[2018] KEHC 4575 (KLR)

REPUBLIC OF KENYA

IN THE HIGH COURT OF KENYA

AT NAIROBI

CIVIL DIVISION

HIGH COURT CIVIL CASE NO. 16 OF 2018

RAPHAEL M. NZOMO...................................................1ST PLAINTIFF

DR. KENNEDY AMOKE................................................2ND PLAINTIFF

LAWRENCE OTIENO OUMA.......................................3RD PLAINTIFF

JOANNE MWANGI ........................................................4TH PLAINTIFF

JOHN KENNEDY WANYAMA......................................5TH PLAINTIFF

ROSEMARY LUGALIA KHAMATI.............................6TH PLAINTIFF

MERCY MUKEWA MUTUA.........................................7TH PLAINTIFF

SAMUEL ODERO OJANGA.........................................8TH PLAINTIFF

VERSUS

NAIROBI COUNTY GOVERNMENT..............................DEFENDANT

AND

NAIROBI CITY WATER &SEWERAGE

COMPANY LIMITED..........................................INTERESTED PARTY

RULING

1. The application dated 13th March, 2018 is brought under section 1A, 1B, 3, 3A, 63 of the Civil Procedure Act and Order 42 Rules 6 of the civil Procedure rules, 2010. The application seeks orders that there be a stay of execution of the ruling/order of this court delivered on 7th March, 2018 and all consequential orders arising therefrom pending hearing and determination of the Intended Appeal against the ruling and Orders of this Court delivered 7th March, 2018 on such terms that the Court may deem just and fit.

2. Secondly, that pending the hearing and determination of the Defendant’s intended appeal, there be a stay of arbitration proceedings in respect of the matters in this suit initiated by Plaintiffs letter dated 10th January, 2018 to the Defendant and Interested Party.

3. It is stated in the grounds and the affidavit in support of the application that the Applicants are aggrieved by the ruling of this court delivered on 7th March, 2017 and have lodged a Notice of Appeal. That the Appeal is arguable and raises several issues of law and fact and has good chances of success. That the ruling permitted the continuation of arbitration proceedings in respect of the dispute herein and the Plaintiff has threatened to initiate the arbitration proceedings and if the orders sought herein are not allowed the Applicant stands to suffer irreparable loss and the appeal rendered nugatory.

4. It is further stated that the dispute herein is sub-judice the petition between the parties in HCCC Nbi Petition NO. 563/17 and that there is therefore a likelihood of conflicting decisions over the issues of fact and law by the Court and the Arbitrator. Referring to the grounds of the intended Appeal, the Applicant contended that the Defendant and the Interested Party herein will suffer expenses, inconvenience and waste of time as the Arbitration proceedings are likely to be rendered useless in the event that the Appeal is successful.

5. The Applicants assertion is that no prejudice will be occasioned to the Respondents if the application herein is allowed as the remedy for their claims is statutorily provided for in damages. That on the other hand, the Defendant and the Interested Party cannot function or run the affairs of the Interested Party as the ruling restrained ordinary meetings of the Interested Party. The Appellant is willing to comply with the terms and conditions that the court may impose.

6. In response to the application, the Plaintiffs filed the grounds of objection dated 27th March, 2018 which state as follows:

1. A stay of execution cannot issue on an order of injunction, which is not a mandatory injunction;

2. The grounds of the application are issues that are by law designated to be handled by the Arbitrator under the Arbitration Act, 1995. That therefore, the defendant is at liberty to file before the Arbitrator the issues in the Notice of motion as an objection in limine

3. The Court does not have jurisdiction presently to hear the issues raised in the application now, but on appeal from the decision of the Arbitrator under section 17(6) and(7) of the Arbitration act, 1995.

4. The application is an abuse of court process, it invites the High Court to sit on appeal of its own decision. Issues raised were determined by the court and an order issued. The same issues cannot again be litigated before the High court but on appeal.

5. The Plaintiff shall suffer prejudice if any order sought herein is granted. That staying the order of court, shall mean that the Defendant can continue with the impugned decision to call for an Extra Ordinary Meeting contrary to the Article and law, to the egregious prejudice of the Plaintiffs.

7. The Defendant filed written submissions. The Plaintiff relied on the grounds of opposition and the Interested Party did not file any response. I have considered the application, the response to the same the submissions and the authorities filed.

8. I will first deal with the issue whether this court has jurisdiction to grant the orders sought. The Plaintiff’s contention is that a stay cannot issue on an order of injunction which is not a mandatory injunction. However, this court is of the contrary opinion.

9. The Court of Appeal held as follows in the case of National Bank of Kenya Ltd & another v Geoffrey Wahome Muotia [2016] eKLR:

“...we must first consider an argument raised by the respondent, which was to the effect that this court does not have jurisdiction to grant the orders sought because there are no positive orders capable of being stayed arising from the ruling of 11th November, 2015. In the respondent’s view, this application is incompetent and materially defective as it does not meet the threshold set out in rule 5(2) (b) of this Court’s rules.

Having read the impugned ruling of the High Court, and bearing in mind the manner in which the applicants have couched their prayer, we have no doubt that this court has the jurisdiction to grant an injunction pending the hearing and determination of an appeal in order to preserve the subject matter of the intended appeal, or where it would facilitate a proportionate resolution of the dispute before us as was the case in Mbaabu Mbui & another v Langata Gardens Limited [2011] eKLR (Civil Application Nbi 73 of 2011 (UR 49/2011) (emphasis supplied). This Court, in granting such an application will of course consider if there will be substantial loss, harm or damage that may be suffered by the applicants should the orders of stay be refused. See Lake Tanners Limited & 2 others v Oriental Commercial Bank Limited [2010] eKLR (Civil application No. 64 of 2010where the Court stated that this consideration will apply to an application for an order of injunction, or stay of execution, as the case may be pending appeal because the purpose of that order will be to preserve the status quo pending appeal.”

10. Order 42 rule 6(2) Civil Procedure Rules provides for stay of execution in the following terms:

“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.”

11. The instant application was filed on 13th March, 2018 following the delivery of the ruling the subject of the application on 7th March, 2018. The Application was filed without delay.

12. The Applicants have demonstrated that they stand to suffer substantial loss if there application is not allowed. This loss includes the continuation of the arbitration proceedings before the hearing of their appeal which may render the appeal nugatory.

13. I have considered the draft memorandum of appeal exhibited herein. There are arguable issues which include the question whether the dispute is capable of being referred to Arbitration and whether the dispute herein is sub judice HC Misc. Nbi 563/17.

14. The Applicant is willing to meet the terms and conditions that the court may impose. In my view, the Applicant has satisfied the conditions for the grant of the orders sought.

15. With the foregoing, I allow the application. To balance the competing interests of the parties herein, the interim orders granted on 24th January, 2018 which were extended on various dates up to the delivery of the ruling dated 7th March, 2018 to remain in force pending the hearing of the appeal.

Date, signed and delivered at Nairobi this 2nd day of August, 2018

B. THURANIRA JADEN

JUDGE