https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/6958

Greenbelt Logistics Ltd v Enrustfirm Investment Ltd (Civil Appeal E198 of 2025) [2026] KEHC 6958 (KLR) (20 May 2026) (Ruling) Neutral citation: [2026] KEHC 6958 (KLR) Republic of Kenya In the High Court at Machakos Civil Appeal E198 of 2025 NIO Adagi, J May 20, 2026 Between Greenbelt Logistics Limited Appellant and Enrustfirm Investment Limited Respondent Ruling 1.This ruling is on the Appellant/Applicants’ application by way of Notice of Motion dated 26th November 2025 seeking for orders:a.Spentb.That pending the hearing and determination of this Application interpartes, there be temporary stay of execution of decree arising from the Judgment delivered on the 18-07-2025 and the Ruling of 13-11-2025 by Honourable M. Nanzushi, SPM Magistrate in Mavoko CMCC E 035 of 2024 and subsequent orders thereof.c.That pending the hearing and determination of the appeal interpartes, there be temporary stay of execution of decree arising from the Judgment delivered on the 18-07- 2025 and the Ruling of 13-11-2025 by Honourable M. Nanzushi, SPM Magistrate in Mavoko CMCC E 035 of 2024 and subsequent orders thereof.d.That cost of this Application be in the cause. 2.The application is supported by the Supporting Affidavit of Abdiweli Diriye Santur the Director of the Applicant/Appellant sworn on 26th November 2025 and is based on the grounds on the face of the application as follows:a.The Magistrate's Court in Milimani in Mavoko CMCC E035 of 2025 delivered a Ruling on the 13-11-2025 wherein the respondent was awarded a sum of Kshs.150,000 as exemplary damages an award the appellant has challenged in the appeal.b.The appellant having been aggrieved by the said judgment of 18th July,2025 has filed an appeal before this court which is listed for directions on the 15-01-2026c.The applicant contend that the awarded exemplary damages are erroneous and not in tandem with the principles on award of exemplary damages and have as a consequence filed a Memorandum of appeal seeking to set aside the said judgment.d.Therefore, the appeal is not frivolous and it raises arguable grounds with high chances of success.e.In the meantime, and in a bid to defeat the pending appeal, the respondent has moved with speed and instructed the firm of Direct "O" Auctioneers who have secured warrants of attachment and sale of movable property in execution of decree for money.f.If the intended execution is not stayed pending hearing of the Appeal, the applicant will be condemned to satisfy a judgment that was arrived at through application of wrong legal principles and hence will suffer loss and prejudice.g.Further, the financial means or whereabouts of the respondents are unknown and if the appeal succeeds there is doubt that they will be able to refund the amount.h.The balance of convenience clearly weighs in favour of the Applicant in this matter owing to the overwhelming evidence on record.i.The application has been filed without unreasonable delay.j.The applicant is ready to abide by the directions of the Honourable Court as to furnishing of security pending the hearing of the appeal. 3.In opposition to the said application, the Respondent Antony Wangombe Nderitu filed a Replying Affidavit sworn on 16th December 2025 and sought for Applicant’s notice of motion to be dismissed for reasons that;a.Based on the information by the Respondent’s Advocates on record, the Appellant herein must satisfy the provisions under Order 42 Rule 6(2(b) of the Civil Procedure Rules, in that the applicant should give such security as the court orders for the due performance of such decree or order as may ultimately be binding on them.b.the Appellant herein has failed to fulfill the requirements under Order 42 Rule 6(2) as it has not provided any security to the respondent.c.the Appellant's aim is to cause prolonged delay in satisfying the Court's judgment herein in CMCC No. E035 of 2025- Mavoko and the same will cause more loss as the consignment of wooden logs which was the subject of the primary suit continues to completely waste away (decay) thus leaving the respondent with no recourse.d.be it as it may, the Court should impose conditions for security to prevent prolonged delay of the appeal that may be used as a tactic by the Appellant to continue to cause hardships to the respondent in the unlikely event that this application is successful.e.the applicant's application should be dismissed with costs to the Respondent or at the very least be allowed on condition that the half decretal sum be paid to the Respondent. 4.Directions were given for the application to be canvassed through written submissions. The Applicant’s submissions are dated 9th March 2026 whilst the Respondent’s opted not to file submissions but to rely on the replying affidavit as filed. Those submissions and the replying affidavit replicate the summary above and I wish not to duplicate the same here. Analysis and Determination 5.I have carefully perused and considered the application, the supporting affidavit, the replying affidavit and the applicant’s submissions as well as the judicial decisions relied upon. In my view, the issues for determination are as follows:-a.Whether the Applicant/Appellant has met the criteria for grant of orders of stay pending Appeal.b.Who shall bear costs of the application? a. Whether the Applicant/Appellant has met the criteria for grant of orders of stay pending Appeal. 6.The law relating to stay pending Appeal is Order 42 Rule 6 (2). It is also important to state that the power to grant an order of stay is discretionary and is dependent on certain conditions being met. Order 42 rule 6(1) and (2) of the Civil Procedure Rules, 2010 provides as follows:“(1)No appeal or second appeal shall operate as a stay of execution or proceeding 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, and whether the application for such stay shall have been granted or refused by the court appealed from, the court to which such appeal is preferred shall be at liberty, on application being made, to consider such application and to make such order thereon as may to it seem just, and any person aggrieved by an order of stay made by the court from whose decision the appeal is preferred may apply to the appellate court to have such order set aside.(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.” 7.In Vishram Ravji Halai v Thornton & Turpin Civil Application No. Nai. 15 of 1990 [1990] KLR 365, the Court of Appeal held that whereas the Court of Appeal’s power to grant a stay pending appeal is unfettered, the High Court’s jurisdiction to do so under Order 41 rule 6 of the Civil Procedure Rules is fettered by three conditions namely:i.establishment of a sufficient cause,ii.satisfaction of substantial loss andiii.the furnishing of security.Further the application must be made without unreasonable delay. 8.In Butt v Rent Restriction Tribunal [1979], the Court of Appeal gave pointers on what ought to be considered in determining whether to grant or refuse stay of execution pending appeal. The court stated thus:i.The power of the court to grant or refuse an application for a stay of execution is a discretionary, and the discretion should be exercised in such a way as not to prevent an Appeal.ii.The general principle in granting or refusing a stay is, if there is no other overwhelming hindrance, a stay must be granted so that an Appeal may not be rendered nugatory should the Appeal court reverse the judge’s discretion.iii.Thirdly, a judge should not refuse a stay if there are good grounds for granting it merely because, in his opinion, a better remedy may become available to the Applicant at the end of the proceedings.iv.Finally, the court in exercising its discretion whether to grant or refuse an application for stay will consider the special circumstances of the case and its unique requirements. 9.On the first criterion as set out in Order 42 Rule 6 (2) i.e. Whether Applicant/Appellant has brought this application without unreasonable delay. The trial court’s Judgment was delivered on the 18th July 2025 and the Ruling on 13th November 2025. The Memorandum of Appeal dated 18th August 2025 was filed on the same date. The instant application dated 26th November 2025 was also filed in court on the even date, which was after about eight (8) days after the ruling. In the circumstances, I find that application has been brought without unreasonable delay. 10.On second criterion as to whether the Applicant/Appellant has demonstrated that he is bound to suffer substantial loss if orders of stay of execution are not granted. The question that follows is what comprises substantial loss. In Silverstein v Chesoni (2002)1 KLR 867 it was held that“The issue of substantial loss is the cornerstone of both jurisdictions. Substantial loss is what has to be prevented by preserving the status quo because such loss would render the Appeal nugatory” 11.The Appellant/Applicant has deposed that the if stay of execution is not granted, the Appellant will be highly prejudiced as this appeal against the Respondent will be rendered nugatory and that the Respondent’s financial position is unknown to the Appellant. It will be impossible to recover any amount paid to the Respondent in the event that the Appeal is successful. 12.The court is under a duty to hold the rings of justice even handed; it should not offer any illegitimate advantage to either party. The Appellant/Applicant appeals to this Honourable Court to grant the order of stay to enable the Applicant an opportunity to be heard on its Appeal. 13.In James Wangalwa & Another v Agnes Naliaka Cheseto [2012] eKLR, it was held that:“No doubt, in law, the fact that the process of execution has been put in motion, or is likely to be put in motion, by itself, does not amount to substantial loss. Even when execution has been levied and completed the attached properties have been sold, as is the case here, does not in itself amount to substantial loss under Order 42 Rule 6 of the CPR. This is so because execution is a lawful process. The applicant must establish other factors which show that the execution will create a situation that will irreparably affect or negate the very essential core of the applicant as the successful party in the appeal ... the issue of substantial loss is the cornerstone of both jurisdictions. Substantial loss is what must be prevented by preserving the status quo because such loss would render the appeal nugatory." 14.In response to the Applicant’s assertions, the Respondent avers that the Appellant herein has failed to fulfill the requirements under Order 42 Rule 6(2) as it has not provided any security to the Respondent. The Respondent argues that the Applicant's application should be dismissed with costs to the Respondent or at the very least be allowed on condition that the half decretal sum be paid to the Respondent 15.The Appellant/Applicant has a duty to demonstrate facts, and not merely to allege that the Respondent’s financial position and economic status is unknown to the Appellant therefore it will be impossible to recover any amount paid to the Respondent in the event that the Appeal is successful. Indeed, on a similar issue in Isaac Muteti Kisua v Felix Mwangi Ndegwa [2016] eKLR the Court rendered itself thus:“This Court finds that the Applicant from the reading of the above quoted provisions has the burden to demonstrate that he would suffer "substantial loss" and not just loss unless stay of execution is granted. I am not convinced that the burden of demonstrating financial means is the other way round as submitted by the Applicant. Looking at the authorities quoted, especially by the Respondent and the provisions of the quoted rules it is clear that an applicant has a duty to demonstrate that a substantial loss may result to him/her unless an order of stay is made”. 16.Similarly, in Socfinac Company Limited v Nelphat Kimotho Muturi[2013] eKLR Odunga J, held as follows:“The appellant's belief that the respondent will be unable to repay the same is solely based on the appellant's lack of knowledge as to the respondent's financial ability or capability. In my view, the mere fact that an appellant does not know the respondent's financial capability does not give rise to the presumption that the respondent will be unable to repay the sum. There must be other factors that lead to that presumption. On the material before the court. I am not satisfied that the appellant has shown that it stands to suffer substantial loss if the stay sought is not granted." 17.Further, Radido J at paragraphs 16 - 18 in Van Den Berg (k) Limited v Charles Osewe Osodo[2015] eKLR rendered himself thus:“16.I have carefully perused the supporting affidavit sworn by Isaac M. Wamaasa and I have not been able to decipher what substantial loss the Appellant would suffer if stay were not grant.17.The closest contention is that the Respondent is a man of straw who has not demonstrated that he could refund the decretal sum. 18. The position as urged by the Appellant on this point cannot be correct. It is not a burden placed upon decree holders to prove that they can refund the decretal sum. It is the appellant who alleges that the decree holder is a man of straw to demonstrate that fact." 18.In granting an order of stay of execution, the court should not be seen to interfere with a party's enjoyment of the fruit of the judgment. See the case of Stephen Wanjohi v Central Glass Industries Ltd. Nairobi HCCC No.6726 of 1991 where the court stated as follows: -“The financial ability of a decree-holder solely is not a reason for allowing stay, it is enough that the decree-holder is not a dishonourable miscreant without any form of income. Suffice to state that the respondent, at this moment, is the successful party and in order to deny him the fruits of his success, it is upon the applicant to prove that he is unlikely to make good whatever sum he may have received in the meantime." 19.The loss the Appellant has alluded to is that the appeal herein will be rendered nugatory should the stay order be declined. It is my considered view that this being a monetary claim, any loss to be suffered by either party can adequately be compensated by an award in damages. The Applicant has not shown by evidence through an affidavit that the Respondent is incapable of refunding the decretal sums should the appeal succeed. 20.On the third criterion where the Applicant/Appellant must furnish security for the due performance of the decree. I am fully aware that the court has a delicate task of balancing the interests of both the Appellant and the Respondent. The Appellant who seeks to preserve the status quo pending the hearing of the Appeal so that his Appeal is not rendered nugatory and the interest of the Respondent who is seeking to enjoy the fruits of his judgement. It is true that under Order 42 rule 6 aforesaid, the Applicant is required to offer security for the due performance of the decree and the Court is entitled to take into account the fact that no such security has been offered in deciding an application thereunder. I agree with the position in Mwaura Karuga t/a Limit Enterprises.v Kenya Bus Services Ltd & 4 Others [2015] eKLR, where it was held that:“… the security must be one which shall achieve due performance of the decree which might ultimately be binding on the applicant. The rule does not, therefore, envisage just any security. The words "ultimately be binding" are deliberately used and are useful here, for they refer to the entire decree as will be payable at the time the appeal is lost. That is the presumption of law here. Therefore, the ultimate decree envisaged under order 42 rule 6 (2) (b) of the Civil Procedure Rules includes costs and interest on the judgment sum unless the latter two were not granted-which is seldom. The security to be given is measured on that yardstick.” 21.I also associate myself with the holding in Gianfranco Manenthi & another v Africa Merchant Assurance Company Ltd [2019] eKLR, where the court observed:“… 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.Further, order 42 should be seen from the point of view that a debt is already owed and due for payment to the successful litigant in a litigation before a court which has delivered the matter in his favour. This is therefore to provide a situation for the court that if the appellant fails to succeed on appeal there could be no return to status quo on the part of the plaintiff to initiate execution proceedings where the judgement involves a money decree. The court would order for the release of the deposited decretal amount to the respondent in the appeal … This the objective of the legal provisions on security was never intended to fetter the right of appeal. It was also put in place to ensure that courts do not assist litigants to delay execution of decrees through filing vexatious and frivolous appeals. In any event, the issue of deposit of security for due performance of decree is not a matter of willingness by the applicant but for the court to determine.” 22.The law is that where the Applicant intends to exercise its undoubted right of appeal, and in the event, it were eventually to succeed it should not be faced with a situation in which it would find itself unable to get back its money. Likewise, the Respondent who has a decree in his favour should not, if the applicant were eventually to be unsuccessful in its intended appeal, find it difficult or impossible to realize the decree. This is the cornerstone of the requirement for security. The issue of adequacy of security was dealt with by the Court of Appeal in Nduhiu Gitahi v Warugongo [1988] KLR 621; 1 KAR 100; [1988-92] 2 KAR 100 where the Court of Appeal expressed itself as follows:“The process of giving security is one, which arises constantly. So long as the opposite party can be adequately protected, it is right and proper that security should be given in a way, which is least disadvantageous to the party giving the security. It may take many forms. Bank guarantee and payment into court are but two of them. So long as it is adequate, then the form of it is a matter, which is immaterial. In an application for stay pending appeal the court is faced with a situation where judgement has been given. It is subject to appeal. It may be affirmed or it may be set aside. The court is concerned with preserving the rights of both parties pending that appeal. It is not the function of the court to disadvantage the defendant while giving no legitimate advantage to the plaintiffs. It is the duty of the court to hold the ring even-handedly without prejudicing the issue pending the appeal. For that purpose, it matters not whether the plaintiffs are secured in one way rather than another. It would be easier for the defendants or if for any reason they would prefer to provide security by a bank guarantee rather than cash. There is absolutely no reason in principle why they should not do so. The aim of the court in this case was to make sure, in an even-handed manner, that the appeal would not be prejudiced and that the decretal sum would be available if required. The respondent is not entitled, for instance, to make life difficult for the applicant, so as to tempt him into settling the appeal. Nor will either party lose if the sum is actually paid with interest at court rates. Indeed, in this case there is less need to protect the defendant because nearly half the sum will have been paid and the balance was at one stage open to negotiation to reduce it”. 23.The Appellant avers that it is ready to abide by the directions of the Honourable Court as to furnishing of security pending the hearing of the appeal. 24.On the whole, this court is of the view that the memorandum of appeal filed herein carries weighty or substantial grounds to justify a stay of execution. b) Who should bear the cost of this application? 25.On the question of costs of the application, the general rule is that costs shall follow the event in accordance with the provisions of Section 27 of the Civil Procedure Act (Cap. 21). A successful party should ordinarily be awarded costs of an action unless the court, for good reason, directs otherwise. See Jasbir Singh Rai & 3 Others v Tarlochan Singh Rai & 4 others SC. Petition No. 4 of 2012: [2014] eKLR. The Supreme Court held that costs follow the event and that the Court has the discretion in awarding such costs. 26.Consequently, I do find that the Appellant/Applicant is entitled to pursue its appeal on merit. I do allow the application dated 26th November 2025 and make the following orders:-1.The Appellant/Applicant shall compile, file and serve the Record of Appeal within Forty-Five (45) days of this ruling in default, appropriate directions shall be given on the matter including dismissal of the appeal.2.Execution of the Judgment/decree in Mavoko CMCC E 035 of 2024 and subsequent orders thereof is hereby stayed pending the hearing and determination of the appeal on condition that the Appellant/Applicant shall deposit the entire decretal amount into court OR into a joint interest earning Bank account to be opened in a reputable Bank in the names of the parties’ Advocates’ law firms on record within fifteen (15) days hereof in default the Respondent will be at liberty to execute.3.The Appellant Applicant shall pay to the Respondents throw away costs of this application assessed at Kshs.20,000/= as well as any Auctioneers official charges so far incurred herein.4.A mention date to be fixed to confirm compliance with order 1, 2, and 3 above and for further directions.It is hereby so ordered. RULING WRITTEN, DATED & SIGNED AT MACHAKOS THIS 20TH MAY 2026NOEL ADAGIJUDGE DELIVERED VIRTUALLY ON TEAMS AT MACHAKOS THIS 20TH MAY 2026