https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/12158

**REPUBLIC OF KENYA** **IN THE HIGH COURT OF KENYA AT NAIROBI** **(CONSTITUTIONAL AND HUMAN RIGHTS DIVISION)** **MILIMANI LAW COURTS** **CONSTITUTIONAL PETITION NO. E078 OF 2025** **LENANA INNOVATIVE SOLUTIONS LIMITED**.........................................................**1ST PETITIONER** **JOSEPH KURIA**..............................................................................................................................**2ND PETITIONER** **WILFRED KAMAU**.......................................................................................................................**3RD PETITIONER** **ERIC WACHIRA**............................................................................................................................**4TH PETITIONER** **VERSUS** **WLB ASSET II D. PTE LTD**...............................................................................................**1ST RESPONDENT** **WLB ASSET VI PTE LTD**.....................................................................................................**2ND RESPONDENT** **Ruling** **Introduction** 1. By a petition dated 19th February 2025, the Petitioners/Applicants sought to have 2 syndicated cross-border lending transactions between the 1st Petitioner and the Respondents, with an aggregate value of US$ 17,000,000, together with the securities executed in connection with them, declared invalid. Additionally, they sought to have Section 6(4) of the Movable Property Security Rights Act, 2017 declared unconstitutional, null and void. 2. The basis of the petition was the contention that, because the Respondents are foreign bodies corporate registered in Singapore and Mauritius respectively, they lacked legal capacity to contract, to lend and to take securities in Kenya by reason of their non-registration and non-licensing under the Companies Act, the Banking Act, the Bill of Exchange Act, the Foreign Investment Protection Act and the Tax Procedures Act. 3. The Petitioners/Applicants filed, together with the Petition, a Notice of Motion application of the same date vide which they sought conservatory orders. Upon considering the Motion, the court, on even date, issued two conservatory orders, *to wit*:- * 1. *Pending the interpartes hearing and determination of the Petitioners/Applicants’ Notice of Motion application dated 9th February 2025, a conservatory order be and is hereby issued staying the performance of all the obligations under the lending agreement between the Petitioners and the Respondents under the contracts between them dated 21st December 2022 and 4th January 2024 respectively; and* 2. *Pending the interpartes hearing and determination of the Petitioners/Applicants Notice of Motion application dated 19th February 2025, a conservatory order be and is hereby issued restraining the Respondents, jointly and severally, and whether directly or through their agents, servants, employees or associated entities/persons from presenting, enforcing, calling up or upon, or in any way attempting to exercise or deal with securities provided by the Petitioners herein with respect to the contracts between the parties herein dated 21st December 2022 and 4th January 2024.”* 4. With a view to concluding the matters without delay, the said orders were confirmed on 11th February 2026 by consent, pending the hearing and determination of the Petition. The matter was thereafter canvassed through written submissions. This court subsequently delivered judgment on 9th July 2026. 5. In the judgment, which the Petitioners/Applicants, being wholly aggrieved, are appealing. This court founds as follows at paragraph 67:- 6. *That section 6(4) of the Movable Property Security Rights Act, 2019 was not unconstitutional; and* 7. *That the Respondents had capacity to institute, defend and sustain proceedings, to enter and sign contracts and register securities in the Republic of Kenya, independent of registration under section 974 of the Companies Act.* 8. The court also discharged the conservatory orders issued on 19th February 2025 and confirmed on 11th February 2026 and dismissed the Petition dated 19th February 2025 with costs to the Respondents. **The Notice of Motion dated 15th July 2026** 1. On 15th July 2026 the Petitioners/Applicants filed the Notice of Motion application vide which they sought the following orders:- * + 1. ***Spent;*** 2. ***Spent;*** 3. ***That a conservatory order do issue to maintain the status quo prevailing prior to the delivery of the judgment of this Honourable Court on 9th July 2026 and in effect stay the performance of obligations under the lending agreement between the Petitioners and Respondent dated 21st December 2022 and 4th January 2024 respectively and further restrain the Respondents from presenting, enforcing, calling up or upon or in any way attempt to execute or deal with the securities provided by the Petitioners herein with respect to the lending agreements pending the hearing and determination of the Appeal in the Court of Appeal.*** 4. ***The costs of this application be provided for.”*** 5. It was contended in the grounds in the body of the said Motion that unless the conservatory orders were granted, the Respondent would call upon the securities and/or enforce their rights under the agreements, the legality of which they dispute, and that the appeal would therefore be rendered nugatory. They further contended that if the Respondents enforced their rights, the Petitioners/Applicants would suffer grave prejudice and inconvenience. They stated that the application was brought before the court promptly and without undue delay, and that it would be just and equitable, and in the interests of justice, for the orders sought to be issued. 6. The application was brought under Rule 32 of the Constitution of Kenya (Protection of Rights and Fundamental Freedoms) Practice and Procedure Rules, 2013 (hereafter “the Mutunga Rules”); Sections 1A, 1B and 3A of the Civil Procedure Act; Order 42 Rule 6 of the Civil Procedure Rules, 2010; and “all other enabling provisions of the law.” 7. The 2nd Petitioner/Respondent made a further sworn deposition on 15th July 2026, by which he exhibited the impugned judgment and stated that, being aggrieved by it, the Petitioners/Applicants wished to appeal against it. He reiterated that unless the conservatory orders were issued, the intended appeal would be rendered nugatory and that the Petitioners would thereby suffer substantial prejudice. **Response of the Respondents** 1. The application is opposed by the Respondents. Through their counsel, they filed grounds of opposition dated **20th July 2026**, in which it was contended that upon delivery of the judgment the court became functus officio and lacked jurisdiction to grant interim conservatory orders. It was also urged that the court merely dismissed a petition and made no positive order capable of being stayed. 2. The Respondents contend that conservatory orders are unavailable in this matter, as the subject matter of the Petition concerns private contractual rights that do not raise any public interest considerations capable of justifying the grant of conservatory relief. It was urged that the Petitioners/Applicants sought to prevent the Respondents from recovering US$ 17,000,000, which the 1st Petitioner received and utilized. **Supplementary Affidavit of the Petitioners/Applicants** 1. The Petitioners/Applicants made a further deposition on 21st July 2026, in which the deponent adverted to what they saw as fundamental legal and factual errors in this Court's judgment and to a reasonable likelihood of success of the intended appeal. Mr Kuria attached to his affidavit the draft Memorandum of Appeal, which contains 11 grounds of appeal. The draft Memorandum of Appeal seeks to ask the Court of Appeal to set aside and/or vary or quash this Court's judgment, to determine the appeal in light of the evidence and submissions on record, and to award the costs of the appeal to the Petitioners/Applicants. **Hearing of the Application** 1. The application dated 15th July 2026 was canvassed through written submissions. I will set out a précis of the parties' submissions below. **Submissions of the Petitioners/Applicants** 1. The submissions of the Petitioners/Applicants are dated 21st July 2026. Their counsel identified the sole issue for determination as whether the court can grant conservatory orders pending appeal. 1. It was urged that the court has an inherent right under Article 23 of the Constitution of Kenya, 20210 to issue appropriate reliefs where it is alleged that there has been a denial, violation, infringement of or threat to a right or fundamental freedom in the Bill of Rights. Counsel relied on the case of **GATHARA CHUCHU & 473 OTHERS v GITITU COFFEE GROWERSCO-OPERATIVE SOCIETY & another [2008] KEHC 1801 (KLR)**. 2. Counsel submitted, contrary to what the Motion before the Court expressly states, that the instant application was not a stay application under Rule 32 of the Mutunga Rules but rather one under Rule 3(8) of the said Rules, which provides that: ***“Nothing in these Rules shall limit or otherwise affect the inherent power of the court to make such orders as may be necessary for the ends of justice or to prevent abuse of the court process.”*** 1. It was urged that the principles under which the court could grant conservatory orders pending appeal were set out in the case of **Gulf Energy Limited v Rubis Energy Kenya PLC [2021] KEHC 2516 (KLR)** as follows: 2. ***The intended appeal is arguable and not frivolous;*** 3. ***Unless a stay is granted, the appeal would be rendered nugatory; and*** 4. ***There is public interest that the orders be granted.*** Counsel submitted that the above test had been adopted in other cases. Reliance was also placed on the decision of the Court in the case of **Republic v Kenya Revenue Authority & Kenol Kobil Ltd Ex parte Rayan Logistics Ltd; Nakuru High Court JR No 1 of 2018**. 1. Counsel submitted that the Petitioners/Applicants had an arguable appeal by which they mean, I would imagine, that the draft appeal raises serious questions of law deserving consideration by the Court of Appeal. In support of the said contention, they relied on the Court of Appeal decision in **Kenyatta University v Nyaga & 25 others [2023] KECA 561 (KLR).** 2. The Petitioners/Applicants submitted that unless conservatory orders were granted, the appeal would be rendered nugatory, as the effect of enforcing contractual rights would be incapable of being undone. Counsel for the Petitioners/Applicants relied on the cases of **Butt v Rent Restriction Tribunal [1979] KECA 22 (KLR)** and **Katiba Institute v Attorney General & 9 others [2018] KECA 115 (KLR)**. 3. The Petitioners/Applicants disputed the contents of the grounds of opposition and contended that their rights to ownership of property would be infringed if conservatory orders were not issued. It was urged that a dispute could not be said to have been finally and conclusively determined until a party had exhausted all available rights of appeal. 4. Lastly, it was contended that, because the petition impugned section 6(4) of the MPSR Act and raised substantial questions about the interpretation and application of section 974 of the Companies Act, 2015, public interest favoured the issuance of conservatory orders. It was therefore urged that conservatory orders ought to be issued. **Submissions of the Respondent** 1. The Respondents filed written submissions dated 22nd July 2026 in which they contended that the Petitioners/Applicants had expressly admitted receiving and benefitting from US$ 17,000,000 advances by the Respondents under the impugned credit facilities. It was submitted that the Petitioners/Applicants continued to use the said funds, while the Respondents had suffered quantifiable financial prejudice, including “loss of projected returns and material disruption of their commercial operations.” 2. It was urged that the issues for determination were: 3. *Whether the Honourable Court has the jurisdiction to grant the orders sought;* 4. *If so, whether the Petitioners/Applicants had satisfied the threshold for the grant of orders sought; and* 5. *Whether the application constitutes an abuse of the court process.* 6. Counsel for the Respondents submitted that the court lacked jurisdiction to grant conservatory orders because it had become *functus officio* upon delivery of judgment. Reliance was placed on the Court of Appeal decisions in **Telkom Kenya Ltd v Ochanda [2014] KECA 600 (KLR)** and **Odinga v Independent Electoral and Boundaries Commission and 3 Others [2013] KESC 8 (KLR)**. Counsel contended that the court was precluded from re-engaging with its decisions on the merits. Mrs Gatheru for the Respondents submitted that the court could not suspend the legal consequences of its own Judgment. 7. It was urged that the court’s determination resulted in issuance of a negative order as all the court did was to dismiss the Petition. This court was referred to the case of **Kaushik Panchamatia & 3 others v Prime Bank Limited & another [2020] KECA 418 (KLR)** where it was held that: ***“We reiterate the position taken by the Court in the above case that a negative order is incapable of being stayed because there is nothing to stay. It therefore follows that in light of the above threshold we have no mandate to grant a stay order in the manner prayed for by applicants.”*** 1. Reliance was also placed on the case of **Co-operative Bank of Kenya Limited v Banking Insurance & Finance Union (Kenya) [2015] KECA 353 (KLR) and Patel v Shah [2025] KECA 1259 (KLR).** 2. The counsel for the Respondents submitted that conservatory orders cannot be granted post judgment. In support of the said contention, counsel relied on the Supreme Court decision in **Munya v Kithinji & 2 Others [2014] KESC 30 (KLR)**. 3. It was urged that conservatory orders could only be issued where a petition was pending determination and not after a final decision had been delivered. A similar argument was made in respect of status quo orders; counsel relied on the case of **TSS Spinning &Weaving; Company Ltd v Nic Bank Limited & another [2020] KEHC 3977 (KLR**)**.** 4. The cases relied upon by the Petitioners/Applicants were distinguished. It was urged that **the Githara Chuchu case** concerned a stay pending appeal, whereas the **Republic v KRA & Kenol Kobil Ex parte Rayan Logistics Ltd case** was a judicial review matter. Counsel distinguished the applicability of the dictum in **Gulf Energy Ltd v Rubis Energy Kenya PLC [2021] KEHC 2516 (KLR)**. 5. It was urged that even if the application was seen as seeking a stay pending appeal, the Respondents/Applicants had not demonstrated that they had met the applicable test under Order 42 Rule 6 of the Civil Procedure Rules and Rule 32 of the Mutunga Rules, insofar as they had not shown what substantial loss they would suffer if a stay was not granted. Reliance was placed on the decision of Gikonyo J in **James Wangalwa & another v Agnes Naliaka Cheseto [2012] KEHC 1094 (KLR)**. 6. Counsel submitted that the application was an abuse of the process of the court. On that basis, the Respondents prayed that the Notice of Motion dated 15th July 2026 be dismissed with costs. **Analysis and Determination.** 1. As can be seen from the foregoing, this court has carefully considered the motion, the responses thereto, and the parties' submissions. In my view, the issues for determination by this court are: 2. What is the nature of the application before court? 3. Whether the court is *functus officio*? 4. Whether the Petitioners/Applicants had satisfied the conditions for issuance of a stay pending appeal or conservatory orders. 5. Who should pay costs? I will look at each of the issues in turn. **Nature of the Application** 1. In the submissions filed by their counsel, the Petitioners/Applicants aver strongly that their application was one for conservatory orders under Rule 3 (8) of the Mutunga Rules. They averred that:- ***“Be that as it may, the application before this court is not an application for stay as contemplated under Rule 32 of the Mutunga Rules. But is an application for conservatory orders pending appeal brought under the inherent jurisdiction of the court as postulated under Rule 3(8) of the Mutunga Rules which states:*** ***“Nothing in these Rules shall limit or otherwise affect the inherent power of the court to make such orders as may be necessary for the ends of justice or to prevent abuse of the court process.”*** 1. With respect to counsel, the application before me was expressly brought under Rule 32 of the Mutunga Rules, sections 1A, 1B and 3A of the Civil Procedure Act, and Order 42 Rule 6 of the Civil Procedure Rules. In the hackneyed phrase, parties are bound by their pleadings. In a similar vein, submissions are not pleadings but may aptly be described as marketing language used by counsel to persuade the Court. Having chosen to package its application as one for a stay under Rule 32 of the Mutunga Rules, the Petitioners/Applicants may not now resile from that position when submitting on the merits of the application. 2. Rule 32 of the Mutunga Rules is entitled stay pending appeal. It provides that:- ***“(1) An appeal or a second appeal shall not operate as a stay of execution or proceedings under a decree or order appealed.*** ***(2) An application for stay of execution may be made informally immediately following the delivery of judgment or ruling and the court may issue such orders as it deems fit and just.*** ***(3) A formal application for stay may be filed within 14 days of the decision appealed from or within such time as the court may direct.”*** The phraseology used is quite similar to that of Order 42 Rule 6 of the Civil Procedure Rules. In my view, the application before me is one for a stay pending appeal. **Is the court Functus Officio** 1. “Functus officio” doctrine operates to bar the court from merit-based engagement of the case once it has delivered its final decision. It is a Latin legal term that means “having performed his office” or “having discharged his duty”, on account of having finalized the specific job or task in his docket. 2. The said doctrine has been the subject of a plethora of decisions of the Superior Courts. The seminal case is that **Telkom Kenya Ltd v Ochanda (Suing on His Own Behalf and on Behalf of 996 Former Employees of Telkom Kenya Ltd) [2014] KECA 600 (KLR)** where it was held that:- ***“21. Functus officio is an enduring principle of law that prevents the re-opening of a matter before a court that rendered the final decision thereon. It is a doctrine that has been recognized in the common law tradition from as long ago as the latter part of the 19th Century. In the Canadian case of Chandler Vs Alberta Association of Architects [1989] 2 S.C.R. 848, Sopinka J. traced the origins of the doctrine as follows (at p. 860);*** ***22. The general rule that a final decision of a court cannot be re-opened derives from the decision of the English Court of Appeal in re St. Nazaire Co., (1879), 12 Ch. D. 88. The basis for it was that the power to rehear was transferred by the Judicature Acts to the appellate division. The rule applied only after the formal judgment had been drawn up, issued and entered, and was subject to two exceptions:*** ***23. Where there had been a slip in drawing it up, and where there was an error in expressing the manifest intention of the court. See Paper Machinery Ltd. vs. J.O. Rose Engineering Corp., [1934] S.C.R. 186. The Supreme Court in Raila Odinga v IEBC cited with approval an excerpt from an article by Daniel Malan Pretorius entitled, “The Origins of the Functus Officio Doctrine, with Special Reference to its Application in Administrative Law” (2005) 122 SALJ 832 in which the learned author stated;...*** ***“The functus officio doctrine is one of the mechanisms by means of which the law gives expression to the principle of finality. According to this doctrine, a person who is vested with adjudicative or decision-making powers may, as a general rule, exercise those powers only once in relation to the same matter...The [principle] is that once such a decision has been given, it is (subject to any right of appeal to superior body or functionary) final and conclusive. Such a decision cannot be reviewed or varied by the decision maker.”*** 1. My view is that the doctrine is subject to certain exceptions. It does not bar the court from considering an application for stay pending appeal or from exercising review jurisdiction under Order 45 of the Civil Procedure Rules. What it does, however, bar is merit-based re-engagement with the court’s own decision. 2. In the circumstances I find and hold that this court is not *functus officio*. The objection of the Respondent to that effect is therefore overruled. **Has the test applicable to conservatory orders been satisfied?** 1. I agree with the counsel for the Petitioners/Applicants that the court may issue stay orders pending appeal, as stated by the High Court in the Githara Chuchu case. Having said that, the test applicable under Order 42 Rule 6 of the Civil Procedure Rules would apply. An applicant must show that he would suffer substantial loss unless the stay was granted, that the application was made without undue delay, and must give security for the due performance of the decree or order that may ultimately be binding. 2. Before I consider the above conditions, I must, however, note that what this court did was to dismiss the Petition filed by the Petitioners/Applicants vide which they sought conservatory and declaratory reliefs. The Respondents have rightly contended, and I agree, that this court did not issue positive orders that can be stayed. Its orders were negative in nature. 3. In **Cooperative Bank of Kenya Ltd v Banking Insurance & Finance Union (Kenya) [2015] eKLR** it was held that:- ***“An order for stay of execution is ordinarily an interim order which seeks to delay the performance of positive obligations that are set out in a decree as a result of a Judgment. The delay of performance presupposes the existence of a situation to stay – called a “positive order” – either an order that has not been complied with or has partly been complied with. See, for this general proposition, the holding of the Court of Appeal of Uganda in Mugenyi & Co. Advocates v National Insurance Corporation (Civil Appeal No. 13 of 1984) where it was stated:*** ***“…an order for stay of execution must be intended to serve a purpose …..”*** 1. In **Patel v Shah [2025] KECA 1259 (KLR)** it was held that: ***“It is plainly obvious to us that the prayer for stay of execution is misconceived in the circumstances of this application in so far as the High Court, by the impugned ruling, dismissed the applicant’s application, after it found that it had no jurisdiction to entertain the same. To that extent, and as has been stated time and again, this Court cannot stay an order of the High Court that has merely dismissed a suit or an application. (See***[***Western College of Arts and Applied Sciences v E. P. Oranga & 3 Others***](https://new.kenyalaw.org/akn/ke/judgment/keca/1976/15)***[1976] eKLR;***[***George ole Sangui v Kedong Ranch Ltd***](https://new.kenyalaw.org/akn/ke/judgment/keca/2015/480)***[2015] eKLR;***[***Exclusive Estates Ltd v Kenya Posts and Telecommunications Corporation & Another***](https://new.kenyalaw.org/akn/ke/judgment/kehc/2004/2700/eng%402004-12-03)***[2005] 1 EA 53; and***[***F & S. Scientific Ltd. v Kenya Revenue Authority & Another***](https://new.kenyalaw.org/akn/ke/judgment/keca/2013/383)***(CA No. 260 of 2012).”*** 1. There being no positive orders, it follows from the foregoing decisions of the Court of Appeal that there is nothing to stay and that the order sought may not issue. 2. Having found as above, I need not consider whether the tests in Order 42 Rule 6 of the Civil Procedure Rules have been met. The tests are, for all intents and purposes, moot, and no useful purpose would be served by interrogating them. 3. Even assuming, contrary to what the motion states on its face, that the instant application was for conservatory orders, I am not persuaded, on the basis of the principles set out in the **Gulf Energy case,** that conservatory orders ought to issue. I am not persuaded that the appeal is arguable (and I say this with humility, as the decision sought to be overturned is mine). It hasn’t been shown that, in respect of a dispute where the subject matter is quantifiable, the Respondents would not be able to refund whatever they shall have recovered from the Petitioners/Applicants. I am not convinced that there is a public interest in the issuance of conservatory orders. To the contrary, public interest favours upholding contracts parties freely entered into. 4. The existence of the commercial contract is not disputed. The fact that the Petitioners/Applicants obtained money and have used it in furtherance of their business is also not disputed. Having benefited from lending transactions, the Petitioners/Applicants now seek to resile from their obligation on technical grounds. It appears to me that they seek to unjustly enrich themselves. While doing so, they seek the aid of the Court of Equity. It is a trite observation that he who comes to equity must do so with clean hands. 5. Under those circumstances, this Court will not come to the aid of the Petitioners/Applicants. The application dated 15th June 2026 must fail. 6. Costs follow the event. As the application has been dismissed, the Respondents are the successful parties. Accordingly, I award them the costs of the application. 7. The subsisting status quo orders are hereby discharged. 8. Orders accordingly. **Dated** and **signed in Nairobi, this 3rd day of August 2026.** **Gregory Mutai** **JUDGE** **In the presence of:** Mr **Charles Madowo,** for the **Petitioners/Applicants**; Mrs **Gatheru**, Mr **Obonyo** and Mr **Omollo,** for the **Respondents**; and Miss **Neema Lwambia – Court Assistant.**