https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/7745

Suekar Freight Ltd v Kobo 360 Ltd (Civil Appeal E979 of 2025) [2026] KEHC 7745 (KLR) (Civ) (4 June 2026) (Ruling) Neutral citation: [2026] KEHC 7745 (KLR) Republic of Kenya In the High Court at Nairobi (Milimani Law Courts) Civil Civil Appeal E979 of 2025 BW Murunga, J June 4, 2026 Between Suekar Freight Ltd Appellant and Kobo 360 Ltd Respondent (Being an appeal against the Judgment of Hon. A. Nyoike (SPM) delivered at Milimani Commercial Courts on 14th August, 2025 in MCCOMMSU/E402/2023) Ruling 1.Before this Court is a Notice of Motion dated 29th September 2025, filed by the Appellant, Suekar Freight Limited, seeking a temporary stay of execution of the judgment delivered by Hon. A. Nyoike, Senior Principal Magistrate (SPM), at the Milimani Commercial Courts on 14th August, 2025 in MCCOMMSU/E402/2023. 2.By that judgment, the Appellant was ordered to pay the Respondent, Kobo 360 Limited, the sum of Kshs. 5,070,331.08 together with interest at court rates from the date of judgment until payment in full, with costs of the suit. The Appellant’s counterclaim was dismissed. The application is expressed to be brought under Order 42 Rule 6, Order 51 Rules 1, 3 and 4 of the Civil Procedure Rules, 2010, Sections 1A, 1B, 3A and 63 of the Civil Procedure Act, Cap 21 of the Laws of Kenya. 3.The application is supported by the Supporting Affidavit of Susan Ngina Wamunyu, the Director of the Appellant company, sworn on 29th September, 2025, and the Appellant’s written submissions dated 10th December, 2025. The Respondent opposed the application through the written submissions dated 16th December, 2025. The Appellant’s Case 4.The Appellant contends that the judgment was delivered on 14th August, 2025 in the absence of both Counsel and was only uploaded onto the Case Tracking System (CTS) on 2nd September, 2025. The Appellant avers that it only became aware of the judgment on 24th September, 2025, and promptly filed its Memorandum of Appeal on 26th September, 2025, which it submits falls within the thirty (30) day period from the date of upload on the CTS. 5.On the substantive merits of the application, the Appellant deposes that it is a logistics company that relies heavily on its trucks and lorries to carry out its business. It warns that any attachment and sale of its movable assets in execution of the decree would irreparably cripple its operations and render the appeal nugatory. 6.The Appellant further contends that the Respondent is no longer domiciled in Kenya and holds no known immovable assets within the jurisdiction of this Court, thereby placing any order for costs or refund of decretal amounts at risk of being unenforceable. The Appellant proposed a security deposit of Kshs. 2,000,000/- as opposed to the full decretal sum, and indicated its willingness to furnish a Bank Guarantee. 7.On the issue of the appeal being filed out of time, the Appellant relies on Section 79G of the Civil Procedure Act, arguing that the thirty (30) day period should run from 2nd September, 2025, the date the judgment was uploaded on the CTS, and not from 14th August, 2025 when it was purportedly delivered on MS Teams, given that no notice was issued to either party and both counsels were absent. The Respondent's Case 8.The Respondent raises two principal objections. First, it contends that the appeal is incompetent having been filed outside the mandatory thirty (30) day period stipulated under Section 79G of the Civil Procedure Act, running from 14th August, 2025, the date of delivery of judgment. The Respondent argues that since no application for extension of time was filed, the appeal is fatally defective and this Court lacks jurisdiction to entertain it, including the present application for stay. 9.Second, and without prejudice to the foregoing, the Respondent submits that the Appellant has not met the three-pronged test under Order 42 Rule 6(2) of the Civil Procedure Rules, 2010, in that:a.No substantial loss has been demonstrated with any specificity or supporting documentary evidence;b.No credible or immediately realisable security has been furnished or proposed; andc.The mere allegations of financial hardship, unsupported by audited accounts or financial statements, are insufficient to anchor the exercise of this Court’s discretion in the Appellant’s favour. 10.The Respondent urges that in any event, if stay is granted, it should be conditioned on deposit of the full decretal sum. Issues for Determination 11.Two issues arise for determination in this application:a.Whether the appeal before this Court is competent, having regard to the provisions of Section 79G of the Civil Procedure Act; andb.Whether the Appellant has satisfied the prerequisites for the grant of a stay of execution pending appeal under Order 42 Rule 6(2) of the Civil Procedure Rules, 2010. Analysis and Determination 12.The Respondent submits that the appeal was filed out of time and is therefore fatally defective. This is an issue that goes to the very jurisdiction of this Court and must be addressed first. Section 79G of the Civil Procedure Act provides that every appeal from a subordinate court to the High Court shall be filed within thirty (30) days from the date of the decree or order appealed against. 13.There is no dispute that the judgment bears the date of 14th August, 2025. A straightforward computation would place the deadline for filing appeal at 13th September, 2025. The Memorandum of Appeal was filed on 26th September, 2025, which is thirteen (13) days after the prima facie deadline. 14.The Appellant has also raised a critical factual averment that the judgment was not notified to either party, was not delivered in open court in the presence of the parties, and was only uploaded onto the Case Tracking System (CTS) on 2nd September, 2025. The Appellant avers it only became aware of the judgment on 24th September, 2025. This is not controverted in substance by the Respondent, who has not filed any replying affidavit in response to these specific depositions. 15.It is a well-established principle of natural justice that a party cannot be bound by a judicial act of which it has no notice. The right of appeal is a substantive right, and courts should be slow to shut out a party on procedural grounds where there is genuine cause to believe the party was not afforded the opportunity to exercise that right. 16.In Nicholas Kiptoo Arap Korir Salat v Independent Electoral and Boundaries Commission & 7 Others [2014] eKLR, the Supreme Court of Kenya held that justice demands a holistic examination of all circumstances before a court declines jurisdiction on procedural grounds, cautioning that procedural technicalities should never be used to defeat substantive justice. 17.In this case, both Counsel were absent on the delivery date, no formal notice was issued, and the judgment was only uploaded nearly three weeks later. In such circumstances, to hold rigidly that the appeal clock started running on 14th August, 2025 would be to countenance a violation of the right to a fair hearing under Article 50 of the Constitution of Kenya, 2010. 18.This Court is guided by the overriding objective under Sections 1A and 1B of the Civil Procedure Act, which mandate courts to facilitate the just determination of proceedings and to guard against procedures being used to defeat the ends of justice. Computing the thirty-day period from 2nd September, 2025, the date of CTS upload, which is the earliest confirmed date of constructive notice, the Memorandum of Appeal filed on 26th September, 2025 is within time. The appeal is, in the circumstances of this case, competent, and this Court proceeds to consider the application on its merits. 19.Moving to the prerequisites for stay of execution, Order 42 Rule 6(2) of the Civil Procedure Rules, 2010 sets out the conditions for the grant of a stay of execution pending appeal. It provides that no such order shall be made 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; andb.such security as the Court orders for the due performance of such decree or order as may ultimately be binding on the applicant has been given. 20.The discretion to grant a stay of execution is not to be exercised capriciously. In Butt v Rent Restriction Tribunal [1979], the Court of Appeal held that the discretion of the court must be exercised in such a way as to ensure that an appeal, if successful, is not rendered nugatory, while at the same time protecting the Respondent's right to enjoy the fruits of a judgment legitimately obtained. 21.It is common ground that the Appellant filed this application on 29th September 2025, shortly after learning of the judgment on 24th September, 2025. The application was filed within five (5) days of the Appellant’s awareness of the judgment. There was evidently no unreasonable delay. This limb of Order 42 Rule 6(2) is satisfied. 22.The question of substantial loss has generated considerable debate in the authorities. The Respondent urges this Court to find that the Appellant has merely made bare, unsupported assertions and has not filed audited accounts or financial statements to demonstrate that payment of the decretal sum would cripple its operations. Reliance was placed on Kiambu County Council v Coffee Board of Kenya & Others [2011] eKLR, where the Court declined to grant stay where no accounts were produced to demonstrate financial prejudice. That is a persuasive consideration. 23.However, the concept of substantial loss is not restricted to financial ruin demonstrated by documentary evidence alone. In Sewankambo Dickson Vs. Ziwa Abby HCT-00-CC MA 0178 of 2005, the High Court of Uganda at Kampala restated that“…substantial loss is a qualitative concept. It refers to any loss, great or small, that is real worth or value, as distinguished from a loss without value or loss that is merely nominal...insistence on a policy or practice that mandates security, for the entire decretal amount is likely to stifle possible appeals –especially in a Commercial Court, such as ours, where the underlying transactions typically tend to lead to colossal decretal amounts”., 24.The Applicant must therefore establish factors showing that execution will create a state of affairs that will irreparably affect or negate the very essential core of the Applicant as the eventual successful party in the appeal. 25.In the present case, the Appellant is a logistics company that, as deposed by its Director, relies fundamentally on its trucks and lorries to conduct business. The decree is for a sum of Kshs. 5,070,331.08. The uncontroverted deposition is that the Appellant is not in a financial position to settle this amount on demand, and that execution, which would involve attachment of its trucks and movable assets, would cripple its core operations. The Respondent has not filed a replying affidavit to controvert these depositions. 26.In the case of Kenya Shell Limited v Benjamin Karuga Kigibu & Ruth Wairimu Karuga (1982-1988) 1 KAR 1018, the Court of Appeal held that substantial loss in its various forms is the cornerstone of the jurisdiction for granting stay. The Court held that:“It is usually a good rule to see if Order 41 Rule 4 of the Civil Procedure Rules can be substantiated. 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 cornerstone of both jurisdiction for granting stay” 27.Where execution would result in the attachment of the very instruments of a company’s trade, leaving it unable to continue operations or to enjoy the fruits of a successful appeal, the threshold of substantial loss is met. 28.There is an additional and important dimension. The Appellant has deposed, and this too is uncontroverted, that the Respondent is no longer domiciled in Kenya and holds no known immovable assets within the jurisdiction of this Court. If the Appellant pays the decretal sum and its appeal succeeds, recovering that money from a party with no traceable assets in Kenya would be an exercise in futility. 29.This risk of irreversibility is a recognized form of substantial loss. The substantial loss in a money decree lies in the inability of the Respondent to refund the decretal sum should the appeal succeed. Where there is a real risk that monies paid over cannot be recovered, a stay is warranted. I am persuaded that this limb is met. 30.The third and final prerequisite is that the Applicant must furnish such security as the Court orders for the due performance of the decree. The Respondent insisted on the full decretal amount of Kshs. 5,070,331.08, while the Appellant proposed Kshs. 2,000,000/-. The Respondent further raised concerns that the proposed bank guarantee has not been presented in draft form and is of uncertain credibility. 31.The law on this point is that this Court retains full discretion to determine the nature and quantum of security. It is not bound by the amount proposed by either party. In Antoine Ndiaye v African Virtual University, Gikonyo J struck a balance between the competing rights of the parties by ordering payment of one half of the decretal sum to the Respondent while the other half was deposited into a joint interest-earning account. That approach was guided by the principle that the court should hold both parties' rights in an almost symmetrical bound. 32.I have considered the circumstances of this matter carefully. The Appellant is a domestic company with known assets within this jurisdiction, while the Respondent, at least on the uncontroverted evidence before this Court, is not presently operating within Kenya and holds no known immovable assets here. The Respondent’s right to the fruits of its judgment must nonetheless be protected, but so too must the Appellant’s right of appeal. 33.The balance of justice, in my view, lies in a conditional stay that simultaneously imposes a meaningful security obligation on the Appellant and cushions the Respondent against the risk of an indefinite wait for the fruits of its judgment. The amount of Kshs. 2,000,000/- proposed by the Appellant is, in the context of a decree of Kshs. 5,070,331.08, insufficient to adequately secure the Respondent’s interests. 34.Taking all the foregoing into account, I am satisfied that the Appellant has met the requirements under Order 42 Rule 6(2) of the Civil Procedure Rules, 2010. The appeal raises arguable points of law. Orders 35.In the premises and having carefully weighed the rights and interests of both parties, I make the following orders:i.There is ordered a stay of execution of the judgment and decree of Hon. A. Nyoike (SPM) in MCCOMMSU/E402/2023 dated 14th August, 2025, pending the hearing and determination of the appeal herein.ii.The stay of execution granted herein is conditional upon the Appellant depositing a sum of Kshs. 3,000,000/- (Kenya Shillings Three Million) in a joint interest-earning account held in the names of the Advocates on record for both parties within thirty (30) days of the date of this ruling.iii.In the event the Appellant fails to make the aforesaid deposit within the stipulated period, this stay shall lapse automatically without further order of the Court and the Respondent shall be at liberty to proceed with execution.iv.The costs of this application shall be in the cause. DATED, SIGNED AND DELIVERED AT NAIROBI THIS 4TH DAY OF JUNE 2026.BENARD WAFULA MURUNGAJUDGEDelivered on virtual platform in the presence ofKaromo for the AppellantMumbi h/b for Kendi for the RespondentKevin Babu - Court Assistant