https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/7431

Freight in Time Limited v Moran Auctioneers & 3 others (Commercial Appeal E261 of 2025) [2026] KEHC 7431 (KLR) (Appeals) (28 May 2026) (Ruling) Neutral citation: [2026] KEHC 7431 (KLR) Republic of Kenya In the High Court at Nairobi (Milimani Commercial Courts) Appeals Commercial Appeal E261 of 2025 MO Ado, J May 28, 2026 Between Freight In Time Limited Appellant and Moran Auctioneers Respondent and I & M Bank Limited 1st Interested Party Office Technologies Limited 2nd Interested Party Mitsumi Computer Garage Limited 3rd Interested Party Ruling 1.The dispute before Court arises from execution proceedings undertaken pursuant to a decree issued in Nairobi HCCC No. 367 of 2016, Mitsumi Computer Garage Limited v Freight In Time Limited, in favour of the 3rd Interested Party against the Appellant/Applicant, Freight In Time Limited. The decree remained unsatisfied, and the Respondent, Moran Auctioneers, was instructed to execute the decree through attachment and sale of the Applicant’s movable assets. 2.In the course of execution, the Respondent proclaimed and attached various movable assets belonging to the Applicant, including motor vehicles and office equipment. The Applicant contended that some of the attached assets were jointly owned with the 1st Interested Party, I & M Bank Limited, while others belonged to the 2nd Interested Party, Office Technologies Limited. 3.Consequently, the Applicant instituted proceedings before the Chief Magistrate’s Court at Milimani, being CMCCOMMSU/E1253/2025, seeking, inter alia, to challenge the attachment and protect the attached assets from sale. The Applicant described the proceedings as objector proceedings brought under Order 22 Rule 51 of the Civil Procedure Rules for protection of third-party interests in the attached property. 4.Together with the subordinate court proceedings, the Applicant sought interim preservatory orders restraining the Respondent from proceeding with the intended auction. On 9th September 2025, the subordinate court granted interim orders preserving the status quo pending inter partes hearing of the application. 5.The Respondent and the 3rd Interested Party opposed the application and raised a Preliminary Objection challenging the jurisdiction of the subordinate court to entertain the proceedings. They argued that the execution arose from a decree of the High Court and, by virtue of section 34 of the Civil Procedure Act, all questions relating to execution, discharge, or satisfaction of the decree could only be determined by the High Court that issued the decree. 6.The Respondent and the 3rd Interested Party further contended that the proceedings were res judicata and amounted to an abuse of the court process on account of previous applications for stay and related proceedings before the High Court and the Court of Appeal touching on the same decree and execution process. 7.The application came up for inter partes hearing before Hon. H. M. Ng’ang’a, Principal Magistrate, on 23rd September 2025. Upon considering the application, the annexed notifications of sale, and the Preliminary Objection, the learned magistrate discharged the interim orders earlier issued on 9th September 2025. The learned magistrate observed that the notifications of sale related to execution of a decree issued by the High Court in HCCC No. 367 of 2016 and questioned why stay of execution was being sought before the subordinate court. The learned magistrate further noted that any objection proceedings ought procedurally to have been filed before the court issuing the decree. 8.Aggrieved by the ruling and orders of the subordinate court delivered on 23rd September 2025, the Applicant lodged the present appeal to this Court, and contemporaneously filed the Notice of Motion dated 30th September 2025 seeking, inter alia, stay of execution of the ruling and orders of the subordinate court, an injunction restraining sale of the attached assets pending appeal, and stay of proceedings before the subordinate court. 9.The Motion is opposed through the Replying Affidavit sworn by Lawrence Momanyi on behalf of the Respondent and the 3rd Interested Party, together with their written submissions and a Notice of Preliminary Objection. 10.The Respondent and 3rd Interested Party agree with the finding of Hon. H. Nganga that the subordinate court lacked jurisdiction to entertain the objector proceedings as the execution emanated from a decree issued in HCCC No. 367 of 2016. 11.They further contend that the present proceedings are res judicata, amount to an abuse of the court process, and that the Applicant has failed to satisfy the conditions for grant of stay under Order 42 Rule 6 of the Civil Procedure Rules. 12.The Application was canvassed by way of written submissions. The Applicant filed submissions dated 15th January 2026, whilst the Respondent and 3rd Interested Party filed joint submissions dated 3rd February 2026. Analysis and Determination 13.Having carefully considered the Motion, affidavits, submissions and authorities relied upon by the parties, the issues arising for determination are:i.Whether the appeal and application are incompetent for want of jurisdiction;ii.Whether the Applicant has satisfied the conditions for grant of stay pending appeal;iii.Whether stay of proceedings should issue. Whether the proceedings are incompetent for want of jurisdiction 14.The Respondent and the 3rd Interested Party argued that all questions relating to execution, discharge, and satisfaction of the decree ought to have been determined exclusively by the High Court, which issued the decree in HCCC No. 367 of 2016. They rely on section 34 of the Civil Procedure Act and contend that the subordinate court lacked jurisdiction ab initio. 15.The Applicant, on the other hand, contended that the proceedings before the subordinate court were objector proceedings brought under Order 22 Rule 51 of the Civil Procedure Rules and that such proceedings were intended to protect third-party interests in attached property. 16.At this interlocutory stage, the Court is not called upon to finally determine the appeal. The Court must only determine whether the appeal is arguable and whether the Applicant has met the threshold for stay. 17.I have perused the record placed before the Court. The learned magistrate in his ruling observed that the notifications of sale related to execution of a decree issued by the High Court in HCCC No. 367 of 2016 and questioned why stay of execution was being sought before the subordinate court. The learned magistrate further observed that, procedurally, any objection proceedings ought to have been filed before the court issuing the decree. 18.Whether or not the subordinate court had jurisdiction is plainly an arguable point deserving interrogation on appeal. However, the existence of an arguable appeal alone is insufficient to warrant an order of stay from this Court. The Applicant must still satisfy the conditions under Order 42 Rule 6 of the Civil Procedure Rules. Whether the Applicant has satisfied the conditions for stay 19.The applicable principles are settled. Under Order 42 Rule 6(2) of the Civil Procedure Rules, an applicant must demonstrate that substantial loss may result unless stay is granted; that the application has been made without unreasonable delay; and that security has been furnished for the due performance of the decree. 20.The Court of Appeal in Kenya Shell Ltd v Kibiru & Another [1986] KLR 410 held that substantial loss is the cornerstone of an application for stay. Likewise, in James Wangalwa & Another v Agnes Naliaka Cheseto [2012] eKLR, the Court held that mere commencement of execution does not by itself constitute substantial loss. 21.In the present case, the Applicant asserts that some of the attached assets are jointly owned with the 1st Interested Party, while others belong to the 2nd Interested Party. The supporting affidavit annexes documents intended to demonstrate such interests. 22.The Court accepts that sale of property alleged to belong to third parties may occasion prejudice if undertaken before determination of ownership claims. However, the Applicant was still required to demonstrate the specific and irreparable nature of the alleged loss and, importantly, to comply with all the statutory requirements for stay. 23.On the question of delay, the impugned ruling was delivered on 23rd September 2025, while the Motion was filed on 30th September 2025. There was therefore no unreasonable delay. 24.The difficulty with the application lies in the complete absence of any proposal for security. 25.The Respondent and the 3rd Interested Party correctly submit that neither the Motion, the supporting affidavit, nor the submissions contain any offer for security. The requirement for security is not optional. It is a mandatory statutory condition intended to balance the right of appeal with the right of a successful litigant to enjoy the fruits of judgment. 26.The Court of Appeal in Afyare Enterprises Company Ltd v Nyaribo t/a I.N. Nyaribo & Co. Advocates [2025] KECA 1819 (KLR) emphasized that the conditions under Order 42 Rule 6 are couched in mandatory terms and must be complied with before an order stay can issue. 27.The decree sought to be executed arises from a judgment delivered in 2021 and remains unsatisfied. The Applicant seeks to suspend execution without offering any form of protection to the decree-holder. 28.The Court cannot ignore the mandatory provisions of Order 42 Rule 6(2). Failure to furnish or at least propose security is fatal to the application. Whether stay of proceedings should issue 29.The Applicant also seeks stay of proceedings before the subordinate court. 30.Stay of proceedings is a grave judicial action which interferes with the ordinary course of litigation and should only issue in exceptional circumstances. The Applicant has not demonstrated any exceptional circumstance warranting the halting of proceedings before the subordinate court. Indeed, the issues raised before that court, including the objection proceedings and jurisdictional questions, are matters capable of being addressed in the ordinary course. 31.The Court of Appeal in Bulle v Mehta International Ltd & another [2023] KECA 554 (KLR), stated as follows on the question:“In conclusion, we find nothing to suggest that the proceedings sought to be stayed are frivolous, vexatious or harassing, or to be manifestly groundless. Moreover, the circumstances of this case do not call for such stringent orders as to stay proceedings in the superior court. We need not overemphasise the fact that stay of proceedings is a grave judicial action which seriously interferes with the right of a litigant to conduct his or her case. That explains why the test for stay of proceedings is high and stringent, and why this Court’s power to grant such orders should be exercised sparingly.” 32.Further, the Court notes the multiplicity of proceedings surrounding the execution process, including proceedings before the High Court and Court of Appeal, as highlighted by the Respondent and the 3rd Interested Party. The interests of justice favour expeditious determination rather than further suspension of proceedings. 33.In the circumstances, I am not persuaded that the Applicant has met the threshold for grant of stay of proceedings. 34.Accordingly, the Notice of Motion dated 30th September 2025 lacks merit and is hereby dismissed. 35.The interim orders previously granted by this Court are hereby discharged. 36.Costs of the application shall be borne by the Appellant/Applicant and are awarded to the Respondent and the 3rd Interested Party. 37.It is so ordered. DATED, SIGNED, AND DELIVERED AT NAIROBI THIS 28TH DAY OF MAY 2026HON. MR. JUSTICE MOSES ADO JUDGE OF THE HIGH COURTIn the Presence of:Moses C/AJabeya h/b for Wachira………………for the ApplicantNdegwa……………for the Respondent