https://new.kenyalaw.org/akn/ke/judgment/keelc/2026/4525

**REPUBLIC OF KENYA** **IN THE ENVIRONMENT AND LAND COURT** **AT MILIMANI LAW COURTS, NAIROBI** **ELC APPEAL NO E001 OF 2026** **MABONENG LIMITED T/A MABONENG LOUNGE & RESTAURANT……..……………………………………..…..…..APPELLANT/APPLICANT** **-VERSUS-** **LE BLANC CO. LIMITED………………………………………...….….1ST RESPONDENT ALLAN OTIENO T/A NEXTTGEN AUCTIONEERS………………….2ND RESPONDENT** **RULING** **Introduction** 1. The matter is coming up for determination of the Applicant/Appellant’s Notice of motion application dated 5th January 2026 seeking the following orders; 2. **Spent** 3. **THAT** this Honourable Court be pleased to issue an order of stay of the Judgment and Orders issued by the Nairobi Business Premises Tribunal in Cause E465 of 2025 in favour of the 1st Respondent and all consequential orders flowing therefrom, pending the hearing and determination of this application. 4. **THAT** this Honourable Court be pleased to issue an order of stay of the Judgment and Orders issued by the Nairobi Business Premises Tribunal in Cause E465 of 2025 in favour of the 1st Respondent and all consequential orders flowing therefrom pending the hearing and determination of this appeal. 5. **THAT** this Honourable Court be pleased to order that Appellant pays the sum of Kshs. 400,000/= being the admitted rental arrears in monthly instalments of Kshs. 50,000/= as a condition for granting a stay of execution as prayed herein, payable together with the monthly rent. 6. **THAT** the Appellant/Applicant be granted peaceful and quiet possession of the suit premises as it makes arrangements to settle the rental arrears pending the hearing and determination of this Appeal. 7. **THAT** the costs of the application be provided for. 8. The application was premised on grounds as in the supporting affidavit of Vic Preston Omondi. He deponed that the appellant being aggrieved by the decision of the tribunal in Tribunal in Cause E465 of 2025 had preferred this appeal challenging the figure given for the rental arrear in the judgement delivered on the 19th December 2025. 9. He further deponed that appellant was not in a position to deposit the entire decretal sum as security but is able to deposit Ksh 400,000/ as the admitted rental arrears and continue paying monthly rents to the 1st Respondent hence the Respondent will not be prejudiced in any way. That the appellant is apprehensive unless the orders for sty are issue the 1st Respondent will proceed with execution which will cause substantial loss to it being a business of losing the premises and further the monies it has spent in the repairs done in the cause of its operation in the suit premises. 1. Th 1st Respondent in opposing the application swore a replying affidavit by one Kevin Odhiambo.He deponed that the appellant had failed to adhere to the terms of the judgement rendered by the tribunal. That the tribunal found the appellant to be in arrears of Ksh 1,150,000/= and ordered the Appellant to continue paying rent of Ksh 150,000/= and a further 75,000/ monthly towards settling the rental arrears . He deponded that the appellant had failed to adhere to the said terms prompting the filing of Miscellaneous E076 of 2026 in the chief magistrate’s court to enable the ruling of the tribunal be adopted as an order of the court and enable the Respondent start the execution proceedings in the form of levying distress for rent. It was further deponed that the appellant had not demonstrated what substantial loss will be occasioned to them. 1. The appellant filed a supplementary affidavit in which he deponed that they had complied with the paying the 1st instalment of Ksh 225,000/= and are willing to keep paying the rent and 50,000/= towards settling of the arrears and deposit the sum of Ksh 400,000/= as security 2. The 1st Respondent in rebuttal indicated the tribunal had already made its findings on the arrears and the appellant cannot ask the court to change the figures to suit them and that further the more the appellant is allowed to accumulate arrears, they might become insolvent and fail to pay the debt occasioning loss to the 1st Respondent. 3. The application was canvassed by way of written submissions with the Applicant filing submissions dated 5th March 2026 whereas the 1st Respondent filed submissions dated 10th June 2026 Applicant/Appellant’s submissions 1. Counsel for the Applicant submitted and asked the court to rely on the case of Nicholas **Stephen Okaka & another v Alfred Waga Wesonga [2022] Eklr,** Counsel submitted that in an application for stay of execution, the same is guided by order 42 rule 6 (2) wherein one ws to demonstrate substantial loss, the application has been made without delay and that security for due performance of a decree had been given. He submitted that the Applicant had demonstrated substantial loss in the sense that they had been tenant in the premises since the 2021 and continued paying rent faithfully and if the stay of execution is not granted, they will loss possession of the premises which is their source of earning a living as they operate a restaurant relying on the definition of substantial loss as in the case of **James Wangalwa & Another v Agnes Naliaka Cheseto [2012] eKLR,.** Counsel further submitted that the 1st Respondent will not suffer any loss as they will continue paying rent but, in their case, should the stay not issue the appeal succeeds, they would have suffered in payment of excess monies to the 1st Respondent who had not demonstrated they could be able to reimburse. Respondents ‘submissions 1. Counsel submitted on the provisions of order 42 rule 6(2) of the civil procedure rules. He indicated that the Applicant was to demonstrate substantial loss which they had not and that their argument that the Applicant will suffer as they had developed the premises and invested with other 3rd parties which will amount to litigation, were mere allegations that had not been substantiated relying in the case of **Kosiamu & Another Vs Tuuko & 3 others Environment and Land Case 22 of 2017.** He further submitted that no evidence had been produced to show the works that had been carried out by the Applicant as alleged to improve the suit premises that would lead to loss of investment. On the issue for security for due performance of a decree, Counsel submitted that the Applicant had not furnished the same to court and the request to deposit Ksh 400,000/= as security was not tenable as it will be prejudicial to the Applicant. Counsel relied in the case of Mwaura Karuga t/a Limit Enterprises Vs Kenya Bus Ltd & 4 others (2015)eKLR to buttress this point. He urged the court to only allow the same on deposit of the full decretal amount in a joint interest account. **Analysis and determination** 1. Having looked at the application, the responses thereto, the submissions and cited authorities, the issue for determination will be whether the application for grant of stay of execution is merited 2. The law governing the grant of orders for a stay of execution pending appeal is codified under Order 42 Rule 6 (1) and 2 of the Civil Procedure Rules. Sub rule 2 reads; No order for a stay of execution shall be made under sub-rule (1) unless— 1. 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 2. 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. Substantial loss is the cornerstone of an application for stay. In **Kenya Shell Limited v Benjamin Karuga Kibiru & another [1986] KECA 94 (KLR),** the Court of Appeal held that: -“*If there is no evidence of substantial loss to the Applicant, it would be a rare case when an appeal would be rendered nugatory by some other event. Substantial loss in its various forms, is the corner stone of both jurisdictions for granting a stay. That is what has to be prevented. Therefore, without this evidence it is difficult to see why the Respondents should be kept out of their money.”* 4. The Applicants bear the burden of showing the substantial loss they are likely to suffer if no stay is ordered. This recognises that both parties have rights; the Appellants to their Appeal, including the prospect that it will not be rendered nugatory; and the decree holder to the decree, including the full benefits under the decree. In balancing the two competing rights, the Court focuses on their reconciliation, which is not a question of discrimination. Regarding substantial loss, it is not disputed that the Applicant is a business operating in the suit premises. The Tribunal directed that the Appellant/Applicant to have the arrears be paid in monthly instalments of Kshs. 75,000/= beginning January 2026 in addition of the rent of Ksh 150,000/= in default the 1st Respondent is at liberty to levy for distress of rent. 1. The Applicant has indicated that if execution occurs and the 1st Respondent levies for distress for rent, they will suffer irreparable loss by losing the premises, the investment done on the premises and potential litigation from third parties. The Respondents on the other hand contend that the Applicant has merely made generalized allegations and has failed to establish actual substantial loss. 2. I am in agreement with the Respondent being that there is the principle that principle that execution of a lawful given decree does not automatically amount to substantial loss. A successful litigant is entitled to enjoy the fruits of his judgment. This principle was aptly stated in **Machira T/A Machira & Co. Advocates v East African Standard (No.2) [2002] KLR 63, where the court observed that**:-“*A successful party is entitled to the fruits of his judgment and should not be deprived of the same without just cause.”* However, each case must be determined on its own individual circumstances. The court must balance the right of the successful litigant to enjoy the fruits of judgment against the equally important right of an unsuccessful litigant to pursue an appeal. 1. On delay, the judgment was delivered on 19th December 2025 and the application filed on 5th January 2026. This court is satisfied that the application was filed without unreasonable delay. 2. On security, Order 42 Rule 6(2)(b) of the Civil Procedure Rules is couched in mandatory terms. In **Focin Motorcycle Co. Limited v Ann Wambui Wangui & another [2018] KEHC 8358 (KLR),** the court held that: -“*In Arun C Sharma -V- Ashana Raikundalia T/A Rairundalia & Co. Advocates Justice Gikonyo the Court stated that:“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 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’’* 3. The Applicant has expressed willingness to deposit Ksh 400,000/= as security for due performance of decree. The Respondents have strongly opposed and that if the court is to allow for the application, then the Applicant is to deposit the entire decretal sum in a joint interest earning account, which this court finds reasonable. Courts have been cautioned against imposing punitive conditions. The Supreme Court in Westmont Holdings SDN BHD v Central Bank of Kenya & 2 others [2023] KESC 11 (KLR) held that: -*“A court could impose a condition precedent when imposing an order for security for costs in special and exceptional circumstances, such as extraordinary and important cases, for instance, election petitions. The same was, however, to be done in a manner that was reasonable and not to punish or subdue a genuine claim. In that regard, imposing a condition precedent was not in itself unconstitutional, provided it was not unreasonable to the extent that it impeded a party’s access to justice.”* 4. However, requiring security for a money decree is neither punitive nor unreasonable but a safeguard to balance the interests of both parties. 5. Having considered all the circumstances, this court finds that the Applicant/Appellant has not satisfactorily demonstrated substantial loss. However, in balancing the right of appeal with the 1st Respondents’ right to enjoy fruits of their judgment, it is in the interest of justice that the discretion is exercised conditionally **Final disposition** Accordingly, I make the following orders; 1. There shall be a stay of execution of the judgment dated 19th December 2025 and all consequential orders pending hearing and determination of the appeal. 2. The stay is conditional upon the Applicant depositing the entire decretal sum of Kshs. 1, 1,150,000/= in a joint interest-earning account in the names of the advocates for the parties within thirty (30) days from the date of this ruling, in default the stay shall automatically lapse and the Respondents are at liberty to execute. 3. The Applicant shall continue paying the monthly rent in the sum of Ksh 150,000/= as ordered by the tribunal 4. Costs of the application shall abide the outcome of the appeal. **It is so ordered.** **DATED**, **SIGNED** and **DELIVERED** virtually at **NAIROBI** on this 15th **day** of **July 2026.** **MOHAMMED N. KULLOW** **JUDGE**