https://new.kenyalaw.org/akn/ke/judgment/keelc/2026/3714

**** **REPUBLIC OF KENYA** **IN THE ENVIRONMENT AND LAND COURT AT NAIROBI** **MILIMANI LAW COURTS** **ELC APPEAL NO. E057 OF 2026** **KENPHY INVESTMENT LIMITED ........................................ APPELLANT/APPLICANT** **-VERSUS-** **HAKASA PROPERTIES LIMITED ...........................................................RESPONDENT** **RULING** 1. By a Notice of Motion dated **30th March 2026**, the Appellant/Applicant sought the following orders: 2. **Spent.** 3. **THAT pending the hearing of this application inter parties this Honourable Court be pleased to stay the execution of the Ruling and order in Nairobi BPRT CASE NO E1423 OF 2025 KENPHY INVESTMENT LIMITED VERSUS HAKASA PROPERTIES LIMITED.** 4. **THAT pending the hearing and determination of the intended appeal herein this Honourable Court be pleased to stay the execution of the Ruling and order in Nairobi BPRT CASE NO E1423 OF 2025 KENPHY INVESTMENT LIMITED VERSUS HAKASA PROPERTIES LIMITED.** 5. **THAT cost of this Application be borne by the Respondent.** 6. The application was premised on the grounds appearing on the face of the Motion and supported by the affidavit of **Euphantus Mukono**, a Director of the Appellant. The Applicant deponed that it has been a tenant on the premises known as **Lunga Lunga Road Plot Number LR 209/8850** since the year 2000, where it operates a parking lot business and engages in the purchase and sale of used oil. It was averred that the Applicant has consistently paid monthly rent of **Kshs. 260,000/=** and has occupied the premises for over two decades, thereby establishing a longstanding tenancy relationship with the Respondent. 7. The Applicant further contended that in December 2025 the Respondent threatened to evict it from the suit premises and subsequently issued a letter requiring it to vacate. Aggrieved by the Respondent’s actions, the Applicant lodged **Nairobi BPRT Case No. E1423 of 2025, Kenphy Investment Limited versus Hakasa Properties Limited,** before the Business Premises Rent Tribunal. Although interim orders were initially granted in its favour, the Tribunal subsequently delivered a ruling on **23rd February 2026** directing the Applicant to give vacant possession of the premises to the Respondent on or before **31st March 2026**. The Applicant stated that it was dissatisfied with that decision and intended to challenge it on appeal. 8. According to the Applicant, the Tribunal erred in law by failing to consider that the Respondent had not served a **Landlord’s Notice to Terminate Tenancy** in the prescribed form as required under **Section 4 of the Landlord and Tenant (Shops, Hotels and Catering Establishments) Act, Cap. 301**. The Applicant maintained that the omission was fatal and rendered the intended termination unlawful. It was further asserted that the Tribunal disregarded the Applicant’s pleadings and evidence despite finding that the premises constituted a controlled business tenancy falling within its jurisdiction. The Applicant therefore argued that the intended appeal was arguable and had high chances of success. 9. The Applicant also expressed apprehension that the Respondent was poised to execute the Tribunal’s orders and proceed with eviction. In support of this apprehension, it was deponed that the Respondent had already rejected rent payments tendered by the Applicant and returned its rent cheque, thereby demonstrating an intention to treat the tenancy as terminated. The Applicant averred that unless an order of stay of execution was granted, it stood to suffer substantial and irreparable loss through the loss of its business premises and source of livelihood. It was therefore urged that the interests of justice warranted the grant of interim relief pending the hearing and determination of the intended appeal. **The Response** 1. The Respondent opposed the application through the Replying Affidavit sworn by **Rajesh Kantilal Raja**, a director of the Respondent company. He deponed that the application was **frivolous, vexatious, unmeritorious and founded on material non-disclosure of material facts**. He stated that the Respondent is the registered proprietor of **L.R. No. 209/8850 situated at Lunga Lunga Industrial Area, Nairobi,** and that the Appellant occupied an open yard on the property pursuant to a series of **fixed-term tenancy agreements**. According to the Respondent, the Appellant's occupation was governed by written tenancy agreements renewed from time to time and not by a continuous tenancy dating back to the year 2000 as alleged by the Appellant. 2. The Respondent further averred that it intended to redevelop the suit property by constructing additional godowns and had, as early as the year **2022**, communicated its redevelopment plans to the Appellant. It was deponed that despite those plans, the Respondent granted the Appellant several extensions of its tenancy, including a final extension up to **31st December 2025**, to afford it sufficient time to secure alternative premises. The Respondent asserted that the Appellant was repeatedly reminded through letters, meetings and other correspondence that the tenancy would expire on the said date and denied that there had been any unlawful threats of eviction. 3. The Respondent stated that upon the Appellant instituting proceedings before the **Business Premises Rent Tribunal in BPRT Case No. E1423 of 2025**, the Tribunal heard both parties and rendered its ruling, finding that the tenancy had expired on **31st December 2025**. Consequently, the Tribunal ordered the Appellant to vacate the suit premises by **31st March 2026**. The Respondent contended that there is presently **no valid tenancy subsisting between the parties**, that the Appellant's continued occupation of the premises is unlawful, and that the Respondent requires vacant possession of the property to facilitate its intended redevelopment project. 4. On the Appellant's complaint regarding the absence of a statutory notice, the Respondent maintained that no notice under **Section 4 of the Landlord and Tenant (Shops, Hotels and Catering Establishments) Act, Cap. 301** was required because the tenancy was not being terminated but had expired by **effluxion of time** upon the lapse of the agreed contractual term on **31st December 2025**. The Respondent further asserted that the Appellant had failed to vacate despite being granted ample time to relocate and had also failed to settle rent for the period authorized by the Tribunal. For those reasons, the Respondent urged the Court to find that both the application and the intended appeal are devoid of merit and ought to be dismissed with costs. **SUBMISSIONS** 1. The application was disposed of by way of written submissions. Counsel for the Applicant submitted that the Tribunal erred in law by ordering the Applicant to vacate the suit premises despite the Respondent's failure to issue a **Notice to Terminate Tenancy** in the prescribed form under **Section 4 of Cap. 301**. It was further argued that the Applicant was a protected tenant and that the intended appeal raised arguable issues with high chances of success. 2. Counsel identified the issue for determination as whether the Applicant had satisfied the requirements for the grant of **stay of execution pending appeal**. Reliance was placed on **Giella Vs Cassman Brown & Co. Ltd [1973] EA 358**, and it was submitted that the Applicant had established a prima facie case, was likely to suffer substantial loss through eviction and loss of livelihood, and was willing to continue paying rent and provide security pending the hearing and determination of the appeal. The Court was therefore urged to allow the application as prayed. 3. The Respondent likewise filed written submissions opposing the application. Counsel identified the issues for determination as whether the Applicant had satisfied the conditions for the grant of **stay of execution pending appeal**, namely proof of substantial loss, absence of unreasonable delay, and provision of security as required under **Order 42 Rule 6(2) of the Civil Procedure Rules**. Reliance was placed on **Githau Vs Kagiri & Another (Civil Appeal No. 314 of 2023) [2024] KEHC 6320 (KLR)**, **James Wangalwa & Another Vs Agnes Naliaka Cheseto [2012] eKLR**, and **Machira t/a Machira & Co. Advocates Vs East African Standard [2002] KEHC 1167 (KLR)**. 4. Counsel submitted that the Applicant had failed to demonstrate substantial loss, had not offered security, and had filed the application after undue delay. It was further argued that the tenancy had expired on **31st December 2025** by effluxion of time and that the Respondent had lawfully notified the Applicant of its intention not to renew the tenancy. Reliance was also placed on **Tailor v Ambundo (Tribunal Case E020 of 2025) [2025] KEBPRT 324 (KLR)** for the proposition that a tenancy notice does not require filing before the Tribunal. The Court was therefore urged to dismiss the application with costs. **Analysis and Determination** 1. Having considered the application, the affidavits on record, the rival submissions and the authorities cited, the sole issue for determination is whether the Applicant has satisfied the conditions for grant of stay of execution pending appeal. 2. I have considered the Notice of Motion, the affidavits on record, the rival submissions and the authorities cited by the parties. The issue falling for determination is whether the Applicant has satisfied the conditions for the grant of **stay of execution pending appeal.** 3. The applicable law is found in **Order 42 Rule 6(2) of the Civil Procedure Rules**, which provides that no order for stay shall issue unless the Court is satisfied that substantial loss may result to the applicant unless the order is made, that the application has been made without unreasonable delay and that such security as the Court may order has been given. In **Githau Vs Kagiri & Another (Civil Appeal No. 314 of 2023) [2024] KEHC 6320 (KLR)**, the Court reiterated that the three requirements are cumulative and must all be satisfied before the discretion to grant stay can be exercised. 4. The cornerstone of an application for stay is proof of substantial loss. In **James Wangalwa & Another v Agnes Naliaka Cheseto [2012] eKLR**, the Court observed 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." 5. In the present case, the Applicant contends that it has occupied the suit premises for over two decades and conducts a parking lot and used oil business thereon. The Applicant further avers that unless stay is granted, it faces eviction from the premises and loss of its source of livelihood before the intended appeal is heard. Unlike an ordinary money decree, the impugned order requires the Applicant to give vacant possession of the premises. Should eviction occur and the appeal subsequently succeed, restoration of the status quo may not be straightforward. In my view, the Applicant has demonstrated that it stands to suffer prejudice that transcends the ordinary consequences of execution. 6. The intended appeal is principally anchored on the argument that the Respondent failed to issue a valid tenancy termination notice in accordance with **Section 4 of the Landlord and Tenant (Shops, Hotels and Catering Establishments) Act, Cap. 301**. The Respondent, on the other hand, maintains that the tenancy expired by effluxion of time and that no statutory notice was required. 7. Reliance was placed on **Tailor Vs Ambundo (Tribunal Case E020 of 2025) [2025] KEBPRT 324 (KLR)** where the Tribunal held that a tenancy notice does not require filing before the Tribunal. Without expressing any concluded view on the merits, I am satisfied that the dispute concerning the applicability of Section 4 of Cap. 301 raises a bona fide issue deserving consideration on appeal. 8. Regarding delay, the ruling sought to be appealed against was delivered on **6th March 2026** while the present application was filed on **30th March 2026.** In the circumstances, a period of approximately twenty-four days cannot be said to constitute inordinate delay. I am therefore satisfied that the application was presented without unreasonable delay. 9. On security, the Applicant has expressed willingness to comply with any conditions that may be imposed by the Court. In **Arun C. Sharma Vs Ashana Raikundalia t/a Raikundalia & Co. Advocates & 2 Others [2014] eKLR**, the Court stated that the purpose of security is not to punish a judgment debtor but to guarantee the due performance of any decree that may ultimately be binding upon him. In the interests of balancing the competing rights of the parties, security may therefore be imposed as a condition for the grant of stay. 10. Ultimately, the Court is required to balance the Applicant's right of appeal against the Respondent's right to enjoy the fruits of its judgment. In **Machira t/a Machira & Co. Advocates Vs East African Standard [2002] KEHC 1167 (KLR)**, the Court observed that a successful litigant is ordinarily entitled to the fruits of his judgment. 11. However, where an applicant demonstrates sufficient cause, the Court must ensure that the appeal, if successful, is not rendered nugatory. Having weighed the competing interests in this matter, I am persuaded that the interests of justice favour preservation of the subject matter pending the hearing and determination of the appeal. 12. In the result, I find merit in the Notice of Motion dated **30th March 2026** and the same is hereby allowed. Accordingly, I make the following orders: 13. There shall be a **stay of execution** of the Ruling and Order issued in **Nairobi BPRT Case No. E1423 of 2025, Kenphy Investment Limited v Hakasa Properties Limited** pending the hearing and determination of this appeal. 14. The Appellant shall deposit the monthly occupation charges equivalent to the last agreed rent into **a joint interest-earning account in the names of the parties' advocates** within thirty (30) days and shall thereafter continue making such monthly deposits pending the determination of the appeal. 15. The Appellant shall file and serve the Record of Appeal within **sixty (60) days** from the date hereof. 16. In default of compliance with orders (b) and (c) above, the stay granted herein shall automatically lapse. 17. Costs of the application shall abide the outcome of the appeal It is so ordered. **DATED**, **SIGNED** and **DELIVERED** virtually at **NAIROBI** on this **18th** day of **June, 2026.** **MOHAMMED N. KULLOW** **JUDGE** **Ruling delivered in the presence of: -** **Ms. Monyangi** for the Appellant/Applicant **Mr. Kamau** for the Respondent **Philomena W** Court Assistant