https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/12628

Icon Hotels Group Africa Ltd v Sevali Investments Ltd & another (Small Claims Appeal E046 of 2026) [2026] KEHC 12628 (KLR) (Civ) (30 July 2026) (Ruling) Neutral citation: [2026] KEHC 12628 (KLR) Republic of Kenya In the High Court at Nairobi (Milimani Law Courts) Civil Small Claims Appeal E046 of 2026 WA Okwany, J July 30, 2026 Between Icon Hotels Group Africa Limited Appellant and Sevali Investments Limited 1st Respondent The Spread Eagle Limited t/a Sagana Getaway Resort 2nd Respondent Ruling 1.The trial court entered judgment in favour of the 1st Respondent against the Appellant on 2nd August 2024. Dissatisfied with the said decision, the Appellant lodged an appeal challenging the decision and subsequently moved this Court seeking stay of execution pending appeal. 2.Interim orders of stay were granted on condition that the Appellant deposits the decretal amount in a joint interest-earning account to be held by counsel for the parties. The Appellant subsequently filed a second application seeking variation of the security condition and requesting permission to substitute the cash deposit with a bank guarantee. 3.The Respondent opposed both applications after which parties were directed to file and exchange written submissions on the said applications which this court has considered alongside the affidavits and annexures. The Appellant's Submissions 4.The Appellant submitted that it has filed an arguable appeal raising substantial questions of law and fact, particularly regarding the existence and scope of a principal-agent relationship between the parties. 5.The Appellant contended that unless stay is granted, execution shall proceed and render the appeal nugatory. 6.The Appellant argued that the decretal amount together with accrued costs and interest exceeds Kshs. 227,000 and that recovery of the same would be difficult if the appeal ultimately succeeds because the 1st Respondent allegedly lacks the financial capacity to refund the monies. 7.The Appellant submitted that the appeal raises weighty and triable issues and further, that the application was filed without unreasonable delay. It added that it is willing to furnish security and that the Respondents will not suffer any prejudice if stay is granted. 8.With respect to security, the Appellant submitted that a bank guarantee provides adequate security and serves the same purpose as a cash deposit. 9.The Appellant urged the Court to exercise its discretion in favour of preserving the appeal and allowing substitution of the deposit requirement with a bank guarantee. The 1st Respondent's Submissions 10.The 1st Respondent opposed both applications and submitted that the Appellant has not satisfied the mandatory requirements for grant of stay under Order 42 Rule 6 of the Civil Procedure Rules. 11.The 1st Respondent emphasized that substantial loss must be proved through evidence and not through speculation or bare assertions. 12.It was submitted that the Appellant merely alleges disruption of business operations without furnishing any documentary evidence. 13.The Respondent pointed out that the Appellant operates a high-end hotel business and has not demonstrated that payment of the decretal amount would cripple its operations. 14.It was submitted that a decree-holder is entitled to enjoy the fruits of judgment. Reliance was placed on Gianfranco Manenthi & Another vs. Africa Merchant Assurance Co. Ltd [2019] eKLR where the Court reiterated that a successful litigant should not be denied the fruits of a judgment without sufficient cause. 15.The Respondent submitted that execution is a lawful process and that mere commencement of execution does not amount to substantial loss. 16.Counsel further relied on James Wangalwa & Another vs. Agnes Naliaka Cheseto [2012] eKLR where the Court held that execution alone does not constitute substantial loss and that an applicant must demonstrate circumstances showing that the appeal would be rendered nugatory. 17.It was submitted that the Appellant has not proved inability to refund the decretal sum if the same is paid. Reference was made to the case of Equity Bank Kenya Ltd vs. Taiga Adams Company Ltd [2006] eKLR where the Court held that substantial loss in monetary decrees is established by showing that the decree-holder would be unable to refund the decretal amount if the appeal succeeds. 18.It was argued that the Appellant has not produced any evidence showing that the Respondent lacks means. 19.The Respondent submitted that the Court had already exercised its discretion by granting conditional stay requiring deposit of the decretal amount yet the Appellant has not complied with that condition and instead seeks to alter the terms. 20.The 1st Respondent contended that such conduct demonstrates lack of good faith and amounts to an attempt to avoid compliance with lawful court orders. 21.On review and variation of the earlier orders, the Respondent submitted that review is governed by Section 80 of the Civil Procedure Act and Order 45 Rule 1 of the Civil Procedure Rules. 22.Reliance was placed on Republic vs. Public Procurement Administrative Review Board & 2 Others [2018] eKLR where the Court held that review is only available where there is discovery of new and important evidence, an apparent error on the face of the record or where there exists any other sufficient reason. 23.The Respondent argued that none of the statutory grounds have been established. 24.It was submitted that the Appellant has neither discovered new evidence nor identified any error on the face of the record. 25.It was further contended that the proposed bank guarantees are questionable because two guarantees bearing the same date were produced and that the discrepancy raises concerns regarding authenticity and reliability. 26.The Respondent therefore urged the Court to dismiss both applications. Analysis and Determination 27.Having considered the material placed before Court, I find that the following issues arise for determination:a.Whether the Appellant has satisfied the requirements for stay of execution pending appeal.b.Whether the Appellant has established grounds for review and variation of the Court's earlier orders.c.What orders should issue. 28.Order 42 Rule 6(2) of the Civil Procedure Rules which provides that no order for stay shall issue unless:i.The Court is satisfied that substantial loss may result to the applicant unless the order is made;ii.The application has been made without unreasonable delay; andiii.The applicant has furnished security for the due performance of the decree. 29.Courts have consistently held that proof of substantial loss is the cornerstone of an application for stay. In James Wangalwa & Another vs. Agnes Naliaka Cheseto, (supra) the Court emphasized that substantial loss must be demonstrated through evidence and not merely alleged. 30.The Appellant contended that execution would occasion substantial loss because the Respondent may be unable to refund the decretal sum if the appeal succeeds. I however note that beyond that allegation, no financial statements, investigations, affidavits of means, or other evidence have been presented to establish the Respondent's inability to refund the decretal sum. 31.This Court agrees with the Respondent that a mere assertion that a decree-holder lacks means is insufficient to warrant a stay. The Court nevertheless recognizes that the Appellant has lodged an appeal and that the right of appeal should not be rendered illusory where reasonable security can adequately protect the decree-holder. 32.I find that the application was filed within a reasonable period after judgment and therefore satisfies the second limb of Order 42 Rule 6. 33.The dispute therefore narrows to the issue of security. 34.On review of the stay conditions, the governing law is found under Section 80 of the Civil Procedure Act and Order 45 Rule 1 of the Civil Procedure Rules which limit review jurisdiction to specific circumstances, namely; the discovery of new and important evidence, any apparent error on the face of the record or any other sufficient reason warranting review. 35.The instant application essentially invites the Court to reconsider its earlier exercise of discretion regarding security. I am not persuaded that the reason advanced by the Applicant is a proper basis for review. I am guided by the reasoning in Republic vs. Public Procurement Administrative Review Board & 2 Others [2018] eKLR where it was held that review is not an avenue for a dissatisfied litigant to re-argue matters already determined. 36.Accordingly, I find that the prayer for review and variation of the security lacks merit. 37.On whether a bank guarantee should substitute the deposit requirement, this Court notes it deliberately ordered deposit of the decretal sum in a joint interest earning account when conditional stay was granted. I am of the view that such security protects both parties as it secures the decretal amount, preserves accrued interest and eliminates disputes regarding enforceability of bank guarantees. 38.In the instant case, I find that no compelling reason has been presented to warrant departure from the earlier order. The Appellant has not demonstrated inability to comply with the deposit order. Indeed, the Appellant had initially represented to the Court that it was willing and able to furnish security. 39.I therefore find no justification for substituting the deposit requirement with a bank guarantee. 40.In conclusion, I make the following orders:a.The application seeking review and variation of the Court's order requiring deposit of the decretal sum is dismissed.b.The order requiring deposit of the decretal amount in a joint interest-earning account in the names of counsel for the parties is hereby upheld.c.The Appellant shall comply with the said order within twenty one (21) days from the date hereof.d.In default of compliance, the conditional stay granted earlier shall automatically lapse.e.Upon compliance, there shall be a stay of execution pending hearing and determination of the appeal.f.Costs of both applications shall be borne by the Appellant. DATED, SIGNED AND DELIVERED VIRTUALLY THIS 30TH DAY OF JULY 2026HON W A OKWANYJUDGE