[2025] UGCommC 48


# **IN THE HIGH COURT OF UGANDA SITTING AT KAMPALA COMMERCIAL DIVISION**

Reportable Miscellaneous Application No. 0559 of 2025 (Arising from Arbitration Causes No. 0038 and 0046 of 2025 (consolidated) In the matter between

## **KAMPALA INTERNATIONAL UNIVERSITY APPLICANT**

**And**

# **HOUSING FINANCE COMPANY LIMITED RESPONDENT**

**Heard: 31st March, 2025. Delivered: 4th April, 2025.**

*Civil Procedure - stay of execution - court must be satisfied that the case is arguable on appeal or that the case cannot be categorised as hopeless - In cases involving only monetary awards, special or exceptional circumstances justifying the grant of a stay of execution - The most important factor that must weigh with any Court dealing with motion for stay of execution is the question whether the judgment creditors will be able to refund the judgment debt if the appeal succeeds - Courts are more likely to grant a stay of execution when there is a strong possibility that the execution of the decree will render the appellant unable to afford the costs of the appeal, or otherwise cripple their ability to pursue their case, thereby paralysing the exercise of their right of appeal - A judgment debtor though cannot obtain a stay of execution by arguing only that he or she would be ruined financially.*

## **RULING**

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# **STEPHEN MUBIRU, J.**

The background;

- [1] Sometime during the year 2010, Kampala International University sought to borrow a sum of US \$ 15,000,000 from the Housing Finance Company of Kenya, to part finance its project for the expansion of existing facilities and construct new ones, including lecture rooms, administration blocks, hostels, dining facilities, library and staff accommodation, complete with other contingent extremal work, at its university campus in Kitengela, Kajiado County, in Kenya. Housing Finance Company of Kenya could only raise US \$ 10,000,000 initially but later raised an additional US \$ 3,700,000 which it advanced to the applicant. When the applicant defaulted on its loan obligations, Housing Finance Company of Kenya recalled the total outstanding loan, together with interest due, amounting to US \$ 11,675,782.30 as at 29th February, 2016. The applicant disputed recall of the loan, contending that Housing Finance Company of Kenya had defaulted on its obligation to disburse the full amount of US \$ 15,000,000. - [2] A dispute having sprouted between the two parties, it was submitted to a single arbitrator in Kenya for resolution. The applicant claimed damages for breach of contract while the respondent counterclaimed for the recovery of the outstanding amount of the loan. In an award handed down on 17th September, 2019 the Tribunal offset the claim against the counterclaim and ultimately decided in favour of the respondent, directing the applicant was to pay the respondent a sum of US \$ 12,767,508.33. Interest was to accrue on the amount due at the rate of 9.5% per annum compounded from 16th January, 2018 until payment in full. The applicant was ordered to bear 90% of the respondent's costs. - [3] Dissatisfied with the outcome, the applicant filed an application for setting it aside. In a judgment delivered by the High Court of Kenya on 16th September, 2021 the Court dismissed the application but decided that repayment, servicing of the facility and/or redemption of the securities was to be on the basis of the terms of the various contracts of the loan facility(ies) and the several securities executed by the parties, rather than within the period of 30 days that the arbitrator had directed.

Further appeals to the Court of Appeal and the Supreme Court of Kenya by the applicant, were unsuccessful. When the respondent sought the recognition and enforcement of the Final Arbitral Award in Uganda, the applicant objected. In a ruling delivered by this Court on 10th March, 2025 the applicant's objection was dismissed. The Final Arbitral Award was recognised and leave was granted for its enforcement in the same manner as a judgement, order or decree of this court.

### The application;

- [4] The application by Notice of motion is made under the provisions of section 37 of *The Judicature Act*; section 98 of *The Civil Procedure Act*, Rules 42 and 70 of *The Judicature (Court of Appeal Rules) Directions*, Order 43 rule 4 and Order 51 Rule 1 and 3 of *The Civil Procedure Rules*. The applicant seeks an order directing that the enforcement or execution of orders of the High Court in consolidated Arbitration Causes No. 38 and 46 of 2024, including the enforcement and execution in Uganda, of the Final Arbitral Award handed down in Nairobi Kenya between the parties by Mr. Collins Namachanja on 19th September 2019 as a judgement, order and decree of the High Court of Uganda and recovery of the decretal sums therein and costs, be stayed pending the determination of the applicant's appeal to the Court Appeal, and that the costs be provided for. - [5] It is the applicant's case that it has since filed has filed a Notice appeal and requested this Court for the record of proceedings to enable it prepare and file the Memorandum and Record appeal and is still waiting for the same to be availed by this Court. The Notice of Appeal has been transmitted to this court and designated a number COA-00-CV-CA-0167-2025. The intended appeal raises substantial triable issues or questions of law and fact, of great public importance, touching on the recognition and enforcement of foreign arbitral award in Uganda. In the meantime, there is an imminent threat by the respondent to execute the orders of the High Court as against the applicant, before the hearing and determination of the applicant's appeal. There is need to protect the applicant's unrestricted right of

appeal by staying the execution of the decree and all orders arising from the ruling in the consolidated Arbitration Causes No. 0036 and 0046 of 2024 and maintaining the status quo, until determination of the appeal. The applicant shall suffer substantial loss and inconvenience and the appeal shall be rendered nugatory if the ruling and orders in consolidated Arbitration Causes No. 0036 and 0046 of 2024, are executed while the appeal is pending disposal in the Court of Appeal. The application has been made without unreasonable delay and this Court is better placed to safeguard the applicant's right of appeal.

### The submissions of Counsel for the applicant;

[6] Counsel for the applicant submitted that there is a notice of appeal which has been filed annexure G1. The appeal is not frivolous and it has a likelihood of success as per paragraph 7 of the affidavit in reply. There is a right of appeal. It is a *New York Convention* award. The right of appeal arises from section 10 of *The Judicature Act* which renders orders and decrees of this Court appealable to the Court of Appeal and this is a matter of law as per the *Cardinal Nsubuga Case*. Section 38 relates to domestic arbitration not to *New York Convention* awards. Section 35 is the only one imported for the part of the Act relating to *The New York Convention* awards. Had the Legislature intended for section 35 to apply to *New York Convention* awards they should have imported it but did not do so. There is no ouster of jurisdiction applicable to section 38 on an appeal arising in connection to the enforcement of such an award. The cases decided in the Court of Appeal and Supreme Court have arisen from domestic awards. Once a notice of appeal has been filed it is valid unless struck out by the Court of Appeal. For purposes of stay it suffices that there is a notice of appeal on record. It was held so in *Visare (U) limited v. Festus Katerega and others, Mics Application No. 2885 of 2023* at pages 15 and 16. It is the Court of appeal to sit in application to strike out the notice of appeal.

- [7] The major issue on appeal is whether the High Court should allow a remedy set aside by the Court at the seat. An appellate Court may have a different opinion from the High Court. As regards the appeal being rendered nugatory; the remedy is for a sum of money in the range of US \$ 13,000,000 para 8 (i) of the affidavit in support. The applicant is a University and the belief is that the respondent will target its bank accounts. Para 8 (vii) states that the University has over 30,000 students. The impact of the recovery will be that there is no University. The respondent has security in Kenya and therefore there is no need for security for due performance. The respondent has already advertised the University property in Kenya. The application was filed within one week of the ruling and there is an imminent threat, as per para 7 of the affidavit and annexure "I" thereto. The merits will not be affected. The respondent is a foreign company based in Kenya and it has no assets based in Uganda. In the event the appeal succeeds, there will be no recourse to anything in Uganda. The security in Kenya is owned by the applicant. The application should be allowed unconditionally with costs in the cause. - [8] It is section 34 that was addressed in the *Aya Case* which is not one of the provision adapted to the New York Convention awards by *The Arbitration and Conciliation Act*. The Court of Appeal never dealt with the section of the Act on appeals. The application to strike out was premised on two grounds, the first being that the application was out of time. The pronouncements on right of appeal were obiter after the Court had decided that the first ground alone was enough to determine the application. The respondent has refused to disclose how much it has recovered from the foreclosure in Kenya. They have repeatedly asserted without evidence that the value is not enough. Even now they have not produced any valuation report. The applicants prefer that the application is granted unconditionally without a requirement for providing security for due performance, or dismissed so that they may have a chance to apply afresh.

### The submissions of Counsel for the respondent;

- [9] Counsel for the respondent submitted that there is no right of appeal. In *Industrial Development Corporation of South Africa Limited v. Aya Investments Uganda Limited, C. A. Civil Misc. Application No. 1104 of 2023* when dealing with a foreign award from South Africa the Court held that there was no right of appeal. They Court of Appeal too was dealing with a foreign award. The other decisions relied on in that ruling dealt with the same issue and they were from the Supreme Court. There is no likelihood of success as a ground of appeal. If they seek to persuade the Court to depart from that decision, then the appeal has no merit based on the proposed grounds. The respondent has suffered substantial loss with an amount outstanding for over eight years. It is a private contract by a private company with no connotations of public interest. There is no public good involved. - [10] Relative hardship should apply; students can find alternative institutions but the Bank has no recourse. The borrowing was on the assumption that the property would be developed to an agreed level which was never achieved. That failure had an impact on the capacity of the property to secure the entire debt. That failure negatively affected the value of the security and now it is inadequate to secure the outstanding amount. There is no threat of execution except an attempt to extract an order. In the alternative, we demand a bank guarantee in Uganda for the entire sum, or in the further alternative, they should deposit in Court property worth 75% of the outstanding sum.

### The decision;

[11] According to Order 43 rule 4 (3) of *The Civil Procedure Rules*, an application of this nature must be made after notice of appeal has been filed and the applicant should be prepared to meet the conditions set out in that Order including; furnishing proof of the fact that substantial loss may result to the applicant unless the stay of execution is granted; that the application has been made without unreasonable delay; and that the applicant has given security for due performance of the decree or order as may ultimately be binding upon him (see *Lawrence Musiitwa Kyazze v. Eunice Businge, S. C. Civil Application No 18 of 1990*).

- [12] The Court of Appeal in *Kyambogo University v. Prof. Isaiah Omolo Ndiege, C. A. Misc. Civil Application No 341 of 2013* expanded the considerations to include: there is serious or imminent threat of execution of the decree or order and if the application is not granted, the appeal would be rendered nugatory; that the appeal is not frivolous and has a likelihood of success; that refusal to grant the stay would inflict more hardship than it would avoid. - i. A notice of appeal has been filed. - [13] The applicant filed a notice of appeal on 12th March, 2025 and applied for certified copy of the record of proceedings. The applicant has satisfied this requirement. - ii. The application has been made without unreasonable delay. - [14] Applications for a stay of execution ought to be made within a reasonable time. Whether delay is unreasonable will depend on the peculiar facts of each case. Delay must be assessed according to the circumstances of each case. The reckoning of time to determine if a delay is unreasonable begins at the time the decree or order is sealed and becomes enforceable. In the instant case, the ruling was rendered on 10th March, 2025. This application was filed on 18th March, 2025. I therefore do not find any unreasonable delay in the filing this application. - iii. The appeal is not frivolous and has a likelihood of success; - [15] An appeal by itself does not operate as a stay of proceedings under a decree or order appealed from nor should execution of a decree be stayed by reason only of an appeal having been preferred from the decree (see Order 43 rule 4 of *The Civil Procedure Rules* and Rule 6 (2) of *The Judicature (Court of Appeal Rules)*

*Directions*). In other words, the ordinary rule is that an execution of the decree need not be stayed pending an appeal unless the appellant shows good cause. A presumption lies in favour of the integrity of the proceedings of any court of general jurisdiction. The administration of justice rests largely upon the presumption of the law that a court, acting within its jurisdiction, has acted impartially and honestly, and with integrity such that a final judgment of a court of general and competent jurisdiction is always presumed to be right.

- [16] The court must be satisfied that the prospects of the appeal succeeding are not remote but that there is a realistic chance of succeeding. Court at this stage is not required to analyse whether the grounds of the proposed appeal will succeed, but merely whether there is real prospect of success. More is required to be established than that there is a mere possibility of success. That the case is arguable on appeal or that the case cannot be categorised as hopeless. There should be a sound, rational basis, founded on the facts and the law, and a measure of certainty justifying the conclusion that the appellate court will differ from the court whose judgment has been appealed against; that the appellate court could reasonably arrive at a conclusion different from that of the trial court. - [17] The appeal will be considered frivolous if *prima facie* the grounds intended to be raised are without any reasonable basis in law or equity and cannot be supported by a good faith argument. If there is a strong showing that the appeal has no merit, that is strong evidence that it was filed for delay or not in good faith. Additional evidence indicating a frivolous appeal is the applicant's conduct of prior litigation which may show that the appeal is merely part of a series of suits, applications and appeals over the same subject matter in which the applicant has engaged with no success or no chance of success. The prior litigation or procedural history can be used to establish the lack of merit in the present appeal or the bad faith of the applicant in filing the present appeal.

- [18] The competence of the intended appeal is contested by the respondent who contends that the applicant has no automatic right of appeal. The position taken by the respondent is supported by the current jurisprudence of the superior Courts. It is an established principle in Uganda's jurisprudence that in matters of arbitration, the general statutory right of appeal is specifically barred or excluded by section 9 of *The Arbitration and Conciliation Act* which provides for the limited extent of Court's intervention. There is no right of appeal from the decision of the High Court to the Court of Appeal in matters of arbitration, unless; (a) "the parties have so agreed that an appeal shall lie;" and (b) the High court grants leave to appeal, or where the High court fails to grant leave, the Court of Appeal grants special leave to appeal (see section 38 (3) (a) and (b) of *The Arbitration and Conciliation Act*, *B. D. Bilimoria and another v. T. D. Bilimoria [1962] 1 EA 198; Babcon Uganda Limited v. Mbale Resort Hotel Limited, S. C. Civil Appeal 6 of 2016* and *Mohammed Mohammed Hamid v. Roko Construction, S. C. Civil Appeal No. 14 of 2015*). - [19] In the intended appeal, Counsel for the applicant seek to distinguish those decisions mainly by advancing the argument that section 38 of *The Arbitration and Conciliation Act*, does not apply to foreign awards since the Act references and applies only section 35 to the enforcement of foreign arbitral awards. The applicant has provided Court, in the affidavit supporting the application, with a draft list of the grounds it intends to raise on appeal to the Court of Appeal. It also has adverted to the arguments it intends to raise in support of those grounds. The intended grounds of appeal include the following: - a) The learned trial judge erred in law and fact when he allowed the recognition and enforcement of an arbitral award in Uganda, which award had been set aside by a competent court at the seat of arbitration which was Kenya. - b) The learned trial judge erred in law and fact when he sat in judgement of the ruling and orders of the High Court of Kenya which had set aside part of the impugned arbitral award. - c) The Learned Judge erred in law and fact, when he failed to consider and determine the issue of whether the Respondent was clothed with legal authority from Housing Finance Company of Kenya Limited (the Lender), to maintain the action for recovery of the claimed sums through an application or recognition and enforcement of the Arbitral Award. - d) The learned trial judge erred in law and fact when he allowed the parallel execution in Uganda of an Award when execution proceedings were also ongoing in Kenya in respect of the same arbitral award against Kampala International University Limited. - e) The trial judge erred in law and fact when he wrongly assumed jurisdiction to enforce the impugned offer letters and securities. - f) The learned trial judge erred in law when he misconstrued the provisions of the New York Convention and their applicability to recognition and enforcement of an Arbitral award partly set aside by a competent court at the seat of the arbitration. - [20] While not always a primary factor, the Court is required to consider there is real prospect of success of the appeal. The court will not generally speculate upon the applicant's prospect of success, but may make some preliminary assessment about whether the appellant has an arguable case, in order to exclude an appeal lodged without any real prospect of success simply to gain time. In order to obtain a stay of execution, a party must demonstrate to the Court that there is a reasonable basis in law and equity to support the grounds raised and that they can be supported by good faith argument. There should not be a serious doubt as to the merits of the intended appeal. Where the intended appeal is clearly unmeritorious, vexatious or frivolous, a stay will not be granted. Where the intended appeal is against well-established principles of law and binding precedents, but there is a likelihood of reconsideration by virtue of creative argument, a conditional stay will be granted. - [21] Having perused the ruling, the pleadings and the proceedings leading to the ruling, I have formed the opinion that that the intended appeal is against what appears to be well-established principles of law and binding precedents, but there is a likelihood of reconsideration on the basis of creative argument, in which case a

conditional stay may be granted if the other requirements are satisfied. This is in light of the fact that it is possible that the Court of Appeal could reasonably arrive at a conclusion different from its earlier decisions. The applicant has satisfied this requirement too.

#### iv. The appeal would be rendered nugatory;

- [22] Nugatory means "of no force or effect; useless; invalid." In this context, the term "nugatory" has to be given its full meaning. It does not only mean worthless, futile or invalid, it also means trifling. Whether or not an Appeal will be rendered nugatory if a stay is not granted depends on whether or not what is sought to be stayed if allowed to happen will be reversible, or if it is not reversible, whether damages will reasonably compensate the party aggrieved, or it is in the public interest to grant a stay. This may include all cases where it is necessary to preserve the status quo pending appeal, in aid of and to preserve the appellate power, so that the rights involved in the appeal may not be lost or reduced by reason of an intervening execution of the judgment. A stay of execution will be granted where failure to grant it will destroy the subject matter of the proceedings or foist upon the Court of Appeal, a situation of complete helplessness or where it will render nugatory any order or orders of the Court of Appeal. - [23] It has always been recognised that the Court's power to grant a stay of execution is entirely discretionary, but that discretion should be exercised based on legal principles. This is so, because of the principle of law that a Judgment of a Court is presumed to be correct and rightly made until the contrary is proved or established. It is well settled that a court of law does not make the practice of depriving a successful litigant of the fruit of his litigation and thereby locking up the funds to which he is, prima facie, entitled pending the determination of the appeal. Courts will not therefore make the practice of depriving a successful litigant of the fruits of his success, especially in disputes of a commercial nature in which the relief granted is entirely monetary. The decision of the court in such matter only affects

cash flows, not involving any physical assets that require preservation until the final disposal of the appeal.

- [24] In cases involving only monetary awards, special or exceptional circumstances justifying the grant of a stay of execution have to be presented and one of the ways of doing this is to show that execution would provide a situation in which even if the appellant succeeds in his appeal, there could not be a return to the status quo. The most important factor that must weigh with any Court dealing with motion for stay of execution is the question whether the judgment creditors will be able to refund the judgment debt if the appeal succeeds (see *Baker v. Lavery (1885) 14 QB D 769*; *Brandford v. Young Re Falconer and Trusts (1884) 28 CH. D. 18* and *Wilson v. Church (No.21) (1870) 12 Ch. D. 454*). - [25] If the judgment is of a nature to be actively enforced by execution and its execution does not delay or impair the character of the appeal, a stay will ordinarily not be granted. Satisfaction of a money decree does not ordinarily pose the danger of rendering a pending appeal nugatory, where the respondent is not impecunious, as the remedy of restitution is available to the applicant in the event the appeal is allowed. The presumption then is that payment made to the respondent in execution of the decree will be reversible in the event of the applicant succeeding on appeal. If it is not reversible, it has not been shown that damages will not reasonably compensate the applicant, or that it is in the public interest to grant a stay. Normally there should not be *a stay* except where the decretal amount is deposited or security is given for the said amount. An exceptional case has to be made for *stay* of execution of a *money decree*. The affidavit evidence must show that there is real risk that the decretal sum ordered by the Court will not be refunded if the appeal succeeds. A stay will be granted where there is a risk that the respondent will be unable to repay the money without difficulty or delay if the appeal were to succeed.

- [26] The applicant has not shown that execution will affect the merits of the grounds and arguments proposed to be raised on appeal, and neither has it demonstrated a reasonable basis to support the belief that there is a real prospect that it will not be possible for the Court of Appeal by its orders to restore the status quo in the event that the applicant succeeds in its appeal. The Court of Appeal would ordinarily order the restoration of the *status quo ante* by directing the respondent to refund money recovered in execution of the decree. - [27] Instead, Counsel for the applicant submitted that in light of the substantial or colossal amount awarded by the decree sought to be executed, recovery of that sum will affect the operations of the applicant as a private University and possibly lead to its closure. Where there is a real prospect that execution of the decree will to a crippling extent deprive the appellant of the resources, financial or otherwise, necessary to sustain the appeal, the Court may be persuaded to grant a stay of execution pending the appeal. A judgment debtor though cannot obtain a stay of execution by arguing only that he or she would be ruined financially (see *Linotype-Hell Finance Ltd. v. Baker [1993] 1 WLR 321; [1992] 4 All ER 887*). - [28] Courts are more likely to grant a stay of execution when there is a strong possibility that the execution of the decree will render the appellant unable to afford the costs of the appeal, or otherwise cripple their ability to pursue their case, thereby paralysing the exercise of their right of appeal. To arrive at this conclusion, the applicant ought to furnish cogent evidence of its current means and demonstrate how execution is likely to cause a debilitating effect in light of its capacity to purse the appeal. The Court has not lost sight of the fact that the applicant is a private university. Although the decretal sum is a significant amount and there is no doubt it has the potential of affecting the normal operations of the applicant if drawn at a go, I am not satisfied that it's recovery will cripple the applicant's ability to pursue its appeal, thereby paralysing the exercise of its right of appeal. All in all, the applicant has not established a reasonable basis for sustaining the belief that there is a real prospect that the appeal may be rendered nugatory.

- v. There is serious or imminent threat of execution of the decree or order and if the application is not granted. - [29] Imminent threat means a condition that is reasonably certain to place the applicant's interests in direct peril and is immediate and impending and not merely remote, uncertain, or contingent. An order of stay will issue only if there is actual or presently threatened execution. There must be a direct and immediate danger of execution of the decree. There should be unequivocal evidence showing that unconditional steps as to convey a gravity of purpose and imminent prospect of execution of the decree, have been taken by the respondent. Steps that demonstrate a serious expression of an intent include; extracting the decree, presenting and having a bill of costs taxed, applying for issuance of a warrant of execution and issuing a notice to show cause why execution should not issue. The applicant has not adduced evidence of this in the application. The applicant has accordingly not proved that a step has been taken towards execution of the decree and execution is imminent unless stayed by this Court.

# vi. Substantial loss may result to the applicant unless the stay of execution is granted.

[30] Substantial loss does not represent any particular size or amount but refers to any loss, great or small that is of real worth or value as distinguished from a loss that is merely nominal (see *Tropical Commodities Supplies Ltd and Others v. International Credit Bank Ltd (in Liquidation) [2004] 2 EA 331*). "Substantial" though cannot mean the ordinary loss to which every judgment debtor is necessarily subjected when he or she loses his or her case and is deprived of his or her property in consequence. The applicant must establish other factors which show that the execution will create a state of affairs that will irreparably affect or negate the very essential core of the applicant as the successful party in the appeal. The loss ought to be of a nature which cannot be undone once inflicted.

[31] The court has to balance the interest of the applicant who is seeking to preserve the status quo pending the hearing of the appeal so that his or her appeal is not rendered nugatory and the interest of the respondent who is seeking to enjoy the fruits of his or her judgment (see *Alice Wambui Nganga v. John Ngure Kahoro and another, ELC Case No. 482 of 2017 (at Thika); [2021] eKLR*). For that reason, execution of a money decree is ordinarily not stayed since satisfaction of a money decree does not amount to substantial loss or irreparable injury to the applicant, where the respondent is not impecunious, as the remedy of restitution is available to the applicant in the event the appeal is allowed. The applicant has not on basis of the material submitted in this application established a reasonable basis to believe execution of the decree may have an irreversible effect.

#### vii. The applicant has given security for due performance of the decree or order.

- [32] In granting an order of stay of execution pending an appeal, the court has to balance the need to uphold the respondent's right to be protected from the risk that the appellant may not be able to satisfy the decree, with the appellant's right to access the courts. It is the reason that courts have been reluctant to order security for due performance of the decree. This requirement has been interpreted as not operating as an absolute clog on the discretion of the Court to direct the deposit of some amount as a condition for grant of stay of execution of the decree in appropriate cases, more particularly when such direction is coupled with the liberty to the decree holder to withdraw a portion thereof in part satisfaction of the decree without prejudice and subject to the result of the appeal. - [33] Courts have instead been keen to order security for Costs (see *Tropical Commodities Supplies Ltd and others v. International Credit Bank Ltd (in liquidation) [2004] 2 EA 331* and *DFCU Bank Ltd v. Dr. Ann Persis Nakate Lussejere, C. A Civil Appeal No. 29 of 2003*), because the requirement and insistence on a practice that mandates security for the entire decretal amount is likely to stifle appeals. The purpose of an order for security for costs on an appeal

is to ensure that a respondent is protected for costs incurred for responding to the appeal and defending the proceeding, which therefore implies such an order does not adequately meet entirely the purpose of security for due performance of the decree. In the case of a money decree, furnishing security for due performance of the decree denotes providing depositing the disputed amount.

[34] Where the applicant is ready to deposit security for due performance, it would be ideal to the Court to order the decretal sum to be deposited into an interest yielding account, secured by a bank guarantee in favour of the Registrar of this Court for delivery to whoever succeeds on appeal. This is usually the case where there is apprehension as to the ability of the applicant to secure a refund of the judgment debt from the respondent after the appeal. The practice of the court is to exercise its discretion in granting a conditional stay where it is in doubt on most of the key considerations. There Court having already decided that the applicant has failed to establish most of the essential considerations, it would not be futile to take this factor into account.

### viii. Refusal to grant the stay would inflict more hardship than it would avoid.

[35] The Court has the duty to balance or weigh the scales of justice by ensuring that an appeal is not rendered nugatory while at the same time ensuring that a successful party is not impeded from the enjoyment of the fruits of his or her judgement. In doing so, the Court endeavours to ascertain where the greatest risk of irremediable harm might lie and to make an order which is less likely to produce injustice. No doubt it would be wrong to order a stay of proceedings pending appeal where the appeal is frivolous or where such order would inflict greater hardship than it would avoid (see *Erinford Propertied Ltd. v. Cheshire County Council [1974] 412 All ER 448*). It is also a fundamental factor to bear in mind that, a successful party is *prima facie* entitled to the fruits of his or her judgement.

- [36] Save for the argument that its over 30,000 students would be inconvenienced if the university were to close under the weight of the respondent's recovery efforts, the applicant has not offered evidence of objective facts from which it can be deduced that in the circumstances of this case, execution will cause significant difficulty, expense or disruption, beyond that to which every judgment debtor is necessarily subjected when he or she loses his or her case and is deprived of his or her property in consequence. I am therefore not satisfied that execution would cause significant difficulty, expense and disruption, beyond that to which every judgment debtor is necessarily subjected. - [37] On the other hand, the arbitral proceedings revealed that the applicant stopped servicing the loan sometime during the year 2016. More so, there is no evidence to show that over five years since the award was handed down, the applicant has made any effort to repay the sum borrowed, yet it does not deny having borrowed from the principal sum. In the circumstances, if an order of stay is granted, it is likely to inflict greater hardship as it would disproportionately harm the respondent who would as a result be unfairly deprived of its right to benefit from the fruits of an Arbitral Award delivered in its favour. - [38] In conclusion, the applicant has failed to satisfy the majority of the essential requirements for the grant of an order of stay of execution pending appeal. Consequently, the application fails and it is hereby dismissed with costs to the respondent.

Delivered electronically this 4th day of April, 2025 …Stephen Mubiru……..

Stephen Mubiru Judge, 4th April, 2025

## Appearances;

- For the applicant : M/s Byenkya Kihika & Co. Advocates appearing jointly with M/s Nambale Nerima & Co. Advocates & Legal Consultants and M/s Magna Advocates. - For the respondent : M/s ASTRAL Advocates.