This ruling is in respect of the 2nd Defendant’s Notice of Motion application dated 28th May, 2024 which sought the following orders;
a. Spent
b. Spent
c. That this Honourable Court be pleased to grant extension of interim orders of stay of execution of judgement delivered on 30th April, 2024 and all consequential orders and decree pending determination of the appeal filed in the Court of Appeal.
d. That the costs of this application be provided for.
The grounds on the face of the application are that judgement was delivered on 30th April, 2024 against the Defendants. The 2nd Defendant being aggrieved by the said judgement, filed an appeal. The Court granted interim stay of execution orders that lapsed on 30th May, 2024 which the Plaintiff may proceed to extract and execute the decree at any time. The 2nd Defendant states that if the interim orders are not extended, it will suffer substantial loss as it may not be able to recover the loan it had issued the 1st Defendant.
The 2nd Defendant further states that it is also likely to suffer irreparable loss and damage which will render the appeal nugatory. That the appeal is arguable and has a reasonable chance of success and that there has not been any delay in bringing the application. The 2nd Defendant states that it is willing to abide by any conditions and terms as to security as the Court may deem fit to impose.
The application is supported by the affidavit of Moses Anyangu sworn on 28th May, 2024. He reiterated the grounds on the face of the application and stated that unless stay of execution orders are granted, it will not be able to recover the loan of Kshs. 2,000,000/= that it had advanced the 1st Defendant. He also deposed that the 1st Defendant would not be able to pay the 2nd Defendant damages in the event the appeal succeeds. That it is in the interest of justice that stay of execution be granted.
In response, the Plaintiff filed grounds of opposition dated 3rd June, 2024 on the following grounds:
a. That the application is misconceived and bad in law.
b. That the application is incompetent and embarrassing.
c. That the application is an abuse of the process of the Court.
d. That the application is without merit.
Submissions
Neither of the parties filed submissions to the application.
Analysis and determination
The Court has considered the application and the main issue for determination is whether orders of stay of execution pending appeal should be issued.
Order 42 Rule 6 (1)(2) of the Civil Procedure Rules provides as follows;
“(2) 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.
In RWW V EKW [2019] eKLR the court held as follows:
“...the purpose of an application for stay of execution pending an appeal is to preserve the subject matter in dispute so that the rights of the appellant who is exercising the undoubted right of appeal are safeguarded and the appeal if successful, is not rendered nugatory. However, in doing so, the court should weigh this right against the success of a litigant who should not be deprived of the fruits of his/her judgment. The court is also called upon to ensure that no party suffers prejudice that cannot be compensated by an award of costs.”
For this court to grant an order of stay of execution, the 2nd Defendant must demonstrate that it filed the application under consideration without unreasonable delay, that it will suffer substantial loss if the orders sought are not granted and that it is willing to deposit security for costs.
On whether the application was filed without unreasonable delay, a perusal of the court record showed that judgement in the matter was delivered on 30th April, 2024 on which date the Court issued stay of execution orders for a period of thirty days. The present application was filed on 30th May, 2024 which application has in my view been filed without unreasonable delay.
The 2nd Defendant has to demonstrate that unless the court grants stay of execution orders pending appeal, it stands to suffer substantial loss. The 2nd Defendant argues that it had advanced a loan of Kshs. 2,000,000/= to the 1st Defendant and that unless orders of stay of execution are granted, it will suffer substantial loss as it may not recover the loan advanced.
In the case of Elishaphan Omollo Nyasita v Gradus Atieno Othim & another [2019] eKLR the court held as follows;
“11. It is trite law that it is not merely sufficient for the applicant to state that he or rather she is likely to suffer substantial loss if the application for stay of execution sought is not allowed. The applicant has not shown the damage or loss that he is likely to suffer if the order sought in the application is not granted. Moreover, to grant the order aforesaid would deny a successful litigant (respondent) the fruits of his Judgment as held in Kenya Shell Ltd case.”
It is my finding that the alleged likelihood of the failure of the 1st Defendant to repay the said loan does not amount to substantial loss and therefore the 2nd Defendant has failed to prove the 2nd limb for grant of orders of stay of execution.
On the issue of security of costs, the 2nd Defendant has stated that it is ready to abide by the terms and conditions that the court shall be inclined to impose.
In the upshot, this court shall exercise its discretion and order of stay of execution of the judgement delivered on 30th April, 2024 on the following conditions;
a. The 2nd Defendant to deposit a sum of Kshs. 250,000/= as security for costs in a fixed joint interest earning account in the names of both counsel for the parties within 14 days from the date of this ruling.
b. The 2nd Defendant shall compile, file and serve a record of appeal within 60 days and move the Court appropriately towards the finalization of this Appeal within 180 days from the date of this ruling.
In the event the 2nd Defendant fails to abide by any of the above stated two conditions within the fixed time lines there will be an automatic lapse of the stay of execution herein irrespective of whether or not one condition shall have been met earlier than the failure of the latter. It is so ordered.
RULING DATED, SIGNED AND DELIVERED ELECTRONICALLY THIS 26TH DAY OF SEPTEMBER 2024.
a. Spent
b. Spent
c. That this Honourable Court be pleased to grant extension of interim orders of stay of execution of judgement delivered on 30th April, 2024 and all consequential orders and decree pending determination of the appeal filed in the Court of Appeal.
d. That the costs of this application be provided for.
The grounds on the face of the application are that judgement was delivered on 30th April, 2024 against the Defendants. The 2nd Defendant being aggrieved by the said judgement, filed an appeal. The Court granted interim stay of execution orders that lapsed on 30th May, 2024 which the Plaintiff may proceed to extract and execute the decree at any time. The 2nd Defendant states that if the interim orders are not extended, it will suffer substantial loss as it may not be able to recover the loan it had issued the 1st Defendant.
The 2nd Defendant further states that it is also likely to suffer irreparable loss and damage which will render the appeal nugatory. That the appeal is arguable and has a reasonable chance of success and that there has not been any delay in bringing the application. The 2nd Defendant states that it is willing to abide by any conditions and terms as to security as the Court may deem fit to impose.
The application is supported by the affidavit of Moses Anyangu sworn on 28th May, 2024. He reiterated the grounds on the face of the application and stated that unless stay of execution orders are granted, it will not be able to recover the loan of Kshs. 2,000,000/= that it had advanced the 1st Defendant. He also deposed that the 1st Defendant would not be able to pay the 2nd Defendant damages in the event the appeal succeeds. That it is in the interest of justice that stay of execution be granted.
In response, the Plaintiff filed grounds of opposition dated 3rd June, 2024 on the following grounds:
a. That the application is misconceived and bad in law.
b. That the application is incompetent and embarrassing.
c. That the application is an abuse of the process of the Court.
d. That the application is without merit.
Submissions
Neither of the parties filed submissions to the application.
Analysis and determination
The Court has considered the application and the main issue for determination is whether orders of stay of execution pending appeal should be issued.
Order 42 Rule 6 (1)(2) of the Civil Procedure Rules provides as follows;
“(2) 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.
In RWW V EKW [2019] eKLR the court held as follows:
“...the purpose of an application for stay of execution pending an appeal is to preserve the subject matter in dispute so that the rights of the appellant who is exercising the undoubted right of appeal are safeguarded and the appeal if successful, is not rendered nugatory. However, in doing so, the court should weigh this right against the success of a litigant who should not be deprived of the fruits of his/her judgment. The court is also called upon to ensure that no party suffers prejudice that cannot be compensated by an award of costs.”
For this court to grant an order of stay of execution, the 2nd Defendant must demonstrate that it filed the application under consideration without unreasonable delay, that it will suffer substantial loss if the orders sought are not granted and that it is willing to deposit security for costs.
On whether the application was filed without unreasonable delay, a perusal of the court record showed that judgement in the matter was delivered on 30th April, 2024 on which date the Court issued stay of execution orders for a period of thirty days. The present application was filed on 30th May, 2024 which application has in my view been filed without unreasonable delay.
The 2nd Defendant has to demonstrate that unless the court grants stay of execution orders pending appeal, it stands to suffer substantial loss. The 2nd Defendant argues that it had advanced a loan of Kshs. 2,000,000/= to the 1st Defendant and that unless orders of stay of execution are granted, it will suffer substantial loss as it may not recover the loan advanced.
In the case of Elishaphan Omollo Nyasita v Gradus Atieno Othim & another [2019] eKLR the court held as follows;
“11. It is trite law that it is not merely sufficient for the applicant to state that he or rather she is likely to suffer substantial loss if the application for stay of execution sought is not allowed. The applicant has not shown the damage or loss that he is likely to suffer if the order sought in the application is not granted. Moreover, to grant the order aforesaid would deny a successful litigant (respondent) the fruits of his Judgment as held in Kenya Shell Ltd case.”
It is my finding that the alleged likelihood of the failure of the 1st Defendant to repay the said loan does not amount to substantial loss and therefore the 2nd Defendant has failed to prove the 2nd limb for grant of orders of stay of execution.
On the issue of security of costs, the 2nd Defendant has stated that it is ready to abide by the terms and conditions that the court shall be inclined to impose.
In the upshot, this court shall exercise its discretion and order of stay of execution of the judgement delivered on 30th April, 2024 on the following conditions;
a. The 2nd Defendant to deposit a sum of Kshs. 250,000/= as security for costs in a fixed joint interest earning account in the names of both counsel for the parties within 14 days from the date of this ruling.
b. The 2nd Defendant shall compile, file and serve a record of appeal within 60 days and move the Court appropriately towards the finalization of this Appeal within 180 days from the date of this ruling.
In the event the 2nd Defendant fails to abide by any of the above stated two conditions within the fixed time lines there will be an automatic lapse of the stay of execution herein irrespective of whether or not one condition shall have been met earlier than the failure of the latter. It is so ordered.
RULING DATED, SIGNED AND DELIVERED ELECTRONICALLY THIS 26TH DAY OF SEPTEMBER 2024.