[2019] KEHC 5134 (KLR)
The court found that the appellant had demonstrated apprehension that if the decretal sum is paid to the 1st respondent, who resides in the United States, and the appeal succeeds, recovery may be difficult. The court noted that the appellant's credibility as an investment bank was not questioned and that the...
Source-derived case information.
- Citation
- [2019] KEHC 5134 (KLR)
- Parties
- Appellant: Suntra Investment Bank Limited; Respondent: George Mbugua Kiarie; Respondent: Custody & Registrar Services Limited; Respondent: Central Depository Settlement Corporation Limited
- Court
- High Court
- Court Station
- High Court at Nairobi (Milimani Law Courts)
- Jurisdiction
- Kenya
- Case Number
- Civil Appeal 427 of 2018
- Procedural Posture
- Civil Appeal / Application for Stay of Execution Pending Appeal
- Outcome
- Application for stay of execution pending appeal allowed on condition of provision of bank guarantee.
- Judges
- A Mbogholi-Msagha
- Legal Topics
- Stay of Execution, Security for Decretal Sum, Balance of Convenience, Substantial Loss, Appellate Jurisdiction
- Source Language
- en
Source-derived case record
Summary, issues, holding and outcome
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Parties
Suntra Investment Bank Limited
Appellant
George Mbugua Kiarie
Respondent
Custody & Registrar Services Limited
Respondent
Central Depository Settlement Corporation Limited
Respondent
Procedural Posture
Civil Appeal / Application for Stay of Execution Pending Appeal
Legal Issues
- 1 Whether the appellant has satisfied the conditions for grant of stay of execution pending appeal under Order 42 Rule 6 of the Civil Procedure Rules.
- 2 Whether the appellant should provide security for the due performance of the decree.
- 3 Whether the interests of both parties can be balanced pending the hearing of the appeal.
Ratio Decidendi
The court found that the appellant had demonstrated apprehension that if the decretal sum is paid to the 1st respondent, who resides in the United States, and the appeal succeeds, recovery may be difficult. The court noted that the appellant's credibility as an investment bank was not questioned and that the requirements of Order 42 Rule 6 had been met in terms of timelines. Although the appellant had not offered security, the court considered the risk of non-recovery and the need to balance the interests of both parties. Consequently, the court exercised its discretion to grant a stay of execution on condition that the appellant posts a bank guarantee for the entire decretal sum within...
Court Disposition
Application for stay of execution pending appeal allowed on condition of provision of bank guarantee.
Orders
- The appellant shall post a bank guarantee for the entire decretal sum pending the hearing of the appeal.
- The bank guarantee shall be posted within 14 days from the date of this ruling and/or extraction and service of this order.
Full Case Text
Judgment text and source record
28 paragraphs
REPUBLIC OF KENYA
IN THE HIGH COURT OF KENYA
AT NAIROBI
CIVIL APPEAL NO. 427 OF 2018
SUNTRA INVESTIMENT BANK LIMITED.....................APPELLANT
VERSUS
GEORGE MBUGUA KIARIE...................................1ST RESPONDENT
CUSTODY & REGISTRAR
SERVICES LIMITED ...............................................2ND RESPODNENT
CENTRAL DEPOSITORY
SETTLEMETN CORPORATION LIMITED.........3RD RESPONDENT
(Being an appeal from the Judgment and orders given on 30th May, 2018
by Hon. E.K. Usui, Senior Principal Magistrate
in CMCC NO. 2227 OF 2009)
RULING
This is an application by way of Notice of Motion under Order 42 Rule 6 of the Civil Procedure Rules for an order that there be a stay of execution of the judgment and decree of the lower court issued on 30th May, 2018 pending the hearing and determination of the appeal. The application is supported by an affidavit sworn by the Head of customer care/agents coordination of the appellant, alongside grounds set out on the face of the application.
The application is opposed and the respondents have filed grounds of opposition and or affidavits in reply. Counsel for the parties have also filed submissions and cited some authorities. The appellant has already filed the record of appeal. The same has also been served upon the respondents. What is being awaited is the lower court file to facilitate the hearing of the appeal.
The requirements under Order 42 rule 6 have been fulfilled in terms of timelines and in any case, no serious prejudice has been raised by the respondents in terms of timelines. However, the appellant is said to have offered no security for the order sought and therefore should not be granted the said orders.
There are several observations that have to be highlighted in this application. There is a judgment in favour of the 1st respondent against the appellant in the sum of Kshs. 859,880. 90 together with costs and interest. Whereas the 1st respondent is entitled to the fruits of his judgment, the appellant has the right of appeal and the court is bound to balance the interests of both parties. It is true that the appellant must demonstrate substantial loss may be suffered if the order for stay is not granted.
It is also generally accepted that where an applicant expresses the fear that if the decretal sum is paid and the appeal succeeds, the respondent may not be in a position to refund the same, the burden of proof shifts to the said respondent to disapprove that allegation- see Civil Appeal No. 18 of 2017 Amal Hauliers Limited vs. Abdulnassir Abubakar Hassan (2017) e KLR.The order sought is discretionary which discretion should be exercised judicially – seeButt vs. Rent Restriction Tribunal (1982) KLR 417.
The 1st respondent in whose favour the lower court found is said to be a resident of the United States. In fact, evidence in the lower court was given by his sister on his behalf. The appellant has expressed apprehension that if the decretal sum is paid and the appeal succeeds, it may not be recovered from the 1st respondent.
The appellant is said to be an investment bank whose credibility has not been questioned by the respondents. Whereas it is true that no security has been offered by the appellant, the concern raised against the 1st respondent is justified. Balancing the interests of the parties herein, I am inclined to allow the application on the following terms,
a. The appellant shall post a Bank guarantee for the entire decretal sum pending the hearing of the appeal.
b. This shall be done within 14 days from the date of this ruling and or extraction and service of this order.
The costs shall abide by the result of the appeal.
Dated, signed and delivered at Nairobi this 4th Day of July, 2019.
A. MBOGHOLI MSAGHA
JUDGE