Energy & Petroleum Regulatory Authority v Rihal Energy Company Limited (Civil Appeal E026 of 2025) [2026] KEHC 5595 (KLR) (24 April 2026) (Ruling)

REPUBLIC OF KENYA IN THE HIGH COURT OF KENYA AT NAROK CIVIL APPEAL NO. E026 OF 2025 (CORAM: HON. CHARLES M. KARIUKI – J) ENERGY & PETROLEUM REGULATORY AUTHORITY....... APPELLANT/APPLICANT VERSUS RIHAL ENERGY COMPANY LIMITED.......................................................... RESPONDENT RULING A. INTRODUCTION 1) This ruling concerns the Appellant/Applicant’s Notice of Motion dated 29th September 2025 seeking an order of stay of execution of the judgment of the Energy and Petroleum Tribunal delivered on 21st August 2025 in EPA E042 of 2024 pending the hearing and determination of the appeal. 2) The application is brought under Order 42 Rule 6 of the Civil Procedure Rules and Sections 1A, 1B, 3A, and 63(e) of the Civil Procedure Act. The central question before this Court is whether the Applicant has satisfied the legal threshold for the grant of stay of execution pending appeal. NAROK HCCA NO. E026 OF 2025 Page 1 of 16 3) The Court has carefully considered the application, the supporting affidavit, the replying affidavit, and the rival submissions by counsel for both parties. B. PLEADINGS i. Notice of Motion and Supporting Affidavit 4) The Appellant/Applicant, Energy and Petroleum Regulatory Authority, moved this Court by way of a Notice of Motion dated 29th September 2025 brought under Order 42 Rule 6(1) and (6), Order 51 of the Civil Procedure Rules, and Sections 1A, 1B, 3A and 63(e) of the Civil Procedure Act, seeking principally orders of stay of execution of the judgment and decree of the Energy and Petroleum Tribunal delivered on 21st August 2025 in EPA E042 of 2024: Rihal Energy Company Limited vs EPRA, pending the hearing and determination of both the application and the appeal. The Applicant also sought that costs be in the cause. 5) The application is premised on the grounds that the Tribunal entered judgment against the Applicant and ordered the release of 254 proclaimed LPG cylinders and 153 EDA LPG cylinders to the Respondent within 14 days, together with costs. Being dissatisfied with the said decision, the Applicant lodged the present appeal. It is contended that unless an order of stay is granted, the Respondent is likely to execute the decree, thereby rendering the appeal nugatory as the subject LPG cylinders constitute the substratum of the appeal. The Applicant further asserts that it stands to suffer substantial loss, that the appeal raises NAROK HCCA NO. E026 OF 2025 Page 2 of 16 arguable issues with high chances of success, and that the application was filed without unreasonable delay. Additionally, the Applicant expresses willingness to furnish such security as the Court may order for the due performance of the decree. 6) The application is supported by the affidavit of Winny Cheptoo, an officer of the Applicant, sworn on 29th September 2025. She depones that she is conversant with the facts of the matter and competent to swear the affidavit. She reiterates that the Tribunal delivered judgment on 21st August 2025 in favour of the Respondent and annexes a copy thereof. She confirms that the Applicant, being aggrieved, filed a Memorandum of Appeal dated 28th August 2025. She further depones that an application for stay was made before the Tribunal but was declined in a ruling delivered on 25th September 2025. 7) The deponent maintains that unless stay is granted, the substratum of the appeal will be lost and the appeal rendered nugatory. She reiterates that the LPG cylinders in question are central to the dispute and that the appeal raises substantial issues of law and fact. She further avers that the Applicant is ready to comply with any conditions as to security imposed by the Court, that the application has been brought in good faith and without delay, and that no prejudice will be occasioned to the Respondent if the orders sought are granted. Consequently, she urges the Court to allow the application for stay of execution pending the hearing and determination of the appeal. NAROK HCCA NO. E026 OF 2025 Page 3 of 16 ii. Replying Affidavit 8) The Respondent opposed the application through a Replying Affidavit sworn on 13th October 2025 by Hamza Omar, a Director of the Respondent company, who deponed that he is conversant with the facts of the matter and competent to swear the affidavit on its behalf. He states that he has read the Applicant’s Notice of Motion dated 29th September 2025 and swears the affidavit in opposition thereto, contending that the application is frivolous, made in bad faith, and intended to delay justice and abuse the court process. 9) The deponent sets out the background of the dispute, stating that the Respondent had challenged the Applicant’s determination dated 26th November 2024 before the Energy and Petroleum Tribunal, and had obtained interlocutory orders of stay pending the hearing of the appeal. Following a full hearing, the Tribunal delivered judgment on 20th August 2025, allowing the Respondent’s appeal, setting aside the Applicant’s determination, and directing the release of 401 LPG cylinders belonging to the Respondent within 14 days. 10) He further depones that the Applicant subsequently applied for stay before the Tribunal, but the application was dismissed in a ruling delivered on 25th September 2025, the Tribunal having found that the Applicant had not demonstrated any substantial loss. Despite the Tribunal’s orders, the Applicant has allegedly refused to release the cylinders, thereby acting in defiance of a lawful order. NAROK HCCA NO. E026 OF 2025 Page 4 of 16 11) The Respondent avers that the Applicant has failed to meet the legal threshold for grant of stay of execution, particularly the requirement to demonstrate substantial loss, noting that the Applicant, being a regulatory authority, has no proprietary or financial interest in the cylinders. It is further deponed that the cylinders were unlawfully seized and are partly owned by the Respondent and other entities under a Cylinder Mutual Exchange Agreement, of which the Applicant is aware. 12) The deponent contends that the continued detention of the cylinders has caused the Respondent significant financial and reputational loss, disrupted its business operations, and occasioned irreparable harm. He also alleges inconsistency and bad faith on the part of the Applicant, stating that during the pendency of the Tribunal proceedings, the Applicant had released some of the cylinders, yet now seeks to retain them. 13) It is further asserted that the application has been brought with undue delay and is an attempt to re-litigate matters already determined by the Tribunal, contrary to the principle of finality in litigation. The Respondent maintains that it is entitled to enjoy the fruits of its judgment and that granting stay would occasion injustice by prolonging the unlawful deprivation of its property. 14) Accordingly, the Respondent urges the Court to dismiss the application with costs for failure to satisfy the conditions for grant of stay. In the alternative, and without prejudice, it prays that if stay is granted, the NAROK HCCA NO. E026 OF 2025 Page 5 of 16 Applicant be ordered to furnish security equivalent to the full value of the 401 cylinders together with costs, to be deposited in a joint interest- earning account within a specified period. C. SUBMISSIONS i. Appellant’s/Applicant’s Submissions 15) The Appellant/Applicant filed written submissions dated 29th October 2025 in support of its Notice of Motion seeking stay of execution of the judgment of the Energy and Petroleum Tribunal delivered on 21st August 2025 pending the hearing and determination of the appeal. 16) Counsel identified the sole issue for determination as whether the Applicant had met the threshold for the grant of stay of execution pending appeal under Order 42 Rule 6 of the Civil Procedure Rules. Reliance was placed on Order 42 Rule 6(1) and (2), which set out the conditions for grant of stay, namely: demonstration of substantial loss, filing without unreasonable delay, and provision of security. 17) In elaborating the applicable principles, the Applicant cited Gatirau Peter Munya v Dickson Mwenda Kithinji & 2 others [2014] eKLR, where the Supreme Court held that an applicant must demonstrate that the appeal is arguable, that it would be rendered nugatory if stay is not granted, and that public interest may, in appropriate cases, be a relevant consideration. Further reliance was placed on Paul Wandati Mbochi v Stephen Kimotho Karanja [2021] KECA 637 (KLR) and NAROK HCCA NO. E026 OF 2025 Page 6 of 16 Trust Bank Limited & Another v Investech Bank Limited & 3 Others [2000] eKLR, where the Court of Appeal affirmed the twin principles that an applicant must show that the appeal is arguable and that it would be rendered nugatory absent stay. 18) On whether the appeal is arguable, the Applicant submitted that it had filed a Memorandum of Appeal dated 28th August 2025 raising several substantive grounds challenging the Tribunal’s decision, including alleged misapprehension of the law and evidence. It was contended that the appeal raises weighty and non-frivolous issues deserving consideration by the Court. In this regard, reliance was placed on Nairenke & 5 others v Tina & 4 others (Civil Application E043 of 2023) [2023] KECA 1535 (KLR) and Stanley Kang’ethe Kinyanjui v Tony Keter & 5 others [2013] eKLR, for the proposition that at this stage, the Court need only to be satisfied that the appeal is arguable and not frivolous. 19) On substantial loss, the Applicant submitted that the Tribunal ordered the release of 254 proclaimed cylinders and 153 EDA LPG cylinders within 14 days, which period had lapsed, thereby exposing it to imminent execution. It was argued that the LPG cylinders constitute the substratum of the appeal, and that their release would permanently alter the status quo and render the appeal nugatory. The Applicant further contended that the Respondent had not demonstrated its ability to restore the cylinders if the appeal succeeds. In support of the NAROK HCCA NO. E026 OF 2025 Page 7 of 16 nugatory principle, reliance was again placed on Nairenke & 5 others v Tina & 4 others (supra) and Stanley Kang’ethe Kinyanjui v Tony Keter & 5 others (supra), where the Court emphasized that an appeal is rendered nugatory where the subject matter would be irreversibly affected. 20) The Applicant also submitted that the application was filed without unreasonable delay. It was pointed out that the judgment was delivered on 21st August 2025, the Memorandum of Appeal was filed on 28th August 2025, and an application for stay was promptly filed before the Tribunal, which was dismissed on 25th September 2025. The present application was thereafter filed on 29th September 2025. Reliance was placed on Section 79G of the Civil Procedure Act to demonstrate compliance with timelines. 21) On security for due performance, the Applicant submitted that although it is a public regulatory body acting in the public interest under Section 22 of the Energy Act, 2019, it is nonetheless willing to comply with any conditions as to security that the Court may impose. It was emphasized that the requirement for security is discretionary. 22) In conclusion, the Applicant urged the Court to balance the Respondent’s right to enjoy the fruits of its judgment with the Applicant’s right of appeal, and to find that the Applicant had satisfied all the conditions for grant of stay. Accordingly, the Court was urged to NAROK HCCA NO. E026 OF 2025 Page 8 of 16 allow the application, grant stay of execution pending appeal, and order that costs be in the cause. ii. Respondent’s Submissions 23) The Respondent filed submissions dated 9th January 2026 opposing the Appellant’s Notice of Motion dated 29th September 2025 seeking stay of execution of the judgment of the Energy and Petroleum Tribunal delivered on 21st August 2025. Counsel submitted that the Tribunal had conclusively determined the dispute in favour of the Respondent by setting aside the Appellant’s decision and ordering the release of 409 LPG cylinders within 14 days. 24) Counsel identified the applicable principles as those set out under Order 42 Rule 6 of the Civil Procedure Rules, namely: whether the Applicant has demonstrated substantial loss, whether the application was filed without unreasonable delay, and whether security has been furnished. 25) On the issue of substantial loss, the Respondent submitted that the Applicant had failed to meet the threshold. Reliance was placed on James Wangalwa & Another v Agnes Naliaka Cheseto [2012] eKLR, where the Court held that execution per se does not amount to substantial loss and that an applicant must demonstrate other factors showing that execution would irreparably affect the core of the appeal. The Respondent argued that the Applicant merely alleged that the substratum of the appeal would be lost without demonstrating specific NAROK HCCA NO. E026 OF 2025 Page 9 of 16 prejudice. It was further submitted that the Applicant, being a statutory regulator, has no proprietary or financial interest in the LPG cylinders and therefore cannot suffer substantial loss from their release. In contrast, the Respondent contended that it continues to suffer financial and operational losses due to the continued detention of its cylinders. 26) On security for due performance, the Respondent submitted that while the requirement is discretionary, it is necessary in the circumstances of this case to safeguard its interests. It was argued that the continued detention of the cylinders has caused ongoing financial harm, and that in the event the appeal fails, the Respondent requires assurance of compensation. The Court was urged, if inclined to grant stay, to order the Applicant to furnish security equivalent to the value of the cylinders, particularly since the Applicant itself had expressed willingness to comply with such conditions. 27) On the issue of delay, the Respondent submitted that the application was filed after an unreasonable delay. Although the judgment was delivered on 21st August 2025 and the Memorandum of Appeal filed on 28th August 2025, the present application was only filed on 29th September 2025 without sufficient explanation. It was further contended that the Applicant had already filed a similar application before the Tribunal, which was dismissed, and that the present application is an attempt to re-litigate issues already determined. NAROK HCCA NO. E026 OF 2025 Page 10 of 16 28) In conclusion, the Respondent submitted that the Applicant had failed to satisfy the legal threshold for grant of stay of execution, particularly on the requirement of substantial loss, which it described as the cornerstone of such applications, as emphasized in James Wangalwa & Another v Agnes Naliaka Cheseto [2012] eKLR. The Court was therefore urged to dismiss the application with costs. D. ISSUES FOR DETERMINATION 29) Having considered the pleadings and submissions, the Court is of the view that the following issues arise for determination: i. Whether the Applicant has satisfied the conditions for grant of stay of execution pending appeal under Order 42 Rule 6 of the Civil Procedure Rules; ii. Who should bear the costs of the application. E. ANALYSIS AND DETERMINATION 30) The law governing stay of execution pending appeal is well settled. Order 42 Rule 6(2) of the Civil Procedure Rules provides that no order for stay shall be made unless: a) The Court is satisfied that substantial loss may result to the applicant unless the order is made; b) The application has been made without unreasonable delay; and c) Such security as the Court orders for the due performance of the decree has been given. NAROK HCCA NO. E026 OF 2025 Page 11 of 16 31) In addition to the statutory requirements, courts have, through judicial precedent, developed guiding principles. In Gatirau Peter Munya v Dickson Mwenda Kithinji & 2 others [2014] eKLR, the Supreme Court held that an applicant must demonstrate that the appeal is arguable and that, unless stay is granted, the appeal would be rendered nugatory. Similarly, in Trust Bank Limited & Another v Investech Bank Limited & 3 Others [2000] eKLR, the Court of Appeal emphasized the twin principles of arguability and the nugatory effect. These principles were reiterated in Paul Wandati Mbochi v Stephen Kimotho Karanja [2021] KECA 637 (KLR). I. Whether the Appeal is Arguable 32) The Applicant has placed before this Court a Memorandum of Appeal raising several grounds challenging the Tribunal’s decision. The Court at this stage is not called upon to determine the merits of the appeal but only to ascertain whether it raises arguable issues. 33) In Stanley Kang’ethe Kinyanjui v Tony Keter & 5 others [2013] eKLR, the Court held that an arguable appeal is not one that must succeed, but one that raises at least a single bona fide issue deserving consideration. Similarly, in Nairenke & 5 others v Tina & 4 others [2023] KECA 1535 (KLR), the Court reiterated that the threshold is merely whether the appeal is not frivolous. NAROK HCCA NO. E026 OF 2025 Page 12 of 16 34) Upon a prima facie consideration of the grounds of appeal, this Court is satisfied that the appeal raises arguable issues, particularly concerning the Tribunal’s findings on law and fact. Accordingly, this limb is satisfied. II. Whether the Applicant will suffer Substantial Loss 35) The cornerstone of an application for stay is proof of substantial loss. This principle was emphasized in James Wangalwa & Another v Agnes Naliaka Cheseto [2012] eKLR, where the Court held that execution alone does not amount to substantial loss and that an applicant must demonstrate a state of affairs that would irreparably affect the core of the appeal. 36) The Applicant contends that the LPG cylinders form the substratum of the appeal and that their release would render the appeal nugatory. On the other hand, the Respondent argues that the Applicant has no proprietary interest in the cylinders and therefore stands to suffer no loss. 37) The purpose of stay is to preserve the subject matter so that the appeal is not rendered nugatory. In Stanley Kang’ethe Kinyanjui v Tony Keter & 5 others [2013] eKLR, the Court held that an appeal is rendered nugatory where what is sought to be stayed is irreversible or cannot be adequately compensated by damages. 38) In the present case, the subject matter comprises LPG cylinders whose release has been ordered by the Tribunal. Once released and returned into circulation, their recovery may not be easily reversible. This Court is NAROK HCCA NO. E026 OF 2025 Page 13 of 16 persuaded that the substratum of the appeal would be affected if stay is not granted. 39) While the Respondent has demonstrated that it is suffering business losses, the Court must balance the competing interests of both parties. In doing so, the Court finds that the Applicant has demonstrated that it stands to suffer substantial loss in the sense contemplated in law. III. Whether the Application was filed without unreasonable delay 40) The Tribunal’s judgment was delivered on 21st August 2025. The Memorandum of Appeal was filed on 28th August 2025. The Applicant then sought stay before the Tribunal, which application was dismissed on 25th September 2025. The present application was filed on 29th September 2025. 41) The Court finds that the Applicant acted promptly and cannot be faulted for first seeking relief before the Tribunal. The subsequent filing of the present application within a few days of the Tribunal’s ruling does not amount to unreasonable delay. 42) Accordingly, this limb is satisfied. IV. Security for due performance 43) The requirement for security is mandatory, but the nature and extent thereof is discretionary. In Arun C. Sharma v Ashana Raikundalia t/a Raikundalia & Co. Advocates [2014] eKLR, the Court held that NAROK HCCA NO. E026 OF 2025 Page 14 of 16 security is meant to guarantee the due performance of the decree and to balance the interests of both parties. 44) The Applicant has expressed willingness to provide security. On the other hand, the Respondent has urged the Court to order security equivalent to the value of the cylinders. 45) Given the circumstances of this case, and in order to balance the competing rights of the parties, the Court finds it just to grant stay on condition that the Applicant furnishes appropriate security. F. CONCLUSION AND ORDERS 46) In the result, the Court finds that the Applicant has satisfied the conditions for grant of stay of execution pending appeal. 47) Accordingly, the Notice of Motion dated 29th September 2025 is hereby allowed on the following terms: a) There shall be a stay of execution of the judgment of the Energy and Petroleum Tribunal delivered on 21st August 2025 pending the hearing and determination of the appeal; b) The Applicant shall, within forty-five (45) days, deposit security equivalent to the value of the subject LPG cylinders or such sum as shall be agreed by the parties or determined by the Court, in a joint interest-earning account in the names of both advocates; c) In default of compliance with (b) above, the stay shall lapse automatically; d) Costs of the application shall abide the outcome of the appeal. NAROK HCCA NO. E026 OF 2025 Page 15 of 16 48) It is so ordered. Dated, signed, and delivered at Narok, this 24th day of April, 2026. …………………………………………………. CHARLES KARIUKI JUDGE NAROK HCCA NO. E026 OF 2025 Page 16 of 16