or incapable of being recompensed by an award of damages.
- Where the value of the charged property is known and the respondent is a reputable commercial bank able to pay damages, the failure to grant an injunction pending appeal does not render a successful appeal nugatory.
Court orders
#- 1.The applicants' notice of motion dated 17th June 2022 is declined.
- 2.Costs of the application are awarded to the respondents.
The bench
#One judgment of the whole court — no separate or dissenting opinions.
- On appeal from
- High Court
- High Court Civil Suit No E943 of 2022
- Jurisdiction invoked
- Rule 5(2)(b) of the Court of Appeal Rules (injunction/stay pending appeal)
Relief refused
#Temporary injunction pending appeal restraining the respondents from evicting the applicants, advertising for sale, selling, disposing of or interfering with the parcels Mainland North/VI/3075, L.R No 209/4535, L.R No 214/172 and L.R No 209/8755.
Although the appeal was found arguable, the applicants failed the second (nugatory) limb: the value of the suit properties is known, the 1st respondent is a reputable commercial bank able to pay damages, and damages would adequately compensate the applicants if the appeal succeeded.
Costs
The application dated 17th June 2022 was declined with costs to the respondents.
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.
For the foregoing reasons, the application dated 17th June 2022, is declined with costs to the respondents.
It is now well established that for an applicant proceeding under rule 5(2)(b) to succeed, they must satisfy the twin limbs of the rule. The two limbs are conjunctive, meaning that both must be satisfied.
For an applicant to succeed, he must not only show his appeal or intended appeal is arguable, but also that unless the Court grants him an injunction or stay as the case may be, the success of the appeal will be rendered nugatory.
whether or not an appeal will be rendered nugatory depends on whether or not what is sought to be stayed would be either irreversible or incapable of being recompensed by an award of damages.
Without saying more lest we prejudice the bench that will eventually hear the appeal, we find that the first requirement has therefore been satisfied.
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Equip Agencies Ltd & 4 others v I&M Bank Ltd & another (Civil Appeal (Application) E361 of 2022) [2026] KECA 1526 (KLR)", Case Analysis (2026). Not stated in the ruling (notice of motion dated 17th June 2022). Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2026/1526/eng@2026-07-31
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.