[2009] KEHC 3577 (KLR)
The court found that the applicant had demonstrated sufficient cause for the grant of stay of execution pending appeal. The court was satisfied that the applicant would suffer substantial loss if stay was not granted, given the admitted financial difficulties of the plaintiffs and the risk that the decretal sum...
Source-derived case information.
- Citation
- [2009] KEHC 3577 (KLR)
- Parties
- Plaintiff: Shailesh Rajani; Plaintiff: Kenya United Steel Co. Ltd.; Defendant: Ponangapalli Venkata Romana Rao t/a Tact Consultancy Services
- Court
- High Court
- Court Station
- High Court at Nairobi (Milimani Commercial Courts)
- Jurisdiction
- Kenya
- Case Number
- Civil Case 188 of 2008
- Procedural Posture
- Stay Application / Ruling on Application for Stay of Execution Pending Appeal
- Outcome
- stay of execution granted on condition of security
- Legal Topics
- Stay of Execution, Security for Decree, Substantial Loss, Appeals, Arbitration Related Disputes
- Source Language
- en
Source-derived case record
Summary, issues, holding and outcome
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Parties
Shailesh Rajani
Plaintiff
Kenya United Steel Co. Ltd.
Plaintiff
Ponangapalli Venkata Romana Rao t/a Tact Consultancy Services
Defendant
Procedural Posture
Stay Application / Ruling on Application for Stay of Execution Pending Appeal
Legal Issues
- 1 Whether the applicant has demonstrated sufficient cause for grant of stay of execution pending appeal.
- 2 Whether substantial loss may result to the applicant if stay is not granted.
- 3 Whether the applicant has provided adequate security for the due performance of the decree.
Ratio Decidendi
The court found that the applicant had demonstrated sufficient cause for the grant of stay of execution pending appeal. The court was satisfied that the applicant would suffer substantial loss if stay was not granted, given the admitted financial difficulties of the plaintiffs and the risk that the decretal sum would not be recoverable if the appeal succeeded. The applicant had also offered adequate security by way of a bank guarantee for the full decretal amount, and the application was made without unreasonable delay. Accordingly, the court exercised its discretion to grant a conditional stay of execution, requiring the applicant to provide a bank guarantee within seven days, failing...
Court Disposition
stay of execution granted on condition of security
Orders
- Stay of execution of the decree is granted pending appeal, conditional upon the applicant providing a bank guarantee in the sum of Kshs.3,835,000, properly drawn and approved by counsel for the respondent, to be filed within 7 days.
- In default of filing the guarantee within 7 days, the stay granted shall lapse.
Full Case Text
Judgment text and source record
23 paragraphs
REPUBLIC OF KENYA
IN THE HIGH COURT OF KENYA
AT NAIROBI (MILIMANI COMMERCIAL COURTS)
Civil Case 188 of 2008
SHAILESH RAJANI ……………………………………. 1ST PLAINTIFF
KENYA UNITED STEEL CO. LTD. ……….………….. 2ND PLAINTIFF
VERSUS
PONANGAPALLI VENKATA ROMANA RAO
t/a TACT CONSULTANCY SERVICES ……………...... DEFENDANT
R U L I N G
Application by notice of motion dated 27/2/09 seeking order for stay of execution of decree of this court made on 6/2/2009 pending hearing and determination of appeal. Notice of appeal has been filed on 10/2/2009 and sufficient cause is shown as required under Order 41 rule 4 (1). The appeal has high chance of appeal. There is a right of appeal in this case. On the issue of substantial loss if the order of stay is not granted it is true the plaintiff has admitted that they are in financial difficulties and therefore if payment is made to them it shall be difficult to recover the same and the applicant has offered a security by way of banks guarantee in the sum of Kshs.3,835,000/=. There has been no delay in filing this application.
The defendant state that there is no demonstration of substantial loss. There is no evidence that the applicant can refund the decretal amount if the appeal is successful. The defendant has relied upon the decision of the court in HCC No.106 of 2002 – Kenya Oil Co. Ltd. vs. Westmount (Power) (Kenya) Ltd. where the court must be satisfied that substantial loss may result if orders are not granted. That is if appeal succeeds the respondent would not be in a position to make a full restitution.
(a) The applicant has to give such security as the court may order.
(b) That application has been made without unreasonable delay.
In that case the applicant was willing to furnish bank guarantee
to the total of Kshs.3,835,000/=. Mr. Ndegwa relied on the decision of court in regarding the requirement of Order 41 rule 2 which requires a demonstration of substantial loss. There was long argument by both sides. The dispute relates to arbitration proceedings.
In this matter the amount of decree is substantial and as applicant is already in poor financial position it may not be able to refund in the event of the success of appeal. I am of the view that this is a reasonable case to grant stay pending appeal.
I grant the stay on condition that the applicant shall provide a security by bankers’ guarantee in the sum of Kshs.3,835,000/= properly drawn and approved by counsel for the respondent. Such guarantee to be filed within the next 7 days and in default the stay granted shall lapse.
The applicant shall pay the costs of this application.
Orders accordingly.
DATED and DELIVERED at Nairobi this 4th day of May 2009.
JOYCE N. KHAMINWA
JUDGE