https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/8557

Alusi Tours and Travell Limited v Kadima (Commercial Appeal E012 of 2024) [2026] KEHC 8557 (KLR) (Commercial & Admiralty) (11 June 2026) (Ruling) Neutral citation: [2026] KEHC 8557 (KLR) Republic of Kenya In the High Court at Nairobi (Milimani Commercial Courts) Commercial and Admiralty Commercial Appeal E012 of 2024 PM Mulwa, J June 11, 2026 Between Alusi Tours and Travell Limited Appellant and Silvia Lukondo Kadima Respondent Ruling 1.This court delivered judgment on 31st July 2025, where the appeal partially succeeded. The award of Kshs. 64,715/= as additional expenses was set aside, and the award of Kshs. 175,000/= as a refund was upheld. 2.The Respondent filed the instant Notice of Motion dated 24th October 2025 seeking the release of Security of Kshs. 239,715/= deposited in court on 15th March 2024. The affidavit of Silvia Lukondo Kadima supports the application. The Appellant opposes on grounds inter alia that the amended decree is irregular, not signed/sealed, erroneously awards interest for a period during which security was deposited in court, and that it would be contrary to public policy to award interest on sums deposited in court. The matter was argued on the basis of written submissions. Analysis and determination 3.The issue for determination are:i.Whether the Respondent is entitled to the release of the security deposited in court andii.Whether interest continued to accrue at the time when the security was deposited in court 4.There is no dispute that upon filing the appeal, the Appellant obtained an order of stay of execution on condition that security in the sum of Kshs. 239,715/= be deposited in court. The said sum was duly deposited on 15th March 2024. Subsequently, judgment was delivered on 31st July 2025 whereby the appeal partially succeeded. The award of Kshs. 64,715/= as additional expenses was set aside while the award of Kshs. 175,000/= as a refund was upheld. 5.The purpose of security pending appeal is that such security is intended to preserve the fruits of the decree for the successful litigant while at the same time safeguarding the interests of the judgment debtor during the pendency of the appeal. 6.The effect of the judgment was that the Respondent remained entitled to the sum of Kshs. 175,000/= together with such interest and costs as may have been lawfully awarded. The stay of execution having been conditional upon the deposit of security, and the appeal having now been determined, the purpose for which the security was deposited has been spent. The Respondent, being the successful party to the extent of the amount upheld by this Court, is prima facie entitled to the benefit of that security. 7.The Appellant has challenged the amended decree on the basis that it is unsigned and unsealed and further contends that it erroneously awards interest during the period when the decretal sum was secured in court. While a decree ought to comply with the requirements of Order 21 Rule 8 of the Civil Procedure Rules, the mere complaint regarding form does not, without more, defeat the Respondent’s entitlement to the portion of the decretal sum upheld by the Court. Any issue regarding the extraction, correction or settlement of the decree is a matter capable of rectification by the Deputy Registrar and cannot operate as a bar to the release of sums lawfully due. 8.On the issue of interest accrual after the deposit was paid in court, the Appellant argues that it would be unjust and contrary to public policy to require payment of interest on sums already deposited in court pursuant to a stay order. 9.Once the decretal amount, or the security representing it, is deposited in court pursuant to a lawful court order, the judgment debtor is deprived of its use and control. Equally, the decree holder cannot access the money pending determination of the appeal. In those circumstances, it would be inequitable to require the judgment debtor to continue paying interest on money that has already been placed beyond its reach and secured by order of the court. 10.The Court of Appeal in Housing Finance Company of Kenya Ltd v Sharok Kher Mohamed Ali Hirji & Another [2015] eKLR observed that the purpose of security pending appeal is to guarantee due performance of the decree and to balance the competing interests of the parties. 11.Interest is compensatory in nature and should not operate as a penalty where a litigant has complied with an order requiring the deposit of security. I am persuaded by the reasoning in National Media Group Ltd v Muya [2025] KEHC 170 (KLR) where the Court held that interest on a decretal sum ceases to accrue upon the judgment debtor depositing the decretal amount in court pursuant to a stay order. The rationale is that the judgment debtor is thereafter deprived of the use and benefit of the funds and cannot be penalized by the continued accrual of interest. I respectfully adopt that reasoning in the present matter. 12.In my view, once the Appellant deposited the security in court on 15th March 2024 in compliance with the stay order, interest ceased to run on the portion of the decretal sum represented by that security. To hold otherwise would amount to penalizing a party for obeying a court order and would confer an unjust enrichment upon the decree holder. 13.Consequently, the Notice of Motion dated 24th October 2025 succeeds in part. I find that the Respondent is entitled to the release of the security deposited in court, but any computation of interest must exclude the period from 15th March 2024, being the date of deposit of the security, until the date of this ruling or release of the funds. 14.Accordingly, I make the following orders:i.The security of Kshs. 239,715/= deposited in court on 15th March 2024 shall be released to the Respondent forthwith.ii.In computing the amount payable to the Respondent, no interest shall accrue on the decretal sum from 15th March 2024, being the date, the security was deposited in court.iii.The Deputy Registrar shall, where necessary, verify and settle the decree in accordance with this ruling before release of any balance.iv.Each party shall bear its own costs of the application. RULING DELIVERED VIRTUALLY, DATED AND SIGNED AT NAIROBITHIS 11TH DAY OF JUNE 2026.P.M. MULWAJUDGEIn the presence of:Mr. Nyboma for AppellantMr. Ongegu for RespondentCourt Assistant: Lispa