Meiser Trading Company Limited v Mitsumi Computer Limited [2022] KEHC 1546 (KLR)

REPUBLIC OF KENYA

IN THE HIGH COURT OF KENYA

AT NAIROBI

CIVIL APPEAL NO. E406 OF 2021

MEISER TRADING COMPANY LIMITED.............................................................APPELLANT

VERSUS

MITSUMI COMPUTER LIMITED.....................................................................RESPONDENT

RULING

The applicant filed a notice of motion dated 18th August 2021 seeking the following orders

1. Spent

2. Spent

3. That the honorable court be pleased to grant stay of execution in Milimani CMCC No. 3957 of 2018 pending the hearing and determination of the appeal.

4. That the costs of this application be provided for.

The application is based on the grounds on the face of it and is supported by the affidavit of Mukesh Prakash Chandra Patel sworn on 18th August 2021. The applicant indicates that the company has appealed against the judgment in CMCC No. 3957 of 2018.

Counsel for the applicant submitted that the application herein was filed expeditiously and the applicant has established sufficient cause. In support, reliance was placed on the case of HGE V SM [2020] eKLR where it was held:-

An applicant for stay of execution of a decree or order pending appeal is obliged to satisfy the conditions set out in Order 42 Rule 6(2), aforementioned: namely (a) that substantial loss may result to the applicant unless the order is made, (b) that the application has been made without unreasonable delay, and (c) that such security as the court orders for the due performance of such decree or order as may ultimately be binding on the applicant has been given.”

It was submitted further that the appeal filed by the applicant herein has high chances of success and will be rendered nugatory unless a stay is granted and further that if execution should proceed, it will cause substantial loss and financial inconvenience in the background of a devastated economy by COVID 19. The applicant is willing to provide security for the decretal sum through a bank guarantee or as otherwise directed by the court.

The application was opposed through the respondent’s grounds of opposition dated 8th September 2021 where it was indicated that the application was brought on the wrong provisions of the law. That it is misconceived, frivolous, vexatious and the same lacks merit as it is has been filed to keep the decree holders away from the fruits of their monetary decree.

The respondent in its submissions argued that the applicant has failed to demonstrate how it will suffer loss if the orders sought are granted. The application is therefore a ploy to delay the respondent from enjoying the fruits of the judgment.

Analysis and determination

The only issue for determination herein is whether to grant a stay of execution pending the hearing and determination of the appeal. The principles guiding the courts in granting or refusing stay of execution are stated in the case of Butt vs Rent Restriction Tribunal [1979], where the court of appeal held that the discretion of the court should be exercised in such a way that it does not prevent an appeal, secondly, so that an appeal is not rendered nugatory, consideration to the special circumstances of each case and finally the court should not refuse a stay for the reason that a better remedy might become available to the applicant at a later stage of the proceedings. Further reliance has been placed in the case of Samvir Trustee Limited vs Guardian Bank Limited Nairobi HCCC 795 of 1997 where Warsame J. reiterated the principles for granting or refusing an application for stay. In Stephen Wanjohi vs Central Glass Industries Ltd, Nairobi HCCC No. 6726 of 1991, the Court identified three conditions that must be established to include; “a) Sufficient cause b) Substantial loss c) No unreasonable delay d) Security and the grant of stay is discretionary”.

Judgement in this matter was delivered on 9th July 2021 while the application herein was filed on 31st August 2021 and therefore there was no unreasonable delay. The applicants argued that the appeal has high chances of success and will be rendered nugatory unless a stay is granted and further, that if execution should proceed, it will cause substantial loss and financial inconvenience. The applicant is willing to provide security for the decretal sum through a bank guarantee or as otherwise directed by the court.

The court, in RWW vs. EKW [2019] eKLR, addressed its mind to the purpose of a stay of execution order pending appeal, in the following words:

“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.

9. Indeed to grant or refuse an application for stay of execution pending appeal is discretionary. The Court when granting the stay however, must balance the interests of the Appellant with those of the Respondent.”

It is this court’s view that it would be in the interest of justice to grant a stay of execution pending the hearing and determination of the appeal. The application dated 18th August, 2021 is hereby granted in the following terms:-

1. Execution is hereby stayed pending the hearing and determination of the pending Appeal.

2. The appellant to provide a bank guarantee of Ksh 1,539,235, the decretal sum within 45 days hereof.

3. In default of the above, orders of stay of execution shall stand vacated and the Respondent shall be at liberty to execute.

4. Costs of the application shall abide by the outcome of the appeal.

Dated and signed at Nairobi this 15th day of March. 2022

S.J. CHITEMBWE

JUDGE