https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/12389

Ladak v Kenya Orient Insurance Company Ltd (Commercial Appeal E011 of 2025) [2026] KEHC 12389 (KLR) (31 July 2026) (Ruling) Neutral citation: [2026] KEHC 12389 (KLR) Republic of Kenya In the High Court at Mombasa Commercial Appeal E011 of 2025 J Ngaah, J July 31, 2026 Between Amin Ladak Applicant and Kenya Orient Insurance Company Limited Respondent (Being an application for stay of execution pending the hearing and determination of an appeal from the judgment of Hon. Rose Ombata, Principal Magistrate, delivered on 3rd July 2025 in Mombasa CMCC No. E1392 of 2023) Ruling The application 1.By a Notice of Motion dated 17th July 2025, expressed to be brought under Order 42 rule 6 of the Civil Procedure Rules, 2010, sections 1A, 1B and 3A of the Civil Procedure Act, cap 21, and all other enabling provisions of the law, the appellant, who is the applicant, moves this court principally for an order that this court "be pleased to order a stay of execution of the judgment delivered on 3rd day of July 2025 in Mombasa MCCC No. E1392 of 2023, pending the hearing and determination of the appeal herein". The Motion also asks for such further or other orders as may be just and expedient in the circumstances, and for the costs of the application. 2.The Motion is premised on the grounds on its face and is supported by the affidavit of Amin Ladak, the applicant, sworn on 17th July 2025. It is opposed by the respondent’s Grounds of Opposition dated 18th July 2025. The application was canvassed by way of written submissions: the applicant filed submissions dated 7th August 2025, together with amended submissions of even date and a list of authorities; the respondent filed submissions dated 11th August 2025; and the applicant filed a reply dated 22nd August 2025. I have considered all of them, together with the authorities cited and the authorities of the Court of Appeal to which I return below. Background 3.The applicant, trading as Jaffery Motors, sued the respondent in the Chief Magistrate’s Court at Mombasa in CMCC No. E1392 of 2023, claiming Kshs. 1,438,400 said to arise from the storage of motor vehicles which, on his case, he has warehoused since September 2018. By a judgment delivered on 3rd July 2025, the learned trial magistrate (Hon. Rose Ombata, Principal Magistrate) dismissed the suit with costs to the respondent. 4.Aggrieved, the applicant lodged a Memorandum of Appeal dated 7th July 2025, contending in substance that, having found in his favour that there was a contract not statute-barred, that he had locus standi, and that the vehicles remained in his storage, the trial court nonetheless erred in dismissing a case said to have been proved on a balance of probabilities; that the question of an invoice, upon which the dismissal turned, was never an issue on the pleadings or the evidence; and that, in the alternative, he was entitled to recompense on a quantum meruit. 5.The respondent, equally dissatisfied with part of the judgment, filed a Memorandum of Cross-Appeal dated 18th July 2025, contending that the suit ought to have been found statute-barred under the Limitation of Actions Act, cap 22; that there was no valid contract; and that the applicant lacked the capacity to sue. 6.In the meantime, the respondent moved to recover its costs. It drew a Party and Party Statement of Costs dated 7th July 2025 in the total sum of Kshs. 164,200, served it upon the applicant’s advocates on or about 9th July 2025, and issued a Notice of Assessment dated 11th July 2025 scheduling the bill for assessment before the trial court on 29th July 2025. It is this step that precipitated the present application. The applicant’s case 7.The applicant’s case, drawn from the grounds on the face of the Motion and the supporting affidavit, is that the appeal raises arguable grounds with a high probability of success; that the respondent has already set execution in motion by filing and serving the bill of costs and securing an assessment date; that unless a stay is granted the assessment will proceed and be followed by enforcement, occasioning him substantial loss and rendering the appeal nugatory; that he is advised the respondent’s capacity to refund any sums recovered, should the appeal succeed, is uncertain; that he is ready to abide by such terms as to security as the court may impose; and that the application is brought in good faith and without delay. 8.In his written submissions the applicant anchored the application on Order 42 rule 6 of the Civil Procedure Rules and section 3A of the Civil Procedure Act, addressing the trinity of substantial loss, absence of unreasonable delay, and security. On substantial loss he relied on Antoine Ndiaye v African Virtual University [2015] KEHC 6783 (KLR), for the proposition that substantial loss is a qualitative concept referring to any loss of real worth as distinguished from a nominal loss. He pointed to his continuing outlay in rent, security and utilities for the warehoused vehicles, and cited Focin Motorcycle Co. Ltd v Ann Wambui Wangui & another [2018] KEHC 8358 (KLR), Machira t/a Machira & Co. Advocates v East African Standard [2002] KEHC 1167 (KLR) and Electro Watts Ltd v Alios Finance Kenya Ltd [2018] KEHC 9459 (KLR). By his amended submissions he added that the respondent’s own cross-appeal shows both parties to be aggrieved, so that there is sufficient cause, and it is just, to stay execution of the costs pending appeal. 9.Significantly, the applicant’s reply submissions dated 22nd August 2025 refined the target of the application. He conceded that the dismissal of his suit is, in itself, a negative order, but contended that the application is not aimed at the dismissal; it is aimed at the consequential process of taxation and recovery of costs, which is executable and which, if allowed to run, would prejudice him. He relied on Njenga v Kinyanjui & 2 others [2023] KEHC 25100 (KLR), citing RWW v EKW [2019] eKLR, for the proposition that the purpose of a stay is to preserve the substratum of the appeal, and prayed for an order staying the taxation of the bill pending the appeal. The respondent’s case 10.The respondent opposed the Motion on four grounds: that the order of the subordinate court is a negative order incapable of being stayed; that the applicant does not meet the conditions for a stay pending appeal; that there is no decree capable of execution; and that the application is an abuse of process. In its submissions it relied on Jennifer Akinyi Osodo v Boniface Okumu Osodo & 3 others [2021] eKLR, in which the Court of Appeal, faced with a judgment that had merely dismissed a suit with costs, held that what issued was a negative order incapable of execution, with nothing to stay; and it drew on Western College of Arts & Applied Sciences v Oranga & 3 others [1976] eKLR and Raymond M. Omboga v Austine Pyan Maranga, Kisii HCCA No. 15 of 2010. On the merits it submitted that the bill stands at a modest Kshs. 164,200, so that the claim of irreparable and substantial loss is far-fetched, and urged dismissal with costs. Issues for determination 11.Three issues arise: first, whether the judgment sought to be stayed is capable of being stayed; secondly, whether the applicant’s reframing of the relief as a stay of the taxation and recovery of costs surmounts the difficulty; and thirdly, whether, in any event, the conditions for a stay are met and what orders would be just. The law 12.The jurisdiction invoked is that under Order 42 rule 6(1) and (2) of the Civil Procedure Rules, which permits the court, for sufficient cause, to order a stay of execution of a decree or order, and to make such order thereon as may seem just, but which forbids a stay unless the court is satisfied that substantial loss may result to the applicant, that the application has been made without unreasonable delay, and that security has been given for the due performance of the decree. The rule provides, so far as material:“(1)No appeal or second appeal shall operate as a stay of execution or proceedings under a decree or order appealed from except in so far as the court appealed from may order but, the court appealed from may for sufficient cause order stay of execution of such decree or order…(2)No order for stay of execution shall be made under subrule (1) unless —(a)the court is satisfied that substantial loss may result to the applicant unless the order is made and that the application has been made without unreasonable delay; and(b)such security as the court orders for the due performance of such decree or order as may ultimately be binding on him has been given by the applicant." 13.Two long-settled principles inform the discretion. A successful litigant ought not lightly to be deprived of the fruits of a judgment; yet where a party exercises an undoubted right of appeal, the court ought so to arrange matters that the appeal, if successful, is not rendered nugatory: Wilson v Church (No. 2) (1879) 12 Ch D 454; Butt v Rent Restriction Tribunal [1982] KLR 417. But these principles operate only where there exists an order capable, in law, of being stayed. Where there is nothing to stay, the discretion does not arise. On that anterior question the law is settled at the level of the Court of Appeal, and this court is bound by it. (i) The nature of the order: a negative order 14.The judgment of 3rd July 2025 dismissed the applicant’s suit with costs. It commanded no party to do anything, or to refrain from doing anything, or to pay any sum other than costs. It is, in the settled language of the authorities, a negative order. In Kanwal Sarjit Singh Dhiman v Keshavji Jivraj Shah [2008] KECA 346 (KLR), the Court of Appeal (Githinji, Waki & Aluoch, JJA) held, of an order that had merely dismissed an application with costs:“By the order, the superior court did not order any of the parties to do anything or refrain from doing anything or to pay any sum. It was thus, a negative order which is incapable of execution save in respect of costs only…" 15.That statement has been applied without interruption. In Agalo v County Government of Trans Nzoia & 9 others [2026] KECA 996 (KLR), where, as here, both parties conceded that the impugned order was negative, the Court of Appeal (Gachoka, Korir & Ndolo, JJA) reviewed the line of authority, including Co-operative Bank of Kenya Ltd v BIFU (Kenya) [2015] eKLR and Kenya Commercial Bank Ltd v Tamarind Meadows Ltd & 7 others [2016] eKLR, and concluded simply that "there is nothing to stay" and that the court was "incapable of issuing the orders sought". The applicant’s own concession in his reply submissions that the dismissal is a negative order is, therefore, rightly made. To the extent the Motion seeks a stay of the dismissal itself, it must fail. Whether a recast as a stay of costs or taxation surmounts the difficulty 16.Recognising that difficulty, the applicant recast his prayer, in reply, as one for a stay of the taxation and recovery of costs rather than of the dismissal. That, in my respectful view, does not avail him, for three connected reasons rooted in the Court of Appeal authorities placed before me. 17.First, an award of costs consequent upon a dismissal cannot itself found an application for stay. In Kaikai & another v Nkolia & 6 others [2026] KECA 787 (KLR), the trial court had struck out the applicants’ petition with costs, which were assessed at Kshs. 739,000, and the applicants urged that execution for those costs would render their appeal nugatory. The Court of Appeal (Asike-Makhandia, H.A. Omondi & L.K. Kimaru, JJA) rejected the argument in terms directly applicable here:“By striking out the applicants’ petition, the trial court did not make a positive order requiring anything to be done or restraining anything from being done. It was a negative order incapable of execution. Award of costs usually follow the event. It cannot form a basis for an application before this Court for order of stay of execution pending the hearing of an appeal or an intended appeal." 18.Secondly, the point is not merely theoretical: the Court of Appeal has refused a stay on facts materially indistinguishable from the present. In Njiru v District Commissioner Mbeere District & 3 others [2023] KECA 1053 (KLR), the judicial review suit had been dismissed with costs, which had been taxed at Kshs. 148,163 — a sum close to the Kshs. 164,200 in issue here — and the applicant expressly sought a stay of execution of those taxed costs. The Court of Appeal (J. Mohammed, L.K. Kimaru & A.O. Muchelule, JJA) held that what had issued was "in the nature of a negative order that was incapable of execution, save in respect of costs", and that, on the authorities, it was "unable to grant stay". If a stay of taxed costs was refused there, it is difficult to see on what principled basis it could be granted here. 19.Thirdly, and most directly, the manoeuvre of praying for a stay of costs while the appeal in substance attacks the dismissal has been named and rejected. In Mokua v Mokua [2025] KECA 238 (KLR), where the applicant sought to stay taxed costs while his memorandum of appeal challenged the dismissal of his suit, the Court of Appeal (Okwengu, H.A. Omondi & J.M. Ngugi, JJA) observed:“It is our considered view that the applicant wants to circumnavigate the law on negative orders by praying for stay of costs whereas the memorandum of appeal challenges the dismissal of the suit." 20.That observation fits the present application closely. The applicant’s Memorandum of Appeal dated 7th July 2025 is directed squarely at the dismissal of his suit; the recast prayer for a stay of costs, advanced only in reply, is in substance an attempt to obtain by another route the very stay of a negative order that the law forbids. I am bound to decline it. 21.For completeness, I note that the applicant’s reliance on Kanwal Dhiman does not assist him even though that is the fountainhead of the negative-order rule. The Court of Appeal there declined to stay anything arising from the negative order; the relief it did grant was an injunction preserving unique land from irreversible alienation, made under the court’s inherent jurisdiction and conditioned on a deposit into a joint interest-earning account. That preservation logic has no application where, as here, the only thing said to be at risk is a modest and entirely refundable sum of costs. Costs paid can be repaid; nothing is lost that cannot be restored. (iii) Substantial loss, and the cross-appeal 22.Even had there been an order capable of stay, the applicant does not establish substantial loss within Order 42 rule 6(2)(a). His deposition, on advice, that the respondent might be unable to refund the costs is not persuasive: the respondent is a licensed insurer, the sum is Kshs. 164,200, and the respondent’s own submissions treat that sum as trifling. A bare, unparticularised doubt about the ability of a regulated insurance company to refund a sum of that order raises no reasonable apprehension of loss. The continuing expense of warehousing the vehicles, for its part, is a burden of the underlying dispute and of the applicant’s general circumstances; it is not loss occasioned by execution for costs and cannot serve as such. 23.Nor does the pending cross-appeal alter the analysis. It is true that the respondent, too, is aggrieved, and that the foundation of the costs order is under challenge from both sides. But the cross-appeal does not convert a negative order into a positive one. The costs order remains an order that the applicant pay the respondent; there is still no positive command capable of being stayed. The existence of the cross-appeal may be a matter for case management of the appeal and cross-appeal together, but it does not supply the jurisdictional foundation that the decisions in Kaikai & another v Nkolia & 6 others (supra), Njiru v District Commissioner Mbeere District & 3 others, Agalo v County Government of Trans Nzoia & 9 others (supra) and Mokua v Mokua (supra) hold to be absent. Disposition 24.For these reasons, and being bound by the decisions of the Court of Appeal placed before me, I find the Notice of Motion dated 17th July 2025 to be without merit. I make the following orders:(a)The prayer for stay of execution of the judgment delivered on 3rd July 2025 in Mombasa CMCC No. E1392 of 2023, insofar as it is directed at the dismissal of the suit, is declined, the dismissal being a negative order incapable of stay.(b)The prayer for a stay of the taxation and/or execution of the respondent’s costs is likewise declined, an award of costs consequent upon a dismissal being incapable, in law, of founding an order of stay of execution pending appeal.(c)Given that both the appeal and the cross-appeal remain pending, the costs of this application shall abide the outcome of the appeal.It is so ordered. DATED, SIGNED AND DELIVERED ON 31 JULY 2026NGAAH JAIRUSJUDGE