A. THE NOTICE OF MOTION DATED 8TH JUNE, 2026.
1. The Appellants’ notice of motion dated 8th June, 2026 is expressed to be brought under Order 12 Rule 7 and Order 22 Rule 22 of the Civil Procedure Rules, Section 1A, 3 and 3A of the Civil Procedure Act and all other enabling provisions of the law and seeks the following orders:
a. [Spent].
b. [Spent].
c. [Spent].
d. THAT the court be pleased grant the Appellants an order of stay of execution and enforcement of the entire ruling delivered in Kisumu CMCC No E664 of 2026 pending the determination of this appeal.
e. THAT the court be pleased to issue an order of stay of further proceedings in Kisumu CMCC NO E664 of 2026 pending the hearing and determination of this appeal.
f. THAT costs of this application be provided for.
2. The grounds upon which the motion is premised are that the Appellants are aggrieved by the ruling and directions issued by Hon. C. A. Olando on 8th June, 2026 in Kisumu CMCC No. E664 of 2026 and have preferred an appeal before this Court, seeking a reconsideration of the issues determined by the trial court.
3. The Appellants state that upon delivery of the impugned ruling, the trial court granted a 14-day stay of execution to enable them to pursue an appeal. They that they acted without delay and lodged the present appeal within the period granted by the trial court.
4. The Appellants contend that the Respondent had not met the requisite threshold for the grant of the equitable relief of injunction in respect of motor vehicle registration number KDW 331 D. They further argue that the trial court failed to consider the response and submissions filed on their behalf and invite this Court, in the exercise of its appellate jurisdiction, to re-consider the same.
5. The 1st Appellant further takes issue with the manner in which the trial court rendered its ruling, describing it as a blanket determination which allowed the Respondent’s application without sufficiently specifying or addressing the particular orders sought and granted. It considers the decision to have been grave and prejudicial to its interests.
6. The Appellants apprehend that unless the orders sought are granted, the Respondent may be placed in a position to interfere with the subject motor vehicle, thereby occasioning the 1st Appellant substantial prejudice and potentially rendering the appeal nugatory by leaving the 1st Appellant with nothing to preserve pending its determination.
7. It is further contended that staying the proceedings before the trial court would serve the interests of judicial economy by preventing the court from proceeding with matters which, according to the Appellants, are founded upon an erroneous or unlawful determination that is presently under challenge before this Court.
8. The Appellants maintain that the Respondent would suffer no prejudice if the orders sought are granted, particularly because the Respondent has admitted to being in breach of the terms of the Hire Purchase agreement. Conversely, the 1st Appellant contends that it stands to suffer substantial loss and prejudice if the orders sought are declined.
9. Ultimately, the Appellants urge the Court to exercise its discretion in their favour, in the interests of justice and fairness, and to allow the underlying claim to be heard and determined on its merits.
B. THE SUPPORTING AFFIDAVIT.
10. The application is supported by the affidavit of Fedelis Kyalo Mutisya sworn on 8th June, 2026 in which he deposes that he is a Director of the 1st Appellant, and is therefore conversant with the facts giving rise to the application and competent to swear the affidavit.
11. He deposes that the Respondent instituted proceedings before the trial court by a plaint and application dated 30th April, 2026, seeking injunctive relief in respect of motor vehicle registration number KDW 331D, which the Appellants had repossessed following the Respondent’s breach of the terms of the hire purchase agreement. He has annexed copies of the plaint and application as FKM 1.
12. The deponent states that upon being served with the application, the Appellants instructed their advocates, who prepared and filed a response thereto. A copy of the said response is annexed and marked FKM 2. He further deposes that the proceedings before the trial court did not result in the issuance of any interim injunctive orders, but the parties were directed to file submissions on the application. The respective submissions are annexed as FKM 3(a) and FKM 3(b).
13. He states that on 8th June, 2026, the trial court delivered its ruling on the Respondent’s application, a copy of which is annexed and marked FKM 4. Being dissatisfied with the decision, the Appellants lodged the instant appeal challenging the entirety of the trial court’s findings, as evidenced by the memorandum of appeal annexed and marked FKM 5.
14. The deponent further deposes that the trial court granted a 14-day stay of execution and enforcement of its ruling of 8th June, 2026, thereby necessitating the present application. The Appellants’ principal grievance is that notwithstanding the Respondent’s alleged admission, on oath, that she had defaulted in making payments under the hire purchase agreement, the trial court nevertheless made a determination in her favour.
15. He states that the Appellants placed before the trial court evidence of several breaches by the Respondent, including failure to make the agreed payments, interference with the vehicle’s tracking device and driving the subject vehicle while it was under an expired insurance cover. He contends that despite the gravity of those matters, the trial court failed to consider them in arriving at its decision.
16. On the other hand, he deposes that the Respondent did not provide documentary evidence demonstrating compliance with the payment obligations under the hire purchase agreement. According to him, the only documents relied upon by the Respondent were a WhatsApp extract and a vehicle delivery sheet issued to the Appellants’ auctioneer, which, in his view, did not establish compliance with the contractual payment obligations.
17. He further takes issue with the trial court’s ruling, which he characterizes as a blanket determination that failed to address the Appellants’ response and submissions. He expresses apprehension that the Respondent may interpret the ruling as authorizing the release of the subject motor vehicle to her, notwithstanding that such relief was not sought in the pending proceedings.
18. The deponent contends that, on the advice of counsel, he believes the Respondent did not satisfy the applicable legal threshold for the grant of the orders issued by the trial court. He further states that, as a business entity, the 1st Appellant stands to suffer substantial loss if the vehicle is released to the Respondent, as she may continue to breach the terms of the hire purchase agreement while relying upon the trial court’s orders as justification for retaining possession of the vehicle.
19. He states that the hire purchase agreement was due to expire on 31st June, 2026, which he identifies as the final date for completion of the contractual arrangement, and maintains that the Respondent continued to breach its terms. A highlighted copy of the Agreement is annexed and marked FKM 6.
20. The deponent further asserts that since the institution of the suit, the Respondent had made no payments, whether substantial or otherwise, towards the sums due under the agreement, which, in his view, demonstrates her lack of intention to honour the payment obligations for as long as she remained in possession of the vehicle.
21. He further deposes that unless execution of the impugned ruling and proceedings before the trial court are stayed, there is a risk that the matter will proceed on the basis of what he considers an illegality, thereby occasioning the Appellants further loss and damage. He believes that the appeal will afford them an opportunity to ventilate issues which, according to him, were overlooked by the trial court.
22. The deponent states that the 1st Appellant is engaged in the business of importing and selling used motor vehicles and that it stands to suffer irreparable harm, prejudice and financial loss which cannot adequately be compensated by an award of damages, particularly given the Respondent’s failure to comply with the payment terms of the hire purchase agreement.
23. He maintains that the appeal has high chances of success and that the orders sought are necessary to preserve its substratum and prevent it from being rendered nugatory. He further deposes that the Respondent will suffer no prejudice if the application is allowed, whereas the Appellants stand to suffer substantial loss if they are denied an opportunity to have their grievance heard on appeal, and that it is therefore in the interests of justice and fairness that the application be allowed.
C. THE REPLYING AFFIDAVIT.
24. The application is opposed by the Respondent, who to that end filed a replying affidavit that she swore on 16th June, 2026 in which she deposes that the application is brought in bad faith, is devoid of merit and ought to be dismissed.
25. She further deposes that, according to the advice of her advocates, the Appellants have failed to satisfy the legal threshold for the grant of an order of stay pending appeal. In particular, she maintains that the Appellants have not demonstrated that they are likely to suffer substantial loss if execution of the trial court’s orders is not stayed, nor have they provided security for the due performance of any order that may ultimately be binding upon them.
26. The Respondent further contends that the Appellants will not suffer any prejudice that cannot adequately be compensated by an award of damages should this Court ultimately find, contrary to the trial court’s determination, that the impugned decision was erroneous.
27. On the other hand, the Respondent states that she continues to suffer prejudice as a result of the Appellants’ conduct. She maintains that she paid for the subject motor vehicle but that the same was subsequently repossessed by the Appellants illegally and unprocedurally. As a consequence, she states that she has been unable to use the vehicle and that her proprietary rights have thereby been infringed.
28. The Respondent concludes by deposing that the affidavit is made in good faith and that, in the interests of justice and fairness, the Appellants’ application ought to be disallowed.
D. THE APPELLANTS’ SUBMISSIONS.
29. In support of the application, the Appellants submit that they have moved the Court seeking stay of execution and enforcement of the ruling delivered on 8th June, 2026 in Kisumu CMCC No. E664 of 2026, as well as stay of further proceedings in the subordinate court pending the hearing and determination of the appeal.
30. On the background to the dispute, the Appellants submit that the Respondent entered into a hire purchase agreement in respect of motor vehicle registration number KDN 331D, Subaru Forester, on 13th December, 2026, the terms of which are contained in the agreement annexed as FMK 6.
31. They contend that the Respondent breached the terms of the agreement, particularly her payment obligations, thereby entitling the Appellants to repossess the subject vehicle.
32. The Respondent thereafter instituted proceedings before the trial court on 30th April, 2026, seeking, inter alia, an order for release of the vehicle pending determination of her application and an injunction restraining the Appellants from attaching, repossessing, disposing of or selling the vehicle.
33. The Appellants submit that the Respondent did not satisfy the conditions for the grant of the injunctive relief sought before the trial court. In particular, they point to the Respondent’s own averment in her supporting affidavit that she was experiencing financial difficulties, which, according to the Appellants, amounted to an admission of breach of the hire purchase agreement and a request for restructuring of the contractual arrangement.
34. On the requirement of filing the application without unreasonable delay, the Appellants submit that they satisfied this condition. They state that the trial court delivered its ruling on 8th June, 2026 and that they filed the present application and the memorandum of appeal on the same day.
35. They further point out that the matter was placed before this Court for directions within one day of delivery of the impugned ruling and therefore no delay can properly be attributed to them.
36. On substantial loss, the Appellants submit that they have demonstrated the prejudice and loss they are likely to suffer unless the orders sought are granted. They contend that the 1st Appellant is engaged in the business of importing and selling motor vehicles and that the hire purchase agreement was due to come to an end on 31st June, 2026, by which date the Respondent ought to have completed her payment obligations.
37. The Appellants identify several matters which, they submit, demonstrate the likelihood of substantial loss. They contend that, prior to repossession, the Respondent interfered with the vehicle’s tracking device in an attempt to prevent its repossession; that the vehicle was uninsured when repossessed, its last insurance cover having expired on 29th January, 2026, as evidenced; that the Respondent was in arrears of Ksh.1,830,000/-; and that there was no subsisting contractual relationship between the parties after the alleged completion date of 31st June, 2026.
38. They further contend that the Respondent had made no payments or demonstrated any goodwill since instituting the primary suit and had not shown willingness to comply with the terms of the hire purchase agreement.
39. The Appellants submit that release of the vehicle to the Respondent would expose the 1st Appellant to the risk of loss of the vehicle, including through accident, theft or other damage, particularly in view of the alleged absence of insurance cover.
40. They further apprehend that the Respondent may move the vehicle beyond their reach, interfere with its tracking system, subject it to wear and tear while payment obligations remain outstanding, and continue defaulting in her contractual obligations.
41. They maintain that these averments were not controverted by the Respondent through a further affidavit or documentary evidence and that the Respondent did not annex proof of payment to demonstrate compliance with the hire purchase agreement.
42. In support of their submission on substantial loss, the Appellants rely on Kalume v Mnjala & 6 Others (Civil Appeal E164 of 2025) [2026], in which the Court reiterated, with reference to Kenya Shell Limited v Benjamin Karuga Kibiru & Another (1986) KECA 94 (KLR), that substantial loss is the cornerstone of an application for stay.
43. The Appellants rely on the holding in Kenya Shell that, absent evidence of substantial loss, it would be difficult to demonstrate that an appeal would be rendered nugatory, and that substantial loss is the principal consideration underlying the jurisdiction to grant a stay.
44. The Appellants submit that the Respondent’s replying affidavit does not adequately answer the matters raised in support of the application. They contend that the Respondent did not specifically respond to the alleged breaches, arrears, interference with the tracker, lack of insurance or other matters relied upon by the Appellants, nor did she annex tangible documentary evidence to rebut those allegations.
45. They therefore maintain that they stand to suffer substantial loss if the Respondent is allowed to retain or regain possession of the subject vehicle while continuing to default under the hire purchase agreement.
46. With regard to the prayer for stay of proceedings, the Appellants rely on Waithaka v Tribunal appointed to investigate the conduct of the Honourable Lady Justice Lucy Njoki Waithaka & another; Kenya Magistrates & Judges Association (Interested Party) (Civil Application 8 of 2020) [2020] KECA 571 (KLR). In that case, the Court, while considering the principles applicable to stay of proceedings and stated that the decision whether to grant stay of proceedings is an exercise of judicial discretion in the interests of justice.
47. The Court emphasized that the essential question is whether, in the circumstances, it is in the interests of justice to stay the proceedings and that the Court should weigh the advantages and disadvantages of granting or refusing the order.
48. Applying that principle, the Appellants submit that stay of the proceedings before the trial court would enable this Court to determine the issues raised in the appeal, including the evidence and material which they contend was overlooked by the trial court when determining the Respondent’s application.
49. They argue that it would serve no useful purpose, and would be prejudicial to them, to allow the primary proceedings to continue while the legality and correctness of the impugned decision are under challenge before this Court.
50. On the prospects of the appeal, the Appellants submit that their memorandum of appeal, the response filed before the trial court, the annexures contained in their bundle and the material placed before this Court demonstrate arguable grounds upon which they should be afforded an opportunity to challenge the impugned decision.
51. They identify the principal issues they intend to establish on appeal as the Respondent’s breach of the hire purchase agreement, the substantial loss they stand to suffer if the appeal is not preserved, and the contention that the Respondent was not entitled to the orders granted by the trial court.
52. The Appellants conclude that they have satisfied the requirements for the grant of stay, particularly because there was no delay in filing the appeal or the present application and because they have demonstrated the loss and prejudice likely to result if the orders sought are declined. They urge that the Court should exercise its discretion on stay of proceedings by considering the interests of justice and the circumstances of the case.
53. The Appellants accordingly urge the Court to allow the application and grant stay of execution of the ruling delivered on 8th June, 2026 in Kisumu CMCC No. E664 of 2026 pending determination of the appeal, stay further proceedings in the subordinate court pending the appeal, and direct that the appeal be fixed for directions or appropriate case administration.
E. THE RESPONDENT’S SUBMISSIONS.
54. In opposition to the application, the Respondent submits that the motion is devoid of merit and does not satisfy the legal threshold for the grant of stay of execution pending appeal. She identifies the principal issue for determination as whether the application is competent and capable of warranting the orders sought, together with the question of costs.
55. The Respondent relies on Order 42 Rule 6(2) of the Civil Procedure Rules, which provides that an order for stay of execution should not be made unless the Court is satisfied that substantial loss may result to the applicant unless the order is made, that the application has been made without unreasonable delay and that such security as the Court orders for the due performance of the decree or order ultimately binding upon the applicant has been given.
56. On substantial loss, the Respondent submits that the Appellants have failed to demonstrate that they are likely to suffer such loss if stay is not granted. She relies on Wangalwa & Another v Cheseto (Miscellaneous Application No. 42 of 2011) [2012] KEHC 1094 (KLR), where the Court held that the mere fact that execution has been commenced or is likely to be commenced does not, of itself, amount to substantial loss.
57. The Court further held that even where execution has been completed, an applicant must establish other circumstances demonstrating that execution would create a state of affairs that would irreparably affect or negate the essential core of the applicant’s position as the successful party in the appeal.
58. The Respondent submits that the 1st Appellant has merely asserted that it is engaged in the importation and sale of used motor vehicles and that it will suffer irreparable harm, prejudice and financial loss. She challenges that assertion on the basis that the subject motor vehicle had already been sold to her and that the Appellants thereafter repossessed it on what she describes as unfounded allegations of unpaid arrears.
59. She argues that, should this Court ultimately find in favour of the Appellants, an appropriate remedy could include an order for specific performance requiring her to pay any outstanding balance.
60. The Respondent further submits that the prejudice in the matter has already been suffered by her. She states that she is unable to use the subject vehicle for the purposes for which she purchased it and has consequently been compelled to hire or rent alternative vehicles, which she describes as an expensive undertaking.
61. She therefore urges the Court to consider the prejudice that would be occasioned to her if stay were granted, rather than merely the allegations of loss advanced by the Appellants.
62. In support of the requirement that substantial loss must be demonstrated rather than merely alleged, the Respondent relies on Medula Academy v Jacklyne Atieno Otieno & Another [2018] KEHC 1001 (KLR), which cited with approval Daniel Cheptulu Rotich & 2 Others v Emirates Airline, Civil Case No. 368 of 2001.
63. The Respondent relies on the proposition that it is not sufficient for an applicant merely to state that it is likely to suffer substantial loss. Rather, the applicant must demonstrate how such loss is likely to occur. She further relies on the observation that substantial loss is a relative concept to be assessed from the totality of the consequences likely to be suffered if stay is refused.
64. The Respondent consequently submits that the Appellants’ alleged loss is capable of being compensated by damages and, where appropriate, an order for specific performance.
65. She contends that granting stay would instead deprive her of the benefit of the ruling already entered in her favour and subject her to continued expenditure on car hire. She therefore urges the Court to find that the Appellants have failed to demonstrate the requisite substantial loss.
66. On costs, the Respondent submits that the general principle is that costs follow the event, with the successful party ordinarily being entitled to costs unless there are sufficient reasons for the Court to depart from that rule.
67. She relies on Section 27(1) of the Civil Procedure Act, which vests the Court with discretion over the costs of suits and provides, subject to the prescribed conditions and limitations, that costs ordinarily follow the event unless the Court, for good reason, otherwise orders.
68. The Respondent therefore urges the Court to find that the Appellants have not satisfied the requirements for the grant of stay and to dismiss the application, with costs.
F. ISSUES FOR DETERMINATION.
69. Having considered the motion, the affidavits filed in support of and in opposition to the application, the submissions by the respective parties and the authorities cited, having also considered the record of the proceedings before the trial court to the extent necessary for determining the present interlocutory application, I am of the view that the following issues arise for determination:
1. Whether the Appellants have satisfied the requirements for the grant of an order of stay of execution and enforcement of the ruling delivered on 8th June, 2026 in Kisumu CMCC No. E664 of 2026 pending the hearing and determination of the appeal.
2. Whether the Appellants have established sufficient grounds for the grant of an order staying further proceedings in Kisumu CMCC No. E664 of 2026 pending the hearing and determination of the appeal.
3. What orders should issue on the application, including the question of costs.
G. ANALYSIS AND FINDINGS.
70. The application seeks two principal forms of relief: stay of execution and enforcement of the ruling delivered on 8th June, 2026, and stay of further proceedings in Kisumu CMCC No. E664 of 2026 pending the hearing and determination of the appeal.
71. The starting point is Order 42 Rule 6(1) of the Civil Procedure Rules, which provides that an appeal does not, by itself, operate as a stay of execution or proceedings under the decree or order appealed from. The appellate court is, however, empowered, upon application, to grant such stay as may appear just.
72. Under Order 42 Rule 6(2), an applicant seeking stay of execution is required to demonstrate that substantial loss may result unless stay is granted, that the application has been made without unreasonable delay and that such security as the Court orders for the due performance of the decree or order ultimately binding upon the applicant has been given.
73. The jurisdiction is discretionary, but it is a judicial discretion which must be exercised upon settled principles and with the object of ensuring that an appeal, if successful, is not rendered nugatory. The Court must therefore balance the competing interests of the successful party in enjoying the fruits of the impugned order and those of the appellant in preserving the subject matter and efficacy of the appeal. The three requirements under Order 42 Rule 6(2) are not to be considered in isolation but in the context of the circumstances of each case.
74. The first issue I will then address is whether the Appellants have satisfied the requirements for stay of execution and enforcement.
75. The first consideration is whether the application was brought without unreasonable delay. On this issue, there is little controversy. The impugned ruling was delivered on 8th June, 2026. The present application was filed on the same date, and the memorandum of appeal was likewise lodged promptly.
76. The trial court had itself granted a 14-day stay to enable the Appellants to pursue an appeal. I am therefore satisfied that the application was made with considerable promptitude and without unreasonable delay.
77. The next and more substantial question is whether the Appellants have demonstrated that they are likely to suffer substantial loss if stay is declined. The authorities relied upon by the parties correctly recognize that substantial loss is the central consideration in an application of this nature.
78. In Kenya Shell Limited v Benjamin Karuga Kibiru & Another (1986) KECA 94 (KLR), the Court of Appeal emphasized that in the absence of evidence of substantial loss, it would be difficult to demonstrate that an appeal would otherwise be rendered nugatory.
79. The same principle has been reiterated in subsequent decisions, including James Wangalwa & Another v Agnes Naliaka Cheseto [2012] eKLR, where the Court explained that the mere commencement or likelihood of execution does not, by itself, constitute substantial loss. The applicant must demonstrate circumstances which would irreparably affect or negate the essential core of the appeal.
80. The Respondent is therefore correct in submitting that substantial loss cannot be established merely by making a bare assertion that loss will occur. The applicant must place before the Court sufficient material from which the nature and likelihood of the alleged loss can reasonably be discerned.
81. That, however, does not mean that substantial loss must necessarily take the form of an immediately quantifiable monetary loss. The Court must consider the subject matter of the dispute and the consequences that may follow if the impugned order is implemented before the appeal is heard.
82. In the present case, the dispute concerns possession of a specific motor vehicle, namely motor vehicle registration number KDW 331D. The 1st Appellant asserts that the vehicle was repossessed pursuant to the alleged breach of the hire purchase agreement by the Respondent. The Respondent, on the other hand, asserts that she had paid for the vehicle and that its repossession was illegal and unprocedural.
83. These are contested matters which ultimately fall to be determined in the substantive proceedings and, to the extent challenged, in the appeal.
84. The Appellants have, however, identified particular circumstances which distinguish this case from one where substantial loss is merely alleged. They contend that the Respondent had fallen into arrears of Ksh.1,830,000/-, had interfered with the vehicle’s tracking device, and had used the vehicle when its insurance cover had expired. They further contend that the contractual period was due to expire at the end of June, 2026 and that no payments had been made since the institution of the suit.
85. Although these allegations are disputed in substance, they have not been specifically rebutted by documentary evidence in the replying affidavit.
86. More importantly, the consequence of implementing the impugned ruling is not simply the payment of money which can readily be recovered or compensated. The immediate consequence concerns possession and control of an identifiable chattel.
87. If the vehicle is released to the Respondent and is subsequently removed beyond the effective reach of the Appellants, damaged, disposed of, or otherwise materially altered before the appeal is heard, the appellate court may be confronted with a substantially different factual situation from that which existed when the appeal was lodged.
88. I therefore find that the Appellants have demonstrated a sufficient risk of substantial prejudice to justify preservation of the subject matter. I emphasize, however, that this finding does not amount to a determinatio
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1. The Appellants’ notice of motion dated 8th June, 2026 is expressed to be brought under Order 12 Rule 7 and Order 22 Rule 22 of the Civil Procedure Rules, Section 1A, 3 and 3A of the Civil Procedure Act and all other enabling provisions of the law and seeks the following orders:
a. [Spent].
b. [Spent].
c. [Spent].
d. THAT the court be pleased grant the Appellants an order of stay of execution and enforcement of the entire ruling delivered in Kisumu CMCC No E664 of 2026 pending the determination of this appeal.
e. THAT the court be pleased to issue an order of stay of further proceedings in Kisumu CMCC NO E664 of 2026 pending the hearing and determination of this appeal.
f. THAT costs of this application be provided for.
2. The grounds upon which the motion is premised are that the Appellants are aggrieved by the ruling and directions issued by Hon. C. A. Olando on 8th June, 2026 in Kisumu CMCC No. E664 of 2026 and have preferred an appeal before this Court, seeking a reconsideration of the issues determined by the trial court.
3. The Appellants state that upon delivery of the impugned ruling, the trial court granted a 14-day stay of execution to enable them to pursue an appeal. They that they acted without delay and lodged the present appeal within the period granted by the trial court.
4. The Appellants contend that the Respondent had not met the requisite threshold for the grant of the equitable relief of injunction in respect of motor vehicle registration number KDW 331 D. They further argue that the trial court failed to consider the response and submissions filed on their behalf and invite this Court, in the exercise of its appellate jurisdiction, to re-consider the same.
5. The 1st Appellant further takes issue with the manner in which the trial court rendered its ruling, describing it as a blanket determination which allowed the Respondent’s application without sufficiently specifying or addressing the particular orders sought and granted. It considers the decision to have been grave and prejudicial to its interests.
6. The Appellants apprehend that unless the orders sought are granted, the Respondent may be placed in a position to interfere with the subject motor vehicle, thereby occasioning the 1st Appellant substantial prejudice and potentially rendering the appeal nugatory by leaving the 1st Appellant with nothing to preserve pending its determination.
7. It is further contended that staying the proceedings before the trial court would serve the interests of judicial economy by preventing the court from proceeding with matters which, according to the Appellants, are founded upon an erroneous or unlawful determination that is presently under challenge before this Court.
8. The Appellants maintain that the Respondent would suffer no prejudice if the orders sought are granted, particularly because the Respondent has admitted to being in breach of the terms of the Hire Purchase agreement. Conversely, the 1st Appellant contends that it stands to suffer substantial loss and prejudice if the orders sought are declined.
9. Ultimately, the Appellants urge the Court to exercise its discretion in their favour, in the interests of justice and fairness, and to allow the underlying claim to be heard and determined on its merits.
B. THE SUPPORTING AFFIDAVIT.
10. The application is supported by the affidavit of Fedelis Kyalo Mutisya sworn on 8th June, 2026 in which he deposes that he is a Director of the 1st Appellant, and is therefore conversant with the facts giving rise to the application and competent to swear the affidavit.
11. He deposes that the Respondent instituted proceedings before the trial court by a plaint and application dated 30th April, 2026, seeking injunctive relief in respect of motor vehicle registration number KDW 331D, which the Appellants had repossessed following the Respondent’s breach of the terms of the hire purchase agreement. He has annexed copies of the plaint and application as FKM 1.
12. The deponent states that upon being served with the application, the Appellants instructed their advocates, who prepared and filed a response thereto. A copy of the said response is annexed and marked FKM 2. He further deposes that the proceedings before the trial court did not result in the issuance of any interim injunctive orders, but the parties were directed to file submissions on the application. The respective submissions are annexed as FKM 3(a) and FKM 3(b).
13. He states that on 8th June, 2026, the trial court delivered its ruling on the Respondent’s application, a copy of which is annexed and marked FKM 4. Being dissatisfied with the decision, the Appellants lodged the instant appeal challenging the entirety of the trial court’s findings, as evidenced by the memorandum of appeal annexed and marked FKM 5.
14. The deponent further deposes that the trial court granted a 14-day stay of execution and enforcement of its ruling of 8th June, 2026, thereby necessitating the present application. The Appellants’ principal grievance is that notwithstanding the Respondent’s alleged admission, on oath, that she had defaulted in making payments under the hire purchase agreement, the trial court nevertheless made a determination in her favour.
15. He states that the Appellants placed before the trial court evidence of several breaches by the Respondent, including failure to make the agreed payments, interference with the vehicle’s tracking device and driving the subject vehicle while it was under an expired insurance cover. He contends that despite the gravity of those matters, the trial court failed to consider them in arriving at its decision.
16. On the other hand, he deposes that the Respondent did not provide documentary evidence demonstrating compliance with the payment obligations under the hire purchase agreement. According to him, the only documents relied upon by the Respondent were a WhatsApp extract and a vehicle delivery sheet issued to the Appellants’ auctioneer, which, in his view, did not establish compliance with the contractual payment obligations.
17. He further takes issue with the trial court’s ruling, which he characterizes as a blanket determination that failed to address the Appellants’ response and submissions. He expresses apprehension that the Respondent may interpret the ruling as authorizing the release of the subject motor vehicle to her, notwithstanding that such relief was not sought in the pending proceedings.
18. The deponent contends that, on the advice of counsel, he believes the Respondent did not satisfy the applicable legal threshold for the grant of the orders issued by the trial court. He further states that, as a business entity, the 1st Appellant stands to suffer substantial loss if the vehicle is released to the Respondent, as she may continue to breach the terms of the hire purchase agreement while relying upon the trial court’s orders as justification for retaining possession of the vehicle.
19. He states that the hire purchase agreement was due to expire on 31st June, 2026, which he identifies as the final date for completion of the contractual arrangement, and maintains that the Respondent continued to breach its terms. A highlighted copy of the Agreement is annexed and marked FKM 6.
20. The deponent further asserts that since the institution of the suit, the Respondent had made no payments, whether substantial or otherwise, towards the sums due under the agreement, which, in his view, demonstrates her lack of intention to honour the payment obligations for as long as she remained in possession of the vehicle.
21. He further deposes that unless execution of the impugned ruling and proceedings before the trial court are stayed, there is a risk that the matter will proceed on the basis of what he considers an illegality, thereby occasioning the Appellants further loss and damage. He believes that the appeal will afford them an opportunity to ventilate issues which, according to him, were overlooked by the trial court.
22. The deponent states that the 1st Appellant is engaged in the business of importing and selling used motor vehicles and that it stands to suffer irreparable harm, prejudice and financial loss which cannot adequately be compensated by an award of damages, particularly given the Respondent’s failure to comply with the payment terms of the hire purchase agreement.
23. He maintains that the appeal has high chances of success and that the orders sought are necessary to preserve its substratum and prevent it from being rendered nugatory. He further deposes that the Respondent will suffer no prejudice if the application is allowed, whereas the Appellants stand to suffer substantial loss if they are denied an opportunity to have their grievance heard on appeal, and that it is therefore in the interests of justice and fairness that the application be allowed.
C. THE REPLYING AFFIDAVIT.
24. The application is opposed by the Respondent, who to that end filed a replying affidavit that she swore on 16th June, 2026 in which she deposes that the application is brought in bad faith, is devoid of merit and ought to be dismissed.
25. She further deposes that, according to the advice of her advocates, the Appellants have failed to satisfy the legal threshold for the grant of an order of stay pending appeal. In particular, she maintains that the Appellants have not demonstrated that they are likely to suffer substantial loss if execution of the trial court’s orders is not stayed, nor have they provided security for the due performance of any order that may ultimately be binding upon them.
26. The Respondent further contends that the Appellants will not suffer any prejudice that cannot adequately be compensated by an award of damages should this Court ultimately find, contrary to the trial court’s determination, that the impugned decision was erroneous.
27. On the other hand, the Respondent states that she continues to suffer prejudice as a result of the Appellants’ conduct. She maintains that she paid for the subject motor vehicle but that the same was subsequently repossessed by the Appellants illegally and unprocedurally. As a consequence, she states that she has been unable to use the vehicle and that her proprietary rights have thereby been infringed.
28. The Respondent concludes by deposing that the affidavit is made in good faith and that, in the interests of justice and fairness, the Appellants’ application ought to be disallowed.
D. THE APPELLANTS’ SUBMISSIONS.
29. In support of the application, the Appellants submit that they have moved the Court seeking stay of execution and enforcement of the ruling delivered on 8th June, 2026 in Kisumu CMCC No. E664 of 2026, as well as stay of further proceedings in the subordinate court pending the hearing and determination of the appeal.
30. On the background to the dispute, the Appellants submit that the Respondent entered into a hire purchase agreement in respect of motor vehicle registration number KDN 331D, Subaru Forester, on 13th December, 2026, the terms of which are contained in the agreement annexed as FMK 6.
31. They contend that the Respondent breached the terms of the agreement, particularly her payment obligations, thereby entitling the Appellants to repossess the subject vehicle.
32. The Respondent thereafter instituted proceedings before the trial court on 30th April, 2026, seeking, inter alia, an order for release of the vehicle pending determination of her application and an injunction restraining the Appellants from attaching, repossessing, disposing of or selling the vehicle.
33. The Appellants submit that the Respondent did not satisfy the conditions for the grant of the injunctive relief sought before the trial court. In particular, they point to the Respondent’s own averment in her supporting affidavit that she was experiencing financial difficulties, which, according to the Appellants, amounted to an admission of breach of the hire purchase agreement and a request for restructuring of the contractual arrangement.
34. On the requirement of filing the application without unreasonable delay, the Appellants submit that they satisfied this condition. They state that the trial court delivered its ruling on 8th June, 2026 and that they filed the present application and the memorandum of appeal on the same day.
35. They further point out that the matter was placed before this Court for directions within one day of delivery of the impugned ruling and therefore no delay can properly be attributed to them.
36. On substantial loss, the Appellants submit that they have demonstrated the prejudice and loss they are likely to suffer unless the orders sought are granted. They contend that the 1st Appellant is engaged in the business of importing and selling motor vehicles and that the hire purchase agreement was due to come to an end on 31st June, 2026, by which date the Respondent ought to have completed her payment obligations.
37. The Appellants identify several matters which, they submit, demonstrate the likelihood of substantial loss. They contend that, prior to repossession, the Respondent interfered with the vehicle’s tracking device in an attempt to prevent its repossession; that the vehicle was uninsured when repossessed, its last insurance cover having expired on 29th January, 2026, as evidenced; that the Respondent was in arrears of Ksh.1,830,000/-; and that there was no subsisting contractual relationship between the parties after the alleged completion date of 31st June, 2026.
38. They further contend that the Respondent had made no payments or demonstrated any goodwill since instituting the primary suit and had not shown willingness to comply with the terms of the hire purchase agreement.
39. The Appellants submit that release of the vehicle to the Respondent would expose the 1st Appellant to the risk of loss of the vehicle, including through accident, theft or other damage, particularly in view of the alleged absence of insurance cover.
40. They further apprehend that the Respondent may move the vehicle beyond their reach, interfere with its tracking system, subject it to wear and tear while payment obligations remain outstanding, and continue defaulting in her contractual obligations.
41. They maintain that these averments were not controverted by the Respondent through a further affidavit or documentary evidence and that the Respondent did not annex proof of payment to demonstrate compliance with the hire purchase agreement.
42. In support of their submission on substantial loss, the Appellants rely on Kalume v Mnjala & 6 Others (Civil Appeal E164 of 2025) [2026], in which the Court reiterated, with reference to Kenya Shell Limited v Benjamin Karuga Kibiru & Another (1986) KECA 94 (KLR), that substantial loss is the cornerstone of an application for stay.
43. The Appellants rely on the holding in Kenya Shell that, absent evidence of substantial loss, it would be difficult to demonstrate that an appeal would be rendered nugatory, and that substantial loss is the principal consideration underlying the jurisdiction to grant a stay.
44. The Appellants submit that the Respondent’s replying affidavit does not adequately answer the matters raised in support of the application. They contend that the Respondent did not specifically respond to the alleged breaches, arrears, interference with the tracker, lack of insurance or other matters relied upon by the Appellants, nor did she annex tangible documentary evidence to rebut those allegations.
45. They therefore maintain that they stand to suffer substantial loss if the Respondent is allowed to retain or regain possession of the subject vehicle while continuing to default under the hire purchase agreement.
46. With regard to the prayer for stay of proceedings, the Appellants rely on Waithaka v Tribunal appointed to investigate the conduct of the Honourable Lady Justice Lucy Njoki Waithaka & another; Kenya Magistrates & Judges Association (Interested Party) (Civil Application 8 of 2020) [2020] KECA 571 (KLR). In that case, the Court, while considering the principles applicable to stay of proceedings and stated that the decision whether to grant stay of proceedings is an exercise of judicial discretion in the interests of justice.
47. The Court emphasized that the essential question is whether, in the circumstances, it is in the interests of justice to stay the proceedings and that the Court should weigh the advantages and disadvantages of granting or refusing the order.
48. Applying that principle, the Appellants submit that stay of the proceedings before the trial court would enable this Court to determine the issues raised in the appeal, including the evidence and material which they contend was overlooked by the trial court when determining the Respondent’s application.
49. They argue that it would serve no useful purpose, and would be prejudicial to them, to allow the primary proceedings to continue while the legality and correctness of the impugned decision are under challenge before this Court.
50. On the prospects of the appeal, the Appellants submit that their memorandum of appeal, the response filed before the trial court, the annexures contained in their bundle and the material placed before this Court demonstrate arguable grounds upon which they should be afforded an opportunity to challenge the impugned decision.
51. They identify the principal issues they intend to establish on appeal as the Respondent’s breach of the hire purchase agreement, the substantial loss they stand to suffer if the appeal is not preserved, and the contention that the Respondent was not entitled to the orders granted by the trial court.
52. The Appellants conclude that they have satisfied the requirements for the grant of stay, particularly because there was no delay in filing the appeal or the present application and because they have demonstrated the loss and prejudice likely to result if the orders sought are declined. They urge that the Court should exercise its discretion on stay of proceedings by considering the interests of justice and the circumstances of the case.
53. The Appellants accordingly urge the Court to allow the application and grant stay of execution of the ruling delivered on 8th June, 2026 in Kisumu CMCC No. E664 of 2026 pending determination of the appeal, stay further proceedings in the subordinate court pending the appeal, and direct that the appeal be fixed for directions or appropriate case administration.
E. THE RESPONDENT’S SUBMISSIONS.
54. In opposition to the application, the Respondent submits that the motion is devoid of merit and does not satisfy the legal threshold for the grant of stay of execution pending appeal. She identifies the principal issue for determination as whether the application is competent and capable of warranting the orders sought, together with the question of costs.
55. The Respondent relies on Order 42 Rule 6(2) of the Civil Procedure Rules, which provides that an order for stay of execution should not be made unless the Court is satisfied that substantial loss may result to the applicant unless the order is made, that the application has been made without unreasonable delay and that such security as the Court orders for the due performance of the decree or order ultimately binding upon the applicant has been given.
56. On substantial loss, the Respondent submits that the Appellants have failed to demonstrate that they are likely to suffer such loss if stay is not granted. She relies on Wangalwa & Another v Cheseto (Miscellaneous Application No. 42 of 2011) [2012] KEHC 1094 (KLR), where the Court held that the mere fact that execution has been commenced or is likely to be commenced does not, of itself, amount to substantial loss.
57. The Court further held that even where execution has been completed, an applicant must establish other circumstances demonstrating that execution would create a state of affairs that would irreparably affect or negate the essential core of the applicant’s position as the successful party in the appeal.
58. The Respondent submits that the 1st Appellant has merely asserted that it is engaged in the importation and sale of used motor vehicles and that it will suffer irreparable harm, prejudice and financial loss. She challenges that assertion on the basis that the subject motor vehicle had already been sold to her and that the Appellants thereafter repossessed it on what she describes as unfounded allegations of unpaid arrears.
59. She argues that, should this Court ultimately find in favour of the Appellants, an appropriate remedy could include an order for specific performance requiring her to pay any outstanding balance.
60. The Respondent further submits that the prejudice in the matter has already been suffered by her. She states that she is unable to use the subject vehicle for the purposes for which she purchased it and has consequently been compelled to hire or rent alternative vehicles, which she describes as an expensive undertaking.
61. She therefore urges the Court to consider the prejudice that would be occasioned to her if stay were granted, rather than merely the allegations of loss advanced by the Appellants.
62. In support of the requirement that substantial loss must be demonstrated rather than merely alleged, the Respondent relies on Medula Academy v Jacklyne Atieno Otieno & Another [2018] KEHC 1001 (KLR), which cited with approval Daniel Cheptulu Rotich & 2 Others v Emirates Airline, Civil Case No. 368 of 2001.
63. The Respondent relies on the proposition that it is not sufficient for an applicant merely to state that it is likely to suffer substantial loss. Rather, the applicant must demonstrate how such loss is likely to occur. She further relies on the observation that substantial loss is a relative concept to be assessed from the totality of the consequences likely to be suffered if stay is refused.
64. The Respondent consequently submits that the Appellants’ alleged loss is capable of being compensated by damages and, where appropriate, an order for specific performance.
65. She contends that granting stay would instead deprive her of the benefit of the ruling already entered in her favour and subject her to continued expenditure on car hire. She therefore urges the Court to find that the Appellants have failed to demonstrate the requisite substantial loss.
66. On costs, the Respondent submits that the general principle is that costs follow the event, with the successful party ordinarily being entitled to costs unless there are sufficient reasons for the Court to depart from that rule.
67. She relies on Section 27(1) of the Civil Procedure Act, which vests the Court with discretion over the costs of suits and provides, subject to the prescribed conditions and limitations, that costs ordinarily follow the event unless the Court, for good reason, otherwise orders.
68. The Respondent therefore urges the Court to find that the Appellants have not satisfied the requirements for the grant of stay and to dismiss the application, with costs.
F. ISSUES FOR DETERMINATION.
69. Having considered the motion, the affidavits filed in support of and in opposition to the application, the submissions by the respective parties and the authorities cited, having also considered the record of the proceedings before the trial court to the extent necessary for determining the present interlocutory application, I am of the view that the following issues arise for determination:
1. Whether the Appellants have satisfied the requirements for the grant of an order of stay of execution and enforcement of the ruling delivered on 8th June, 2026 in Kisumu CMCC No. E664 of 2026 pending the hearing and determination of the appeal.
2. Whether the Appellants have established sufficient grounds for the grant of an order staying further proceedings in Kisumu CMCC No. E664 of 2026 pending the hearing and determination of the appeal.
3. What orders should issue on the application, including the question of costs.
G. ANALYSIS AND FINDINGS.
70. The application seeks two principal forms of relief: stay of execution and enforcement of the ruling delivered on 8th June, 2026, and stay of further proceedings in Kisumu CMCC No. E664 of 2026 pending the hearing and determination of the appeal.
71. The starting point is Order 42 Rule 6(1) of the Civil Procedure Rules, which provides that an appeal does not, by itself, operate as a stay of execution or proceedings under the decree or order appealed from. The appellate court is, however, empowered, upon application, to grant such stay as may appear just.
72. Under Order 42 Rule 6(2), an applicant seeking stay of execution is required to demonstrate that substantial loss may result unless stay is granted, that the application has been made without unreasonable delay and that such security as the Court orders for the due performance of the decree or order ultimately binding upon the applicant has been given.
73. The jurisdiction is discretionary, but it is a judicial discretion which must be exercised upon settled principles and with the object of ensuring that an appeal, if successful, is not rendered nugatory. The Court must therefore balance the competing interests of the successful party in enjoying the fruits of the impugned order and those of the appellant in preserving the subject matter and efficacy of the appeal. The three requirements under Order 42 Rule 6(2) are not to be considered in isolation but in the context of the circumstances of each case.
74. The first issue I will then address is whether the Appellants have satisfied the requirements for stay of execution and enforcement.
75. The first consideration is whether the application was brought without unreasonable delay. On this issue, there is little controversy. The impugned ruling was delivered on 8th June, 2026. The present application was filed on the same date, and the memorandum of appeal was likewise lodged promptly.
76. The trial court had itself granted a 14-day stay to enable the Appellants to pursue an appeal. I am therefore satisfied that the application was made with considerable promptitude and without unreasonable delay.
77. The next and more substantial question is whether the Appellants have demonstrated that they are likely to suffer substantial loss if stay is declined. The authorities relied upon by the parties correctly recognize that substantial loss is the central consideration in an application of this nature.
78. In Kenya Shell Limited v Benjamin Karuga Kibiru & Another (1986) KECA 94 (KLR), the Court of Appeal emphasized that in the absence of evidence of substantial loss, it would be difficult to demonstrate that an appeal would otherwise be rendered nugatory.
79. The same principle has been reiterated in subsequent decisions, including James Wangalwa & Another v Agnes Naliaka Cheseto [2012] eKLR, where the Court explained that the mere commencement or likelihood of execution does not, by itself, constitute substantial loss. The applicant must demonstrate circumstances which would irreparably affect or negate the essential core of the appeal.
80. The Respondent is therefore correct in submitting that substantial loss cannot be established merely by making a bare assertion that loss will occur. The applicant must place before the Court sufficient material from which the nature and likelihood of the alleged loss can reasonably be discerned.
81. That, however, does not mean that substantial loss must necessarily take the form of an immediately quantifiable monetary loss. The Court must consider the subject matter of the dispute and the consequences that may follow if the impugned order is implemented before the appeal is heard.
82. In the present case, the dispute concerns possession of a specific motor vehicle, namely motor vehicle registration number KDW 331D. The 1st Appellant asserts that the vehicle was repossessed pursuant to the alleged breach of the hire purchase agreement by the Respondent. The Respondent, on the other hand, asserts that she had paid for the vehicle and that its repossession was illegal and unprocedural.
83. These are contested matters which ultimately fall to be determined in the substantive proceedings and, to the extent challenged, in the appeal.
84. The Appellants have, however, identified particular circumstances which distinguish this case from one where substantial loss is merely alleged. They contend that the Respondent had fallen into arrears of Ksh.1,830,000/-, had interfered with the vehicle’s tracking device, and had used the vehicle when its insurance cover had expired. They further contend that the contractual period was due to expire at the end of June, 2026 and that no payments had been made since the institution of the suit.
85. Although these allegations are disputed in substance, they have not been specifically rebutted by documentary evidence in the replying affidavit.
86. More importantly, the consequence of implementing the impugned ruling is not simply the payment of money which can readily be recovered or compensated. The immediate consequence concerns possession and control of an identifiable chattel.
87. If the vehicle is released to the Respondent and is subsequently removed beyond the effective reach of the Appellants, damaged, disposed of, or otherwise materially altered before the appeal is heard, the appellate court may be confronted with a substantially different factual situation from that which existed when the appeal was lodged.
88. I therefore find that the Appellants have demonstrated a sufficient risk of substantial prejudice to justify preservation of the subject matter. I emphasize, however, that this finding does not amount to a determinatio
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