[2025] KEHC 2864 (KLR)

Kibet v Stenna Crop Science Limited (Commercial Appeal E005 of 2024) [2025] KEHC 2864 (KLR) (12 March 2025) (Ruling)

Neutral citation: [2025] KEHC 2864 (KLR)

Republic of Kenya

In the High Court at Eldoret

Commercial Appeal E005 of 2024

E Ominde, J

March 12, 2025

Between

Alex Kiprop Kibet

Applicant

and

Stenna Crop Science Limited

Respondent

Ruling

1. By a Notice of Motion dated 1/10/2024, the Applicants seeks the following orders:1. Spent.2. Spent.3. This Honourable Court be pleased to stay execution of the judgment/decree in Eldoret Small Claims Commercial Case No. E1125 of 2023 between Stenna Crop Science Limited Vs. Alex Kiprop Kibet pending the hearing and determination of this Appeal.4. Costs be in the Cause.

2. The Application is premised on the following grounds:i.That the Honourable Resident Magistrate Hon. T.W. Mbugua entered judgment in favour of the Respondent on 6/09/2024, in Eldoret Small Claims Commercial Case No. E1125 of 2023 between Stenna Crop Science Limited Vs. Alex Kiprop Kibet.ii.That the said judgment was erroneous for inter-alia the following reasons:a.It was not grounded on the weight of the evidence adduced by the Respondent herein (then the Claimant);b.The said judgment was not based on sound legal principles and/or rules of evidence, such as shifting the burden of proof to the Appellant/Applicant herein (then the Respondent)c.The said judgment was largely based on unproven facts but rather on mere allegations;d.The judgment focused of extraneous issues that were not raised in the pleadings;e.The evidence adduced at the hearing did not establish the Respondent’s case on a balance of probabilities; andf.The judgment was based on gross and blatant misapplication of the law.iii.That based on the said erroneous judgment, the Respondent herein has file a Notice to Show Cause dated 17/09/2024 which seeks to have the Appellant/Applicant to appear before the trial Court on 14/10/2024 to explain his failure to satisfy the decretal amount of Kshs. 945,137. 30/= lest he be committed to civil jail.iv.That the Appellant/Applicant herein having been dissatisfied with the judgment of the trial Court has appealed against the whole judgment thereof at the earliest opportunity.v.That the Appellant’s/Applicant’s Appeal is extremely meritorious.vi.That the Appellant/Applicant is extremely keen and desirous of pursuing and prosecuting his appeal, given that he has an arguable appeal that id full of merit.vii.That the Respondent will not be prejudiced in any way if the orders sought are granted given that he will have every opportunity to present his side of the case.viii.That the Appellant/Applicant is ready and willing to abide by any reasonable conditions for the due performance of the decree on whatever terms that the Honourable Court may deem fit.ix.That the Appellant/Applicant is ready and willing to put up any security for the due performance of the decree on whatever terms the Honourable Court may deem fit.x.That from the foregoing, it is abundantly clear that the Appellant/Applicant stands to suffer substantial loss unless the orders sought are granted since the intended appeal may be rendered nugatory should the Respondent proceed to execute the said aforementioned decree and later the Appellant/Applicant is eventually successful on appeal.xi.That there is an inescapable constitutional imperative on this Honourable Court that demands that the Appellant/Applicant must be afforded an opportunity to ventilate his intended appeal and that it be heard and determined on merits.xii.That it is in the best interest of justice and fairness that the orders sought are granted as prayed.xiii.That justice demands that the instant Application is made.

3. The Application is further supported by the Affidavit sworn by Applicant on the same date.

The Response 4. The Application is opposed by the Respondent vide the Replying Affidavit sworn by Kenneth Olango on 17/102024. He deposed that both the appeal and the application herein are vexatious, frivolous and abuse of the process of this Court, that a perusal of the Memorandum of Appeal dated 20/09/2024 and the grounds on the body of this Application disclose no pint of law. He further deposed that the provisions of Section 38 of the Small Claims Court, Appeals to this Court are only on matters of law and no issue of law have been disclosed in the Application and in the Memorandum of Appeal.

5. He maintained that in Application brought under Order 42 Rule 6 of the Civil Procedure Rules, the Applicant has not demonstrated that he will suffer irreparable loss if the stay is not granted. He further deposed that this is a money judgment and it is not clear under what circumstances the Applicant would suffer irreparable loss. He contended that the Applicant has not offered any security for the due execution of the decree more so in terms of depositing the decretal sum of Kshs. 945,137. 30 in a joint Advocates’ interest earning account.

6. In the end, he deposed that whereas the Applicant has a constitutional right to be heard on appeal there are no circumstances herein which are impeding such a hearing and if any money shall be paid out to the Respondent the same came can be easily be refunded back. he maintained that the Respondent has the capacity and liquidity to refund the ApplicantKshs. 945,137. 30/= in case his appeal succeeds.

Submissions 7. The Application was canvassed of by way of written submissions. The Applicant filed Submissions dated 2/12/2024, while the Respondent filed Submissions dated 26/11/2024.

Applicant’s Submissions 8. With regard to the principles that guide the granting of stay of execution pending appeal, Counsel cited Order 42 Rule 6 of the Civil Procedure Rules and submitted that all these conditions must be present to satisfy a court that the applicant deserves to be granted orders for stay. Counsel cited the case Tabro Transporters Ltd v Absalom Dova Lumbasi|2012]eKLR where the court stated thus;“These conditions are the essence of Order 42 Rule 6 CPR. They however share an inextricable bond such that, if one Is absent, it will affect the exercise of the discretion of the court in granting stay of execution."

9. From the above, Counsel submitted that it can surmised that the conditions for grant stay are inter alia; the Court is satisfied substantial loss may occur to the Applicant unless the order is given; there was no unreasonable delay in making the application for stay; and the court may order for security to be furnished for the due performance of any such pertinent decree or order.

10. On substantial loss, Counsel submitted that the Appellant/Applicant has adequately demonstrated that he stands to face substantial loss should the court not grant him the orders of stay. That contrary to the allegations contained in paragraphs 7, 8 and 9 of the Respondent's Replying Affidavit dated 17/10/2024, what is important for an Applicant to show is "substantial" and not "irreparable" loss.

11. That the term 'substantial loss' is as defined in James Wangalwa & Another v Agnes Naliaka Cheseto [2013] eKLR, where the Court held:“The Applicant must establish other factors which show that the execution will create a state of affairs that will irreparably affect or negate the very essential core of the Applicant as the successful party in the appeal. This is what substantial loss would entail....”

12. Counsel submitted that judgment was entered against the Appellant/Applicant in the sum of Kshs.860, 640/= and he is bound to suffer substantially should he be successful at appeal, which appeal he submits is very arguable appeal with extremely high chances of success if the Respondent who is yet to demonstrate that it is financially capable of doing so, fails to reimburse the said amount. In support of this submission, he cited the case of Zulfiquar Ali Jaffery v ABC Bank Limited [2013] eKLR where the leaned Judge observed as follows:“In that regard, I wish to associate myself with the holding in the case of Royal Reserve Management Company & Another vs Gerald Mahinda &Another eKLR [2008] where Okwengu J (as she then was) affirmed that a sum of Kshs 1,000,000/= was not a small amount having noted that the Respondents therein had not indicated their means so as to justify their contention that they were in a position to refund the money and Trustees Catholic Diocese of Murang'a & Another vs Rev. Samuel Ngugu & Another eKLR [2008] where the court found that a sum of Kshs 2,500,000/= was rather a substantial amount for an individual.

13. On the issue of unreasonable delay, Counsel maintained that in the instant application, the Appellant/Applicant acted swiftly and filed the instant Application on 1/10/2024, less than two (2) months after judgment was entered. In the circumstances, Counsel urged that it is discernible that the Appellant/Applicant is not guilty of laches.

14. With regard to Security for due performance Counsel submitted that the other prerequisite is that the Appellant/Applicant has a duty to demonstrate willingness and capability of availing security for the due performance of the Decree at whatever terms this Honourable Court will deem fit and as shown in paragraph (ix) of his Application he has demonstrated that he is willing to comply and this is in tandem with the provisions of Order 42 Rule 6(2)(b). He relied on the case of RWW vs. EKW [2019] eKLR, where the court the stated thus;“The other condition for granting stay orders is on the security to be offered. The law is that a party seeking stay must offer such security for the due performance of the orders as may ultimately be binding on the Appellant.”

15. On whether the Appellant/ Applicant is entitled to the prayers sought, Counsel maintained that it is a well-respected legal principle that an order of stay of execution is a discretionary power and is not an automatic right and that such discretion ought to be exercised judiciously and not capriciously or whimsically. In support of this submission, Counsel cited the case of Trust Bank Limited and Another v. Investec Bank Limited and 3 Others [2000] eKLR

16. Counsel submitted that in this case, the special circumstances are that a cursory glance at the judgment shows that the Adjudicator failed to apply basic legal principles regarding company law and evidence, specifically that a company seal must be affixed to demonstrate that any document is a valid document. Counsel urged that equally, a company's directors' resolution is important to give legal credence to an alleged company resolution. All these demonstrate that it would only be prudent for the Honourable Court to stay execution while the main appeal is heard and determined on merits.

17. On whether the Appeal is merited, Counsel cited Section 38 of the Small Claims Court Act and submitted that contrary to the allegations contained in paragraphs 5 of the Respondent's Replying Affidavit, the said Memorandum of Appeal raises serious points of law and that it interrogates the Adjudicator's failure to arrive at a judgment that was not founded on matters pleaded. It is trite law that parties are bound by pleadings, therefore this was an egregious breach of established legal principles.

18. Counsel urged that the Respondent never discharged its evidentiary burden of proof, which is a principle that applies even to the Small Claims Court; the Adjudicator, in breach of established evidentiary rules, shifted the burden of proof to the Appellant/Applicant yet the Respondent had not discharged his aforementioned duty and thereafter, the Adjudicator rendered judgment that was not supported by the totality of the evidence adduced.

19. Counsel maintained that it is trite law that striking out of a Notice of Memorandum of Appeal is a drastic measure, a measure of last resort that ought to be done at the most hopeless of appeals. Counsel cited the case of MZM v JMM & 3 others (Civil Appeal (Application) E024 of 2022)[2023] KECA 982 (KLR) (28 July 2023) (Ruling) where the Court held:“The power to strike out an appeal or notice of appeal on account of failure by an appellant to follow the rules of procedure requires to be exercised carefully and only in cases where it is shown that the party at fault flagrantly or deliberately or flippantly or recklessly Filed to follow the rules."

The Respondent’s Submissions 20. On whether the Applicant has met the threshold for grant of stay pending appeal, Counsel for the Respondent cited inter alia Jason Ngambua Kaga & 2 others vs Intra Africa Assurance Co. Ltd where the Court held“the possibility that substantial loss will occur if an order of stay of execution is not granted is the cornerstone of the jurisdiction of Court in Civil Procedure Rules. The Court arrives at the decision that substantial loss is likely to occur if stay is not granted made by performing a delicate balancing act between the rights of the Respondent to the fruits of his judgement and the right of the Applicant on the process of his appeal"

21. Counsel submitted that even if the Applicant paid out the decretal sum, the Respondent shall effortlessly pay it back should the appeal succeed. Counsel further submitted that in no way the appeal herein can be rendered nugatory as nothing has been placed before the Court to show that the Respondent is incapable of pay back.

22. According to Counsel, of paramount importance is that the appeal as filed contravenes the clear provisions of law since under Section 38 of the Small Claims Court appeals are only on matters of law. No law has been disclosed which the impugned judgement has contravened.

23. Counsel maintained that this is not a clear case where this honourable Court should exercise discretion in favour of Applicant. In conclusion, Counsel urged the Court to dismiss the Applicant’s Application with costs to the Respondent.

Determination 24. The principles guiding the grant of a stay of execution pending appeal are well settled. These principles are provided under Order 42, Rule 6 of the Civil Procedure Rules, 2010 which provides as follows: -“(1)No appeal or second appeal shall operate as a stay of execution or proceedings under a decree or order appealed from except appeal case of 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.(3)Notwithstanding anything contained in subrule (2), the court shall have power, without formal application made, to order upon such terms as it may deem fit a stay of execution pending the hearing of a formal application.

25. The factors to consider in stay pending appeal is set out in the Court of Appeal decision in Butt v Rent Restriction Tribunal [1982] KLR 417. The Court gave guidance on how a Court should exercise discretion in such an Application and held as follows: -1. The power of the Court to grant or refuse an Application for a stay of execution is a discretionary power. The discretion should be exercised in such a way as not to prevent an appeal.2. 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 that appeal Court reverse the judge’s discretion.3. 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.4. The Court in exercising its discretion whether to grant [or] refuse an Application for stay will consider the special circumstances of the case and unique requirements. The special circumstances in this case were that there was a large amount of rent in dispute and the Appellant had an undoubted right of appeal.5. The Court in exercising its powers under Order XLI rule 4(2)(b) of the Civil Procedure Rules, can order security upon Application by either party or on its own motion. Failure to put security for costs as ordered will cause the order for stay of execution to lapse.

26. The purpose of stay of execution is to preserve the subject matter in dispute while balancing the interests of the parties and considering the circumstances of the case. The Court of Appeal in RWW vs. EKW [2019] eKLR (Supra) addressed itself on this as hereunder: -“The purpose of an application for stay of execution pending an appeal is to preserve the subject matter in dispute so that the rights of the appellant who is exercising the undoubted right of appeal are safeguarded and the appeal if successful, is not rendered nugatory. However, in doing so, the court should weigh this right against the success of a litigant who should not be deprived of the fruits of his/her judgment. The court is also called upon to ensure that no party suffers prejudice that cannot be compensated by an award of costs. 9. Indeed to grant or refuse an application for stay of execution pending appeal is discretionary. The Court when granting the stay however, must balance the interests of the Appellant with those of the Respondent.”

27. On the issue of substantial loss, in the case of Kenya Shell Limited –vs- Benjamin Karuga Kigibu & Ruth Wairimu Karuga (1982-1988) KAR 1018 the Court of Appeal pronounced itself to the effect that:“It is usually a good rule to see if Order 41 Rule 4 of the Civil Procedure Rules can be substantiated. If there is no evidence of substantial loss to the Applicant, it would be rendered nugatory by some other event. Substantial loss in its various forms is the cornerstone of both jurisdictions for granting stay.”

28. Also, it was observed in James Wangalwa & Another v Agnes Naliaka Cheseto [2012] eKLR 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, that is to say, 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 state of affairs 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 has to be prevented by preserving the status quo because such loss would render the appeal nugatory.”

29. The purpose of security was explained in the case of Arun C. Sharma vs Ashana Raikundalia t/a Raikundalia & Co. Advocates & 2 Others [2014] eKLR the court stated: -a.“The purpose of the security needed under Order 42 is to guarantee the due performance of such decree or order as may ultimately be binding on the applicant. It is not to punish the judgment debtor…..Civil process is quite different because in civil process the judgment is like a debt hence the applicants become and are judgment debtors in relation to the respondent. That is why any security given under Order 42 Rule 6 of the Civil Procedure Rules acts as security for the due performance of such decree or order as may ultimately be binding on the applicants. I presume the security must be one which can serve that purpose.

30. On whether the intended appeal is arguable, the Court herein is guided by the decision in Kenya Commercial Bank Limited v Nicholas Ombija [2009] eKLR, where the Court of Appeal held that: an “arguable” appeal is not one which must necessarily succeed, but one which ought to be argued fully before the court.” As to whether the intended appeal will succeed, we leave it to the bench that will hear and determine the issues.

31. In the case of Dennis Mogambi Mang’are Vs. Attorney General & 3 others [2012] eKLR, the Court held that:“An arguable appeal is not one that must necessarily succeed, it is simply one that is deserving of the court’s consideration.”

32. I have perused the grounds upon which the intended appeal is premised. In considering the same, I am satisfied that the Appeal as is required under Section 38 of the Small Claims Court Act is premised on points of law. I also note from the Response and submissions by Counsel for the Respondent that it is merely asserted but it has not been demonstrated to Court how the said Appeal offends the provisions of Section 38. All considered, I am satisfied that the applicant’s Application has met the requirements of Order 42 above. Further, I am satisfied that the said Appeal is arguable and the applicant ought to be given an opportunity to ventilate their case.

33. On the issue of security, I note that the respondent has again simply stated both in his response and submissions that he is able to pay the decretal sum if the Appeal succeeds but he has not demonstrated in what way. This assertion without any attempt at substantiation by the response lends credence to the applicant’s submission that the possibility that the respondent may not be able to pay the decretal sum in the event that his Appeal is successful does exist. The applicant on his part states that he is willing to abide with whatever conditions the court may impose on the issue of security

34. All considered therefore, I allow the applicant application for stay of execution pending Appeal as follows;a.That an order of stay of execution of the judgment/decree in Eldoret Small Claims Commercial Case No. E1125 of 2023 Stenna Crop Science Limited v Alex Kiprop Kibet is now hereby issued pending the hearing and determination of this Appeal.b.That the applicant is to deposit the entire decretal amount in a interest earning account in the joint names of the Advocates for both parties within the next 45 days failure to which the orders of stay of execution herein issued shall be deemed to have lapsedc.Costs of the Application shall be in the cause.

READ DATED AND SIGNED AT ELDORET ON 12TH MARCH 2025E. OMINDEJUDGE