https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/10335

**THE REPUBLIC OF KENYA** **IN THE HIGH COURT OF KENYA** **AT NAIROBI** **COMMERCIAL AND TAX DIVISION** **CIVIL SUIT NO 518 OF 2011** BETHANY VINEYARDS LIMITED……………………………...1ST PLAINTIFF JOSEPH MUTURI KAMAU……………………….2ND PLAINTIFF/APPLICANT VERSUS EQUITY BANK LIMITED ……..………...1ST DEFENDANT/1ST RESPONDENT EQUITY NOMINEES LIMITED ……..…2ND DEFENDANT/2ND RESPONDENT PETER K. MUNGA…………………...…3RD DEFENDANT /3RD RESPONDENT **RULING** 1. Before this Court is a Notice of Motion application dated 21st November 2025, filed pursuant to Sections 1A, 1B and 3A of the Civil Procedure Act, Order 42 Rule 6 and Order 51 Rule 1 of the Civil Procedure Rules, 2010. The 2nd plaintiff/applicant seeks an order for stay of execution of the Judgment delivered on 8th October 2025. He also prays for costs of the application herein. 2. The application is premised on the grounds set out on the face of the Motion and it is supported by an affidavit sworn on 21st November 2025 by Mr. Joseph Muturi Kamau, the applicant herein. He averred that this Court delivered Judgment which dismissed the plaintiffs’ claim and allowed the 3rd respondent’s counterclaim. He contended that being aggrieved with the said decision, he lodged an Appeal to the Court of Appeal. He stated that he requested for typed copies of the proceedings and a certified copy of the signed Judgment to enable him file a Memorandum of Appeal. He averred that he has an arguable Appeal and if stay of execution is not granted, the intended Appeal will be rendered nugatory. He contended that the respondents will not suffer any prejudice, if stay of execution is granted. Mr. Muturi stated that the 3rd respondent has already secured and still holds 3,000,000 Transcentury shares that he purchased from him, which he has held for fourteen (14) years, and that he (3rd respondent), has been enjoying dividends therefrom. 3. The applicant averred that he is ready and willing to comply with the directions of the Court on deposit of security. He also averred that he is a Shareholder of Warwinu Holdings Limited, which is the owner of two apartments in Nairobi and that the said company has authorized him to use the apartments as security for the decretal sum in this matter. 4. He stated that the instant application has been filed without undue delay and urged this Court to allow the application in the interest of justice. 5. In opposition to the application, the 1st and 2nd respondents filed a replying affidavit sworn on 17th December 2025 by Mr. Samuel N. Wamaitha, the 1st respondent’s Manager, Legal Services. He stated that the allegation by the applicant that he will suffer substantial loss if stay of execution is not granted is without merits because the 1st respondent is a reputable financial institution capable of refunding the decretal sum, should the appeal succeed and that the applicant has failed to demonstrate that the 1st and 2nd respondents would be unable to restore the *status quo*, if the appeal is successful. 6. Mr. Wamaitha rejected the proposal made by the applicants to provide the two apartments as security, and stated that they are owned by Warwinu Holdings Limited, which is a separate legal entity from the applicant herein, hence the said apartments cannot be used to secure a personal judgment debt. He deposed that apartments are subject to various covenants and management company restrictions, which may impede realization of the security. 7. He averred that the security held by the 3rd respondent does not protect the interests of the 1st and 2nd respondents in so far as their costs of the dismissed suit is concerned, as there is no document annexed to the applicant’s affidavit confirming the alleged shares or dividends. 8. Mr. Wamaitha contended that the grounds in the draft Memorandum of Appeal are generalized on the liability of the 1st and 2nd respondents, as they predominantly attack the 3rd respondent’s counterclaim. He stated that the applicant has not offered to deposit any sum in a joint interest earning account. He further stated that the application is a mere delaying tactic, meant to the deny the 1st and 2nd respondents costs of the litigation, which has been ongoing since 2011. He urged this Court to dismiss the application with costs to the respondents. 9. The 3rd respondent herein, Peter Kahara Munga, opposed the application through Grounds of Opposition dated 9th December 2025. He stated that the applicant has not met the test for being granted an order for stay of execution. He further stated that this Court delivered Judgment on 8th October 2025 and in compliance of the same, the execution process had commenced, including transfer of shares to the applicant, within the 45 days ordered by the Court. The 3rd respondent contended that granting of orders for stay of execution will cause interference with the said process. 10. He asserted that he stands to suffer prejudice as he has been kept way from the use of his money for fourteen (14) years, and granting orders for stay of execution, will cause him further delay. He pointed out that the instant application was filed on the eve of the forty-five (45) days’ stay period granted by the Court. 11. The 3rd respondent contended that the Judgment in issue was a monetary one, which can be refunded and the appeal cannot therefore be rendered a nullity. He also contended that the property offered as security is of low value, compared to the refund due and owing. He urged this Court to dismiss the application in the interest of justice and fairness. 12. The 3rd respondent also filed a replying affidavit sworn on 16th December 2025 by Mr. Peter Kahara Munga. He averred that the applicant herein seeks stay of execution orders in respect of the Judgment delivered on 8th October 2025, which ordered the transfer of 3,000,000 Transcentury shares to the applicant. He deposed that the orders being sought by the applicant will interfere with the ongoing execution of the Court’s own Judgment, which will undermine the authority of the Court and cause injustice to him as he has been kept away from use of his money for over fourteen (14) years. He asserted that he stands to suffer prejudice as the orders will hinder him from enjoying the fruits of his Judgment. 13. He contended that the application herein is an abuse of the Court process, as it was filed late on the eve of the last 45 days’ window of the stay of execution that had been granted. 14. Mr. Munga averred that the applicant has not met the threshold for being granted stay of execution since he has not taken any steps to sign the shares re-transfer forms, and that the respondents have already commenced the process of re-transferring the said shares, and they have already signed the required re-transfer forms. 15. He deposed that the 2nd applicant sought to offer two apartments owned by Warwinu Holdings Limited as security for the due performance of the decree, yet the applicant is not the owner of the said apartments, and no documentary evidence had been availed to show ownership, control or sole beneficial interest in the said company. Further, that no valuation report had been availed which renders the security speculative, unascertained and unreliable. 16. Mr. Munga averred that the applicant received a substantial amount of money over fourteen (14) years ago, which has never been refunded and that he (applicant), declined to exchange the money with re-conveyance of his own shares. He argued that the applicant cannot seek discretionary relief for stay of execution, while continuing to withhold his funds. 17. He argued that irreparable loss is known as it is a liquidated money decree, a payment which he can refund if the applicant succeeds on appeal. He further stated that applicant has neither demonstrated any irreparable substantial loss that he would suffer if execution proceeds, nor exceptional circumstances which would warrant being granted orders for stay of execution. He urged this Court to dismiss the application dated 21st November 2025, with costs to him, as the application is unmerited and frivolous. 18. The application was canvassed by way of written submissions. The applicant filed submissions dated 23rd February 2026 by the law firm of Kaplan and Stratton Advocates. The 1st and 2nd respondents filed submissions dated 20th February 2026 by the law firm of Waweru Gatonye & Company Advocates, while the 3rd respondent filed submissions dated 12th February 2026 by the law firm of C. N. Kihara & Co Advocates. 19. Mr. Kahura, learned Counsel for the applicant submitted that the applicant stands to suffer substantial loss as defined in the case of **Antoine Ndiaye vs African Virtual University** [2015] eKLR and **Geoffrey Muriungi & another v John Rukunga M’Imonyo suing as Legal Representative of the estate of Kinoti Simon Rukuanga** [Deceased] [2016], eKLR. 20. He stated that the grounds of appeal in the draft Memorandum of Appeal are arguable and relied on the cases of **Stanley Kangethe Kinyanjui v Tony Ketter & 5 others** [2013] eKLR, to demonstrate that a single *bona fide* and arguable ground will suffice the requirement of establishing an arguable appeal. 21. He stated that the decretal sum awarded to the respondent is a colossal amount, and there is need to grant orders for stay of execution. He relied on the case of **Oraro & Rachier Advocates vs Cooperative Bank of Kenya Limited** Civil Application No. Nai 358 of 1999, to support his argument. 22. On the issue of deposit of security, Mr. Kahura stated that the applicant is ready and willing to offer security as required, and cited the case of **Arun C. Sharma vs Ashana Raikundalia T/A Raikundalia & Co. Advocates & 2 others** [2014] eKLR, to support his position. He urged this Court to exercise its discretion by granting the applicant the orders being sought herein, and relied on the case of **John Mwangi Ndiritu v Joseph Ndiritu Wamathai** [2016] eKLR, which cited the case of **Butt v Rent Restriction Tribunal** [1982] KLR 417. 23. Mr. Munyalo,learned Counsel for the 1st and 2nd respondents submitted that Order 42 Rule 6 of the Civil Procedure Rules, 2010, provides for conditions for stay of execution as was established in the case of **Stejes Agencies Limited v Benjamin Malonza Paul** [2021 eKLR, but the applicant herein has not met the said conditions. He stated that mere apprehension of commencement of lawful execution does not qualify to be substantial loss and relied on the cases of **Jepchirchir v Chemwor** [2024] KEHC 14288 (KLR), **Kenya Shell Limited v Benjamin Karuga Kibiru & anothe**r [1986] KECA 94 (KLR) and **Antoine Ndiaye vs African Virtual University** (supra). 24. On the issue of security, Mr. Munyalo submitted that it has to be offered in due performance of the decree. He cited the case of **Tabro Transporters Ltd v Absalom Dova Lumbasi** [2012] eKLR, to support his position. He stated that the decretal sum is an aggregate of Kshs.44,905,790.00, excluding the costs awarded to the 1st and 2nd respondents. In making reference to the Valuation Report by Value Zone Limited relied on by the applicant, Mr. Munyalo pointed out that the market value of the properties offered as security is Kshs.44,000,000/=. He contended that the realizable market value of the said properties may be significantly lower than the market value indicated in the said Valuation Report. He stated that in the event that this Court allows the application, it should make an order for the decretal sum to be deposited in a joint interest earning account, or for this Court to dismiss the application. 25. Mr. C.N. Kihara, learned Counsel for the 3rd respondent submitted that the applicable law in an application of this nature is Order 42 Rule 6 of the Civil Procedure Rules, 2010. He cited the case of **Kenya Shell Limited v Benjamin Karuga Kibiru & another** (supra), where the Court held that substantial loss is the cornerstone of the jurisdiction for stay. 26. He also cited the case of **James Wangalwa & another v Agnes Naliaka Cheseto** [2012] eKLR,where the Court stated that the fact that there would be execution of the decree did not amount to substantial loss. 27. He relied on the case of **Antoine Ndiaye vs African Virtual University** (supra), to assert that a payment, which is a mere refund to the 3rd respondent, cannot expose the applicant to irreparable damage, and there is no evidence that the intended appeal is at the risk of being rendered a nullity. 28. On the issue of deposit of security,Mr. C.N. Kihara cited the case of **Focin Motorcycle Co. Ltd v Ann Wambui Wangui & another** [2018] eKLR, to assert that security must be real, enforceable and commensurate with the decree. Counsel also relied on the case of **Arun C. Sharma vs Ashana Raikundalia T/A Raikundalia & Co Advocates & 2 others** (supra), where the Court emphasized that security must not be illusory or speculative.He urged this Court to dismiss the application herein with costs. **ANALYSIS AND DETERMINATION.** 1. I have considered the instant application, the grounds on the face of it and the affidavit filed in support thereof. I have also considered the replying affidavits filed by the 1st, 2nd and 3rd respondents, as well as the grounds of opposition filed by the 3rd respondent. I have also taken into account the written submissions relied on by Counsel for the parties. The issue that arises for determination is whether the application for stay of execution has merits to warrant the orders sought herein. 2. The instant application is premised on Order 42 Rule 6 of the Civil Procedure Rules, 2010,which provides as follows- ***“No order for stay of execution shall be made under sub rule (1) unless:-*** * + 1. ***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*** 2. ***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”*** 1. In the case of **RWW v EKW** [2019] eKLR, the Court explained the purpose of an application for stay of execution pending appeal and stated as follows:- ***“The purpose of an application for stay of execution pending an appeal is to preserve the subject matter in dispute so that the rights of the appellant who is exercising the undoubted right of appeal are safeguarded and the appeal if successful, is not rendered nugatory. However, in doing so, the Court should weigh this right against the success of a litigant who should not be deprived of the fruits of his/her judgment. The Court is also called upon to ensure that no party suffers prejudice that cannot be compensated by an award of costs.”*** 1. The conditions that need to be met by the applicant herein, in order for this Court to grant orders of stay for execution, are- 1. ***The application has been made without unreasonable delay.*** 2. ***The Applicant will suffer Substantial loss.*** 3. ***The Applicant has offered security for due performance of the decree.*** 2. On the first condition of unreasonable delay, this Court delivered Judgment on 8th October 2025 and granted the applicant 45 days’ stay of execution which period was to elapse on 23rd November 2025. The application herein is dated 21st November 2025, which shows that there was no unreasonable delay in filing the same, hence the condition was fulfilled. 3. The second condition on substantial loss has to be proved as was stated in the oft cited case of **Kenya Shell Limited v Benjamin Karuga Kibiru & another** (supra), where the Court held that- ***“Substantial loss in its various forms is the corner stone of both jurisdictions for granting a stay. That is what has to be prevented. Therefore, without this evidence it is difficult to see why the respondents should be kept out of their money”*** 1. In order for this Court to determine whether the applicant will suffer substantial loss, it needs to determine whether the appeal herein is arguable. The Court of Appeal in **Joseph Gitahi Gachau & another v Pioneer Holdings (A) Limited & 2 others** [2009] eKLR, stated as follows on arguability of appeals- …***On our part, after considering the rival submissions by the parties, the ruling of the learned Judge below together with pleadings we are satisfied that the appeal is indeed arguable. This, in essence, does not mean an appeal which must necessarily succeed, but of course, one which ought to be argued fully before the Court.”*** 1. This Court has gone through the draft Memorandum of Appeal and finds that the grounds raised therein are not arguable. This is because this Court found that the 3rd respondent had not signed the share transfer forms to show intent of execution in the purchase of the shares from the applicant herein; among the other findings made by this Court in its Judgment. This Court notes the correspondence from the 3rd respondent’s Advocate, related to the re-transfer of the shares after Judgment was delivered, through letters dated 9th December 2025 and 15th December 2025, seeking approval for the re-transfer of the said shares. 2. Additionally, the process of execution is a lawful one and it is not sufficient for the applicant herein to contend that he will suffer substantial loss, without proving the same. It is my finding that the applicant herein has not proved that he will suffer substantial loss, or that the respondents are not in a position to refund the decretal amount and costs, if his appeal succeeds, hence this condition has not been proved. 3. The last condition to be met is on deposit of security, which was discussed in the case of **Gianfranco Manenti & another v Africa Merchant Assurance Co. Ltd** [2018] KEHC 873 (KLR). The Court therein held as follows- ***“… the applicant must show and meet the condition of payment of security for due performance of the decree. Under this condition a party who seeks the right of appeal from money decree of the lower Court for an order of stay must satisfy this condition on security. In this regard, the security for due performance of the decree under order 42 rule 6(1) of the Civil Procedure Rules, it is trite that the winner of litigation should not be denied the opportunity to execute the degree in order to enjoy the fruits of his judgment in case the appeal fails...”*** 1. In this case, the Court notes that the applicant has only offered security in the form of two apartments owned by Warwinu Holdings Limited, in which the applicant is a Shareholder. The applicant did not disclose how many shares he holds in the said company, and the value of his shares. The 3rd respondent opposed the provision of the apartments as security, as there is no evidence availed as to their value. The applicant however disclosed the value of the apartments as Kshs.44,000,000/= in a Valuation Report by Value Zone Limited dated 18th November 2025. The value of the said apartments cannot be equated to the value of the applicant’s shares when there is non-disclosure on his shareholding in Warwinu Holdings Limited. 2. This Court is of the considered view that since the decretal sum is monetary, the security offered should also have been monetary to be deposited either in Court or in a joint interest earning account and not in terms of Title Deeds for land or the lease documents for the apartments as offered by the applicant herein. This Court relies on the case of **Onesmus Mburu Njuguna vs Samson Kitire Kuna**[2007] eKLR, where the Court stated thus- ***“The judgment* *against the appellant is a money decree. In the circumstances, it would be fair and just that the security to be deposited should be in form of money and not a title deed of a parcel of land. I think it would be unjust to the respondent if this Court were to accept the proposal by the appellant that he deposits a title deed instead of cash as security pending the hearing and determination of the Appeal. The purpose of security is to secure the interests of a respondent pending the hearing of the appeal. In the instant application, the respondent was awarded a money decree. The security should therefore be in form of money. I therefore hold that the security offered by the appellant is not appropriate for the circumstances of this case.”*** 1. This Court finds that the applicant has not proved his case to warrant being granted orders for stay of execution. The Notice of Motion application dated 21st November 2025, lacks merits. It is dismissed with costs to the respondents. It is so ordered. **DATED, SIGNED and DELIVERED IN KIAMBU on this 19TH day of** **JUNE 2026. Ruling delivered through Microsoft Teams Online platform.** **NJOKI MWANGI** **JUDGE** **In the presence of:** Mr. Kahura for the plaintiffs Ms Gichuhi h/b for Mr. Munyalo for the 1st & 2nd defendants Mr. C.N. Kihara for the 3rd defendant Ms Julia – Court Assistant.