Mohb Limited v African Banking Corporation Ltd [2022] KEHC 12962 (KLR)

Mohb Limited v African Banking Corporation Ltd (Civil Suit E109 of 2021) [2022] KEHC 12962 (KLR) (Commercial and Tax) (9 September 2022) (Ruling)

Neutral citation: [2022] KEHC 12962 (KLR)

Republic of Kenya

In the High Court at Nairobi (Milimani Commercial Courts Commercial and Tax Division)

Commercial and Tax

Civil Suit E109 of 2021

A Mabeya, J

September 9, 2022

Between

Mohb Limited

Appellant

and

African Banking Corporation Ltd

Respondent

(Being an Appeal from the Ruling of Hon. D.M. Kivuti (Mr.) in Civil CaseNumber 1221 of 2018 delivered on 25th October, 2021)

Ruling

1. Before Court is the appellant’s Motion on Notice dated November 23, 2021. It was brought under Order 40 Rule 1 and Order 42 Rule 6 of the Civil Procedure Rules.

2. The appellant sought to stay the execution of the decree dated 14/1/2019 pending the hearing and determination of this appeal. The grounds were that by a ruling delivered on October 25, 2021, the lower court (Hon. D.M. Kivuti (Mr), conditionally set aside the default judgement entered against the appellant on 27/8/2017.

3. That the condition was for the deposit of the entire decretal amount flowing from the judgement in the sum of Ksh.5,361,587. 90 in a joint account within 30 days of the ruling.

4. That the deposit of the said sum would result in substantial and irreparable loss on the part of the applicant as it is not in a financial position to do so. That execution would ensue unless the condition was met thereby denying the appellant an opportunity to defend the claim.

5. It was contended that unless the stay is granted, the appeal would be rendered nugatory.

6. The respondent opposed the application vide a replying affidavit sworn on 9/2/2022 by its legal officer. It was averred that the applicant failed to enter appearance and file a defence despite having been served with summons and plaint on 19/6/2018. That judgment in default entered on 27/8/2018 was regular.

7. That by a letter dated 6/7/2021, the applicant admitted its indebtedness to the respondent and proposed methods of resolving the dispute and that the applicant’s main reason for instituting the appeal is to scuttle the respondent’s effort in executing the decree.

8. In a further affidavit sworn on 15/3/2022, the appellant stated that the Summons served by one Timothy Oyombera was not served upon the appellant. That the said Timothy Oyombera swore two conflicting affidavits of service.

9. The court has considered the averments and submissions of the parties. This is an application for stay of execution pending appeal. The principles are well known. The applicant must show that it will suffer substantial loss if the stay is not granted and must give security for the due performance of the decree that will ultimately be binding on it. The application must be made timeously.

10. The application was made on November 23, 2021. The order being challenged was made on October 25, 2021. This is a period of less than a month. The Court finds that the application was made timeously.

11. The second consideration is whether the applicant has illustrated that it will suffer substantial loss if the stay is not granted.

12. The applicant submitted that it is unable to deposit the decretal sum of Ksh.5,361,587. 90/- within the time specified. That if the prayers sought are not granted, the appeal will be rendered nugatory as the respondent will proceed to execute the decree against it.

13. The applicant lodged this appeal through its memorandum of appeal dated November 18, 2021. The court is of the opinion that it raises triable issues and are worth a hearing.

14. In Kenya Power & Lighting Co Ltd v Abdulhakim Abdulla Mohamed & another [2017] eKLR, it was held: -“The contested order, which demands that a party pay substantial sums of money in a claim which is yet to be proved and in respect of which the court has found that there is an arguable defence raising triable issues, does not appear to us in any way to advance or facilitate the just, proportionate, affordable and resolution of disputes as demanded by the overriding objective.”

15. Further, in Housing Finance Company of Kenya v Sharok Kher Mohamed Ali Hirji & another [2015] eKLR, the Court of Appeal pronounced itself thus: -“In seeking to balance the interests of the respective parties, the approach we have always taken in determining whether or not to grant a stay of execution is to ensure that applicants are not denied their opportunity to ventilate their legal cases as afforded under the laws through the appeal process, with the possibility of success, while at the same time, respondents are not denied the fruit of judgment in their favour and their rights are safeguarded.”

16. In the impugned ruling, the lower court found that there were doubts on how service was effected. It also found that although there was an apparent admission of debt, the draft defence raised triable issues.

17. I have seen the Memorandum of Appeal in this appeal. It raises serious issues that require scrutiny. Further I find that in an attempt to balance the interest of the parties herein, the court will grant the stay of execution pending appeal. It would not facilitate the just resolution of this dispute if the applicant is obliged to avail the entire decretal sum before the appeal is determined. However, the stay will be granted on terms.

18. Accordingly, the application is allowed and stay granted subject to the appellant depositing a sum of Ksh.2 million in an interest bearing account in the joint names of the advocates on record within 30 days of this ruling. Costs in the appeal.It is so ordered.

DATED AND DELIVERED AT NAIROBI THIS 9TH DAY OF SEPTEMBER, 2022. A. MABEYA, FCIArbJUDGE