1. This ruling is in respect to the application dated 21st November 2025 in which the Applicant seeks interim and substantive orders of stay of execution of the decree arising from the judgment delivered by the Small Claims Court in SCCCOMM/E3558/2024 pending the hearing and determination of the appeal. The application was necessitated by the Respondent's commencement of execution after the interim stay earlier granted by this Court lapsed.
2. The application is supported by the affidavit of Ong'uti Mang'are, Advocate, who explains that this Court (differently constituted) had on 11th September 2025 granted interim stay pending directions on 1st October 2025. Counsel states that he logged into the virtual court at 9.00 a.m. only to find that the Court had commenced its sitting earlier than indicated on the cause list and that the matter had already been called out.
3. He further depones that subsequent confusion regarding cause listings and the absence of the trial Judge delayed the hearing of the application dated 8th September 2025. He contends that while the application for stay remained pending, the Respondent proceeded to extract a decree and commenced execution, thereby necessitating the present application.
4. The Applicant submits that the appeal is arguable and raises issues relating to jurisdiction of the Small Claims Court, the burden and standard of proof and the lifting of the corporate veil. He contends that unless stay is granted, the intended appeal will be rendered nugatory and he will suffer substantial loss through execution against his personal assets for what he describes as a corporate liability. Counsel relied on Greyhound Company Ltd vs. Globetrotter Agency Ltd [2022] KEHC 9981 (KLR), Stanley Karanja Wainaina & Another vs. Ridon Anyangu Mutubwa [2016] eKLR and Tabro Transporters Ltd vs. Absolom Dova Lumbasi [2012] eKLR on the principles governing stay pending appeal and submitted that the Applicant is willing to comply with any conditions as to security that the Court may impose.
5. The Respondent opposes the application through the Grounds of Opposition dated 10th December 2025. He submits that the Applicant has failed to satisfy the mandatory requirements under Order 42 Rule 6(2) of the Civil Procedure Rules. It is argued that no substantial loss has been demonstrated; that the application was filed fifty-two days after the earlier interim orders lapsed; that no security has been offered; and that the intended appeal is frivolous and raises no arguable issues. Reliance was placed on S ofinac Co. Ltd vs. Nelphaat Kimotho Mutuu [2013] eKLR for the proposition that inability to refund a decretal sum must be proved and not merely alleged.
6. I have considered the application, the affidavit in support, the Grounds of Opposition and the rival submissions.
7. The application is anchored on Order 42 Rule 6 of the Civil Procedure Rules which provides that an applicant must demonstrate that substantial loss may result unless stay is granted, that the application has been made without unreasonable delay and that security for the due performance of the decree has been furnished.
8. The principles governing stay pending appeal are now settled. In Butt vs. Rent Restriction Tribunal [1982] KLR 417, the Court held that the discretion to grant stay should be exercised in such a manner as not to render an appeal nugatory while at the same time safeguarding the successful litigant's right to enjoy the fruits of the judgment.
9. In James Wangalwa & Another vs. Agnes Naliaka Cheseto [2012] eKLR, the Court emphasized that execution is a lawful process and does not by itself amount to substantial loss. The applicant must demonstrate other factors showing that the appeal would be rendered nugatory if stay is refused.
10. The record shows that immediately after filing the appeal, the Applicant filed an application dated 8th September 2025 seeking stay of execution and obtained interim orders on 11th September 2025. The explanation given for the failure to obtain extension of those orders is that the matter was not reached owing to confusion regarding the Court's sitting time and subsequent listing before different judicial officers. I am satisfied that the documents annexed in support of the application lend credence to that explanation. I am therefore unable to agree with the Respondent that the Applicant was indolent or guilty of inordinate delay.
11. The next issue is whether substantial loss has been established. The Applicant contends that execution is directed against his personal assets yet the transaction giving rise to the decree involved a limited liability company. I am of the view that whether or not that contention ultimately succeeds is a matter for determination in the appeal. At this interlocutory stage, I am satisfied that the appeal raises arguable issues which ought to be preserved pending hearing. If execution proceeds and the Applicant's assets are attached before the appeal is heard, the appeal may well be rendered nugatory.
12. The Respondent has submitted that he is financially capable of refunding the decretal sum if required to do so. While that may be so, the Court must balance the competing rights of both parties. The Applicant has an undoubted right of appeal while the Respondent equally has a right to enjoy the fruits of his judgment. The proper balance is achieved by granting a conditional stay.
13. On security, although none was initially tendered, the Applicant has expressed willingness to comply with any security that the Court may order. It is trite that security is intended to protect the decree-holder and not to punish the appellant. In the circumstances of this case, I find that an order requiring the deposit of the decretal sum will adequately safeguard the interests of both parties.
14. Accordingly, I find merit in the Notice of Motion dated 21st November 2025 and make the following orders:
a) There shall be a stay of execution of the judgment and decree in SCCCOMM/E3558/2024 pending the hearing and determination of this appeal.
b) The stay is conditional upon the Applicant depositing the entire decretal sum in an interest earning joint account in the names of the parties’ advocates, or in Court, within thirty (30) days from the date of this ruling.
c) In default of compliance with Order (b) above, the stay herein shall automatically lapse without the necessity of any further order of the Court.
d) The record of appeal shall be filed, if not already filed, and the appeal shall be set down for directions on a priority basis.
e) Costs of the application shall abide the outcome of the appeal.
It is so ordered.
2. The application is supported by the affidavit of Ong'uti Mang'are, Advocate, who explains that this Court (differently constituted) had on 11th September 2025 granted interim stay pending directions on 1st October 2025. Counsel states that he logged into the virtual court at 9.00 a.m. only to find that the Court had commenced its sitting earlier than indicated on the cause list and that the matter had already been called out.
3. He further depones that subsequent confusion regarding cause listings and the absence of the trial Judge delayed the hearing of the application dated 8th September 2025. He contends that while the application for stay remained pending, the Respondent proceeded to extract a decree and commenced execution, thereby necessitating the present application.
4. The Applicant submits that the appeal is arguable and raises issues relating to jurisdiction of the Small Claims Court, the burden and standard of proof and the lifting of the corporate veil. He contends that unless stay is granted, the intended appeal will be rendered nugatory and he will suffer substantial loss through execution against his personal assets for what he describes as a corporate liability. Counsel relied on Greyhound Company Ltd vs. Globetrotter Agency Ltd [2022] KEHC 9981 (KLR), Stanley Karanja Wainaina & Another vs. Ridon Anyangu Mutubwa [2016] eKLR and Tabro Transporters Ltd vs. Absolom Dova Lumbasi [2012] eKLR on the principles governing stay pending appeal and submitted that the Applicant is willing to comply with any conditions as to security that the Court may impose.
5. The Respondent opposes the application through the Grounds of Opposition dated 10th December 2025. He submits that the Applicant has failed to satisfy the mandatory requirements under Order 42 Rule 6(2) of the Civil Procedure Rules. It is argued that no substantial loss has been demonstrated; that the application was filed fifty-two days after the earlier interim orders lapsed; that no security has been offered; and that the intended appeal is frivolous and raises no arguable issues. Reliance was placed on S ofinac Co. Ltd vs. Nelphaat Kimotho Mutuu [2013] eKLR for the proposition that inability to refund a decretal sum must be proved and not merely alleged.
6. I have considered the application, the affidavit in support, the Grounds of Opposition and the rival submissions.
7. The application is anchored on Order 42 Rule 6 of the Civil Procedure Rules which provides that an applicant must demonstrate that substantial loss may result unless stay is granted, that the application has been made without unreasonable delay and that security for the due performance of the decree has been furnished.
8. The principles governing stay pending appeal are now settled. In Butt vs. Rent Restriction Tribunal [1982] KLR 417, the Court held that the discretion to grant stay should be exercised in such a manner as not to render an appeal nugatory while at the same time safeguarding the successful litigant's right to enjoy the fruits of the judgment.
9. In James Wangalwa & Another vs. Agnes Naliaka Cheseto [2012] eKLR, the Court emphasized that execution is a lawful process and does not by itself amount to substantial loss. The applicant must demonstrate other factors showing that the appeal would be rendered nugatory if stay is refused.
10. The record shows that immediately after filing the appeal, the Applicant filed an application dated 8th September 2025 seeking stay of execution and obtained interim orders on 11th September 2025. The explanation given for the failure to obtain extension of those orders is that the matter was not reached owing to confusion regarding the Court's sitting time and subsequent listing before different judicial officers. I am satisfied that the documents annexed in support of the application lend credence to that explanation. I am therefore unable to agree with the Respondent that the Applicant was indolent or guilty of inordinate delay.
11. The next issue is whether substantial loss has been established. The Applicant contends that execution is directed against his personal assets yet the transaction giving rise to the decree involved a limited liability company. I am of the view that whether or not that contention ultimately succeeds is a matter for determination in the appeal. At this interlocutory stage, I am satisfied that the appeal raises arguable issues which ought to be preserved pending hearing. If execution proceeds and the Applicant's assets are attached before the appeal is heard, the appeal may well be rendered nugatory.
12. The Respondent has submitted that he is financially capable of refunding the decretal sum if required to do so. While that may be so, the Court must balance the competing rights of both parties. The Applicant has an undoubted right of appeal while the Respondent equally has a right to enjoy the fruits of his judgment. The proper balance is achieved by granting a conditional stay.
13. On security, although none was initially tendered, the Applicant has expressed willingness to comply with any security that the Court may order. It is trite that security is intended to protect the decree-holder and not to punish the appellant. In the circumstances of this case, I find that an order requiring the deposit of the decretal sum will adequately safeguard the interests of both parties.
14. Accordingly, I find merit in the Notice of Motion dated 21st November 2025 and make the following orders:
a) There shall be a stay of execution of the judgment and decree in SCCCOMM/E3558/2024 pending the hearing and determination of this appeal.
b) The stay is conditional upon the Applicant depositing the entire decretal sum in an interest earning joint account in the names of the parties’ advocates, or in Court, within thirty (30) days from the date of this ruling.
c) In default of compliance with Order (b) above, the stay herein shall automatically lapse without the necessity of any further order of the Court.
d) The record of appeal shall be filed, if not already filed, and the appeal shall be set down for directions on a priority basis.
e) Costs of the application shall abide the outcome of the appeal.
It is so ordered.