https://new.kenyalaw.org/akn/ke/judgment/keca/2026/1526

Equip Agencies Limited & 4 others v I&M Bank Limited & another (Civil Appeal (Application) E361 of 2022) [2026] KECA 1526 (KLR) (31 July 2026) (Ruling) Neutral citation: [2026] KECA 1526 (KLR) Republic of Kenya In the Court of Appeal at Nairobi Civil Appeal (Application) E361 of 2022 WK Korir, L Ndolo & AI Hassan, JJA July 31, 2026 Between Equip Agencies Limited 1st Applicant Vinesh Indubhai Patel 2nd Applicant Grishma Kumar Indubhai Patel 3rd Applicant Unicom Limited 4th Applicant Interactor Company Limited 5th Applicant and I&M Bank Limited 1st Respondent George Njoroge Muiruri t/a Phillips International Auctioneers 2nd Respondent (Being an application for injunction pending appeal against the entire Ruling and Order of the High Court of Kenya at Nairobi (E.C Mwita, J) dated and delivered on 3rd June 2022inHCCC No E943 of 2021) Ruling 1.By their notice of motion dated 17th June 2022, brought under rule 5(2)(b) of the Court of Appeal Rules, the applicants seek a temporary order of injunction restraining the respondents from evicting them, advertising for sale, selling whether by public auction or private treaty, disposing of or otherwise howsoever, interfering with the applicants’ ownership or quiet possession over the parcels of land known as Mainland North/VI/3075, L.R No 209/4535, L.R No 214/172 and L.R No 209/8755, pending the hearing and determination of their appeal. 2.The motion is premised on the grounds that:a.The applicants’ properties namely; Mainland North/VI/3075, L.R No 209/4535, L.R No 214/172 and L.R No 209/8755 were separately charged in favour of the 1st respondent, to secure a cumulative sum of Kshs. 450,000,000 offered and disbursed to the 1st applicant. The loan facilities have been fully repaid, with total payments exceeding Kshs. 1 billion but the 1st respondent has unilaterally and illegally consolidated the facilities, to create a situation of indebtedness;b.The 1st respondent threatened to exercise statutory power of sale over all the charged properties claiming that despite the payments, the debt was still in excess of Kshs. 1 billion. The applicants separately filed several matters to challenge the intended sale, upon being served with the statutory 90 days’ notice under Section 90 of the Land Act;c.The said matters are still pending hearing and determination in the High Court. During the pendency of the said matters and appeals on interlocutory injunction arising therefrom, the 1st respondent presented a deed of settlement to the applicants for execution. According to the deed of settlement, the outstanding debt was Kshs. 1,936,548,732.71 but the 1st respondent was willing to accept Kshs. 875 million, payable in 3 instalments with the last instalment expected within 180 days of execution of the deed of settlement;d.The deed of settlement also required the applicants to withdraw all appeals and suits. It reserved the 1st respondent’s right to exercise the statutory power of sale in the event of non-compliance, upon 14 days’ notice. The deed was to be kept secret and not shared even with the Advocates or the Court;e.The directors were made to believe that there was an outstanding amount and there was imminent risk of all the properties being sold, leading them to execute the deed of settlement dated 10th June 2021;f.Upon signing and being unable to comply with the deed of settlement due to force majeure, the applicants discovered that the alleged amount did not owe under the law due to the in duplum rule (sections 44 and 44A of the Banking Act) and there was no imminent risk of sale of the properties and the deed was made upon undue influence and duress. Further, the respondents advertised the suit properties for sale, without issuing the mandatory statutory notices;g.The applicants filed High Court civil Suit No E943 of 2022, challenging the deed of settlement and intended auction scheduled for 15th December 2021. Together with the plaint, the applicants filed an application for interlocutory injunction dated 6th December 2021. By a ruling delivered on 3rd June 2022, the High Court dismissed the application for injunction;h.Aggrieved, by that decision, the applicants have proffered an appeal against the entire ruling. 3.The motion is opposed by a replying affidavit sworn by Andrew Muchina on 24th November 2025. 4.Muchina, who describes himself as Senior Manager, Legal Department at the 1st respondent bank, depones that the applicants’ appeal is not arguable for the following reasons:a.The matter is res judicata on account of the applicants having filed similar applications for injunction in several suits in the High Court, which were dismissed. These matters are cited as; HCCC No 420 of 2016: Equip Agencies Limited vs I&M Bank Limited, HCCC No 355 of 2016: Grishma Kuma Patel & 2 Others vs I&M Bank Limited and HCCC No 327 of 2016: Unicom Limited v I&M Bank Limited;b.The applicants’ appeals against the rulings by the High Court were withdrawn, pursuant to a deed of settlement dated 10th June 2021, between the Bank and the applicants;c.After withdrawal of the appeals, the High Court entered judgment in two cases with respect to the property known as LR No Gilgil Township Block 1/210 as per the deed of settlement;d.An appeal and application for stay of execution on this judgment remained unprosecuted for three years;e.The applicants proceeded to file numerous applications for injunction in the High Court which were all dismissed;f.The applicants’ application for stay of execution in Civil Application No E103 of 2025: Equip Agencies Limited vs I&M Bank Limited was considered by this Court which by a ruling dated 28th March 2025, returned the verdict that there is no arguable appeal and the matter is res judicata. The Court further held that the appellants’ indebtedness to the Bank cannot be disputed, citing the deed of settlement executed in June 2021 which the Applicants had failed to honour. 5.In light of the foregoing narration, it is argued on behalf of the respondents that the applicants have no arguable appeal as required under rule 5(2)(b) of the Court of Appeal Rules. 6.The respondents further state that even if the appeal was arguable, it will not be rendered nugatory if an injunction is not granted; as the value of the suit properties is known and the bank is a reputable commercial bank which is able to pay any damages in the event the appeal succeeds. 7.The respondents accuse the applicants of blatantly abusing the court process, pointing to the failure to file submissions as directed by the Court, thus delaying prosecution of the application. 8.The respondents further assert the right of the bank to exercise its statutory power of sale as affirmed in several rulings of the High Court enumerated in the foregoing part of this ruling. 9.The respondents submit that the applicants’ failure to settle the debt as agreed in the deed of settlement had led to escalation of the debt to the bank’s detriment. According to the respondents, the outstanding debt is now over Kshs. 2.5 billion. 10.The respondents point out that the applicants have already demonstrated their inability to pay the debt, adding that if an injunction is granted, the bank will not be able to recover the debt. 11.Finally, the respondents submit that the more the bank is delayed in its recovery process, the more the debt escalates due to accrued interest, and if the trend continues unabated, the debt will exceed the securities, causing irreparable loss to the bank. 12.The applicants’ application is brought under rule 5(2)(b) of the Court of Appeal Rules, which provides as follows:2.Subject to subrule (1), the institution of an appeal shall not operate to suspend any sentence or to stay execution, but the Court may-a.…b.in any civil proceedings where a notice of appeal has been lodged in accordance with rule 77, order a stay of execution, an injunction or a stay of any further proceedings on such terms as the Court may think just. 13.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. 14.In its decision in Ishmael Kagunyi Thande vs. Housing Finance Company Limited (Civil Application No 156 of 2006 (UR)) this Court stated the following:“The jurisdiction of the Court under rule 5(2)(b) is not only original but also discretionary. Two principles guide the Court in the exercise of that jurisdiction. The principles are well settled. 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.” 15.This position was restated in Republic vs. Kenya Anti- Corruption Commission & 2 Others [2009] KLR 31 where this Court stated thus:“The law as regards the principles that guide the Court in such an application brought pursuant to rule 5(2)(b) of the rules is now well settled. The Court exercises unfettered discretion which must be exercised judicially. The applicant needs to satisfy the Court, first, that the appeal or intended appeal is not frivolous, that is to say that it is an arguable appeal. Second, the Court must also be persuaded that were it to dismiss the application for stay and later the appeal or intended appeal succeeds, the results or success could be rendered nugatory. In order that the applicant may succeed, he must demonstrate both limbs and demonstrating only one limb would not avail him the order sought if he fails to demonstrate the other limb.” 16.Regarding the limb of arguability of the appeal, the threshold is low; in that even a single point meriting inquiry by the Court would suffice. The applicants in the present application contest the figure presented by the respondents as owing. This, in our view, constitutes an arguable point. Without saying more lest we prejudice the bench that will eventually hear the appeal, we find that the first requirement has therefore been satisfied. 17.Regarding the question whether the appeal would be rendered nugatory if the application is disallowed, we draw guidance from this Court’s decision in Stanley Kang’ethe Kinyanjui vs. Tonny Ketter & 5 Others [2013] eKLR where it was stated that the term ‘nugatory’ must be given its full meaning. In that case, it was held that 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. 18.The respondents have averred, without any substantive rebuttal by the applicants, that the value of the suit properties is known and the 1st respondent is a reputable commercial bank which is able to pay any damages in the event the appeal succeeds. There is also the plausible argument by the respondents that should the prevailing situation continue unabated, the debt could well outstrip the value of the charged properties. On the other hand, if the appeal is determined in the applicants’ favour, an award of damages would adequately compensate them, and we are persuaded that the bank would be in a position to make such amends. In the circumstances, it cannot be said that should the applicants’ intended appeal eventually succeed then it would be rendered nugatory. 19.For the foregoing reasons, the application dated 17th June 2022, is declined with costs to the respondents. DATED AND DELIVERED AT NAIROBI THIS 31ST DAY OF JULY, 2026.W. KORIRJUDGE OF APPEAL....................................L.M. NDOLOJUDGE OF APPEAL....................................A.I. HASSANJUDGE OF APPEALI certify that this is a true copy of the original.SignedDEPUTY REGISTRAR