https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/7579

Northwave Credit Limited & 2 others v Kimotho & another (Commercial Appeal E165 of 2023) [2026] KEHC 7579 (KLR) (Commercial and Tax) (28 May 2026) (Ruling) Neutral citation: [2026] KEHC 7579 (KLR) Republic of Kenya In the High Court at Nairobi (Milimani Commercial Courts) Commercial and Tax Commercial Appeal E165 of 2023 PM Mulwa, J May 28, 2026 Between Northwave Credit Limited Applicant and Peter Njagi 1st Appellant Mercy Nkirote 2nd Appellant and Susan Wangui Kimotho 1st Respondent National Transport and Safety Authority 2nd Respondent Ruling 1.This ruling determines two applications. 2.The first application by Northwave Credit Limited is dated 26th November 2025. The Applicant seeks a stay of execution of the judgment delivered on 20th November 2025 and the sum deposited in court be used as security. 3.The application is premised on the grounds that the 1st Appellant/applicant is aggrieved by the judgment of the court and intends to appeal, that unless a stay of execution is issued, the 1st Respondent may proceed to enforce the judgment. And that the appeal will be rendered nugatory if a stay is not issued. 4.The 1st Respondent opposes the application by it replying affidavit sworn on 10th December 2025. She admits the Notice of Appeal was filed within fourteen days but avers it was not served within the mandatory seven days under the Court of Appeal Rules, rendering the intended appeal incompetent. She contends that the Appellant has already deposited Kshs. 1,688,986/= being half the decretal sum as security, and that upon dismissal of the appeal, the balance, together with interest, became payable. 5.She contends that the second appeal raises questions of fact, notably the refund of the purchase price for the Motor Vehicle KCL 922G, while a second appeal lies on a point of law. Having succeeded in trial and on appeal, she is entitled to the fruits of her judgment. 6.She avers that the indemnity claim against the National Transport and Safety Authority is a factual issue and that the Appellants must first satisfy the decree before pursuing indemnification. 7.She states the Decree is a money decree for refund of monies paid after the Appellants sold her a vehicle with a defective title allegedly caused by the fraud of George Ndung’u Gitau, and notes the Appellants can seek recovery from that party, so will not suffer substantial loss. 8.She prays for dismissal of the stay application; alternatively, release of the deposited Kshs. 1,688,986/= and an order that the balance of the decretal sum be deposited as further security. 9.The second application, by the 1st Respondent dated 10th December 2025, was brought under Section 1A, 1B, 3A and 91 of the Civil Procedure Act. Order 27, Rule 9 and 51, Rule 1 of the Civil Procedure Rules. The application seeks the release of Kshs. 1,688,986/= plus accrued interest, being half of the decretal amount deposited as security for the appeal in the joint names of the advocates, and the cost be provided for. 10.The application is opposed by the affidavit of Peter Njagi, sworn on 20th December 2025. He averred that the 1st Appellant is dissatisfied with the court’s judgment of 20th November 2025 and has lodged a Notice of Appeal in the Court of Appeal. He deposes that the deposited security should continue to serve as security pending the hearing and determination of the intended appeal, since security is a condition for granting a stay of execution pending appeal. The decree being a money decree, the release of the deposited funds to the 1st Respondent would render the intended appeal nugatory, and preserving the same will not unjustly prejudice the Respondent. The Appellant is exercising its legal right to appeal and not unjustly depriving the fruits of the judgment. 11.Both applications were canvassed by way of written submissions. Analysis and determination 12.I have considered the two applications, the affidavits on record and the submissions by counsel. In my view, the two applications are intertwined as they both revolve around the question whether the decretal sum deposited in court as security should remain preserved pending the intended appeal or be released to the 1st Respondent. 13.Stay of execution is provided for under Order 42 Rule 6 of the Civil Procedure Rules, 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 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 sub rule (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. 14.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. 15.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. 16.The judgment sought to be stayed was delivered on 20th November 2025, whereas the application for stay was filed on 26th November 2025. There was therefore no unreasonable delay in bringing the application. 17.The Respondent has argued that the intended appeal is incompetent for want of service of the Notice of Appeal within the timelines prescribed under the Court of Appeal Rules. However, the question whether or not the intended appeal is competent is a matter falling within the province of the appellate court. At this stage, this Court is only concerned with whether sufficient grounds have been laid to warrant preservation of the subject matter pending the intended appeal. 18.The decree herein is a money decree. Ordinarily, the mere fact that a decree is monetary does not by itself amount to substantial loss. An applicant must demonstrate that if payment is made, the respondent would be unable to refund the decretal sum in the event the intended appeal succeeds. 19.In the present case, the Appellant contends that release of the deposited sum would render the intended appeal nugatory. On the other hand, the Respondent maintains that the Appellants will suffer no prejudice since they may recover any sums from the alleged fraudster, George Ndung’u Gitau. The Respondent has also deponed that she is facing financial obligations arising from another decree issued against her. 20.While the Respondent is undoubtedly entitled to enjoy the fruits of her judgment, the Court must equally ensure that the intended appeal, if ultimately pursued, is not rendered illusory. The half-decretal sum already deposited was expressly deposited as security pending appeal. Releasing the same before the intended appeal is ventilated would defeat the very purpose for which the security was furnished. 21.I am further persuaded that preserving the deposited sum in a joint interest-earning account will not occasion undue prejudice to the Respondent, whereas its release may potentially render recovery difficult should the intended appeal succeed. 22.As regards the Respondent’s contention that the intended second appeal raises matters of fact rather than law, that is an issue to be determined by the appellate court and not this Court at this interlocutory stage. 23.In the circumstances, I am satisfied that the Appellant has met the threshold for the grant of a stay pending the intended appeal. However, the interests of justice require that the decretal sum be fully secured. 24.Consequently, I make the following orders:i.There shall be a stay of execution of the judgment delivered on 20th November 2025 pending the filing, hearing and determination of the intended appeal.ii.The sum of Kshs. 1,688,986/= already deposited shall remain in the joint interest-earning account in the names of the advocates for the parties as security pending the intended appeal.iii.The Appellants shall, within thirty (30) days, deposit the balance of the decretal sum of Kshs. 1,688,986/= into the same joint interest-earning account, failing which the stay orders herein shall automatically lapse.iv.The 1st Respondent’s application dated 10th December 2025 seeking release of the deposited sum is hereby declined.v.Costs of both applications shall abide by the outcome of the intended appeal.Orders accordingly RULING DELIVERED VIRTUALLY, DATED AND SIGNED AT NAIROBI THIS 28TH DAY OF MAY 2026.P.M. MULWAJUDGEIn the presence of:Mr. Makumi for 1st RespondentCourt Assistant: Lispa