https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/6903

Kigio Group Company Limited v Sichuan Huashi Enterprises Corporation (Arbitration Cause E049 of 2024) [2026] KEHC 6903 (KLR) (Commercial and Tax) (7 May 2026) (Ruling) Neutral citation: [2026] KEHC 6903 (KLR) Republic of Kenya In the High Court at Nairobi (Milimani Commercial Courts) Commercial and Tax Arbitration Cause E049 of 2024 F Gikonyo, J May 7, 2026 Between Kigio Group Company Limited Applicant and Sichuan Huashi Enterprises Corporation Respondent Ruling 1.There are two applications filed by the respondent and the applicant on 7.8.2025 and 24.9.2025 respectively. 2.Briefly, the background is that through the ruling of 19.5.2025, the court dismissed the applicant’s application dated 7.8.2024 seeking to set aside the entire award of 15.5.2024 with costs to the respondent. The court also struck out the respondent’s application dated 15.8.2024 for setting aside for want of jurisdiction as it was filed out of time. Respondent’s application 3.The application dated 7.8.2025 by the respondent, Sichuan Huashi Enterprises Corporation, seeks stay of execution of the decree arising from the ruling of 19.5.2025 subject to payment of Kshs. 12,001,908 into court by the judgment debtor. It also seeks that pending the hearing and determination of the bill of costs dated 9.6.2025, a portion of the security deposited, Kshs. 3,244,659 serves as security for costs awarded. 4.The application is brought under Order 26 Rule 1 of the Civil Procedure Rules and Section 3A of the Civil Procedure Act. It is supported by an affidavit sworn by Joseph Agutu Omolo. 5.The main grounds are that the applicant has applied for leave to appeal the ruling and that the applicant has threatened to proceed with execution and that the applicant does not have any known means of satisfying any amounts that may be awarded to the judgment debtor as costs upon taxation. 6.The Kigio Group opposed the application through a replying affidavit sworn by its chairman, Stanley Njenga Ndegwa on 21.8.2025. 7.The key contentions are that the application is mischievous, oppressive and brought in bad faith. That the money awarded to it through the arbitral award is rental income illegally collected by the respondent from its property known as LR No. 4953/IV/45 and 46 Thika Municipality Block 9/96 and 558. 8.They further asserted that the delay in releasing the money has put the property at the risk of being auctioned as its ability to redeem the property has been compromised. 9.They highlighted that the underlying dispute ensued after the respondent which was engaged as a contractor illegally refused to release 7 floors of building erected on the property after completion of construction and conspired to frustrate it from collecting rent from the building. It also detailed some of the numerous cases, applications and appeals that arose from the respondent’s actions that led to foreclosure by HFC Limited. 10.They contended that the intended appeal is based on the ground that no damages were awarded despite the finding that the respondent was not entitled to retain any part of the building. That whatever the outcome of the appeal, the rental income shall never be the respondent’s property. It postulated that the respondent’s intention in withholding the money awarded is to delay the resolution of the dispute, to defeat justice and to assist the respondent to exit the country beyond the court’s jurisdiction. 11.They faulted the respondent’s counsel for making depositions in the supporting affidavit in respect of the respondent’s operational matters, yet he is not its officer. Applicant’s application 12.The applicant filed the notice of motion dated 24.9.2025 seeking the immediate release of Kshs. 12,117,434/- deposited by the respondent in an escrow account opened by the parties’ advocates to its advocates, Karuru Mwaura & Company Advocates for onward transmission to it. 13.The applicant also seeks an order directing the respondent to relinquish control of the 2 floors of LR No. 4953/IV/45 and 46 Thika Municipality Block 9/96 and 558 to it. That the respondent be compelled to give an account of all the rental income received from the 2 floors in its possession from 15.5.2025 (date of award) to date or until it hands over possession to the applicant. 14.The application is supported by the affidavit sworn by Daniel Karuru Mwaura on 24.9.2025. The depositions mirrored those in the replying affidavit of 21.8.2025 save to add that the interest offered by the bank on the money held in escrow is only 8% whereas the interest awarded is 13.5% per annum. That a specific order is necessary to direct the bank to release the money to the firm in line with the award. 15.The respondent filed a replying affidavit sworn by the respondent’s Managing Director, Deng Zheng’ on 2.10.2025. Submissions 16.The application was canvassed through the written submissions dated 5.10.2025 and 3.2.2026 by the applicant and the respondent respectively. They are a replica of the parties’ respective affidavits. Analysis and Determination 17.On 12.8.2025, the court gave the following order: -“As the applicant is willing to deposit the decretal sum as security, I direct that the applicant shall deposit the decretal sum in an interest earning account in the joint names of both legal counsel for the parties within 30 days of today. On this basis, I order a temporary stay of execution of the decree until 22.9.25 when the application shall be heard.” 18.As earlier noted, through the ruling of 19.5.2025, the court dismissed the applicant’s application dated 7.8.2024 seeking to set aside the entire award of 15.5.2024 with costs to the respondent. The court also struck out the respondent’s application dated 15.8.2024 for setting aside for want of jurisdiction as it was filed out of time. 19.It has filed an application dated 26.6.2025 seeking leave to appeal the ruling. 20.The court has been informed by the parties that the award was recognized for enforcement as order of the court. 21.The positive order in the ruling of 19.5.2025 awarded costs of the applicant’s application that was dismissed to the respondent. 22.The respondent’s application is therefore seeking security for its costs pending the hearing and determination of the bill of costs dated 9.6.2025, considering the applicant’s pending application for leave to appeal and intended appeal. 23.On the other hand, the applicant seeks immediate access to the Kshs. 12,117,434/- deposited in the joint account opened in the names of the parties’ advocates. 24.The jurisdiction to order security for costs is discretionary and must be exercised judiciously, balancing the appellant’s right to pursue the appeal against the respondent’s right to protection from the risk of an unrecoverable costs order. 25.The respondent expressed apprehension that the applicant has no known means of satisfying the decree that may arise from taxation of the bill of costs. That the applicant has not controverted this and that it is in the interest of justice that the Kshs. 3,244,659 is deposited into court pending the determination of the bill of costs. 26.On the other hand, the applicant argued that the respondent’s party and party bill of costs has not been taxed and is clearly exaggerated because a mere application cannot attract a legal fee of the amount claimed. It asserted that it would also be filing its bill of costs in the terms of the arbitrator’s award. 27.The applicant did not controvert the respondent’s claim that it had no other means of satisfying the decree that may arise from taxation of the bill of costs. 28.It only contended that the interest offered by the bank on the money held in escrow is only 8% whereas the interest awarded is 13.5% per annum. 29.The respondent did not also challenge the applicant’s entitlement to the balance. 30.This is one case that requires quite proportioned balance. Disposal 31.In the circumstances, in the interests of justice the court orders that: -1.Kshs. 3,244,659 is retained in the joint interest earning account in the joint names of both legal counsel for the parties pending taxation of party and party bills of costs by parties. The balance shall constitute the decretal sum of the award.2.Kshs. 8,872,775 be released to Karuru Maura & Company Advocates for onward transmission to the applicant.3.No orders as to costs as each application was partially successful. DATED, SIGNED AND DELIVERED THROUGH MICROSOFT TEAMS ONLINE APPLICATION THIS 7TH DAY OF MAY, 2026-----------------F. GIKONYO MJUDGEIn the presence of: -Mwaura for ApplicantOmolo for RespondentCA-Ivan/Aggrey