Xetova Limited v TRT Investments Limited & 3 others (Civil Application E155 of 2024) [2024] KECA 1941 (KLR) (20 December 2024) (Ruling)
Neutral citation:
[2024] KECA 1941 (KLR)
Republic of Kenya
Civil Application E155 of 2024
PO Kiage, A Ali-Aroni & LA Achode, JJA
December 20, 2024
Between
Xetova Limited
Applicant
and
TRT Investments Limited
1st Respondent
Bramuel Mwalo
2nd Respondent
Xetova Inc
3rd Respondent
Extra Dimentions Company Limited
4th Respondent
(An application for stay of the execution of the ruling and order of the High Court of Kenya at Nairobi (Mabeya, J.) dated 26th June 2023 in Civil Case No. E223 of 2023
Civil Case E223 of 2023
)
Ruling
1.Notwithstanding the curious citing and invocation of numerous other provisions of law, including Articles 25(a), 50, 159, 164(3) (a) 1. 259 and section 7 (1) of the Sixth Schedule of the Constitution of Kenya 2010, what is before us in the motion dated 28th March 2024 is simply an application for stay of execution of the ruling and order of the High Court (Mabeya, J.) made on 26th June 2023. It would have sufficed to cite Rule 5(2)(b) of the Court of Appeal Rules (2022) solely.
2.The said motion on its face is expressed as founded on some nineteen grounds but such application need only demonstrate that the applicant has an arguable appeal, and that if the stay sought is not granted, such appeal would be rendered nugatory or of no effect. The contours of these twin principles were fully elucidated upon by this Court in Stanley Kangethe Kinyanjui v Tony Keter & 5 Others [2013] eKLR and, being old hat, we need not repeat them herein though we fully bear them in mind as we exercise our free and unfettered discretion in considering the motion.
3.An affidavit in support of the motion was sworn on 28th March 2024 by one Bramuel Mwalo Opiyoh, a Director of the applicant, who says he is fully conversant with the facts of the matter and authorized and competent to swear on behalf of the applicant company. He swears that the learned judge issued an ex-parte order for an inspector to inspect the affairs of the applicant and report to the High Court on, inter alia, its registration and shareholding up to 18th May 2022, its governance and management, operations and its bank accounts as from the said date. He avers that the judge proceeded in error because the 1st respondent, at whose instance the order of inspection was given, did not have the requisite capacity as it did not have the minimum shareholding to entitle it to an inspection so that the applicant was “condemned to an inspection, by a person who is not its member.” He further swears that the applicant would, if execution is allowed to proceed, be “subjected to substantial loss,” exposure and ridicule due to the inspection, done contrary to law. He avers that it is in the interests of justice that stay of execution be granted.
4.At the hearing of the motion, Mr. Makau, learned counsel for the applicant, reiterated the position advanced in the affidavit of support and stated that as far as the nugatory aspect is concerned, the order of inspection, if not stayed by this Court, would compromise the applicant’s fundraising efforts critical to its prospects as a start-up.
5.For the 1st respondent, the main party targeted by this motion, learned counsel Ms. Impano submitted that the 1st respondent did invest in the applicant and thus the had capacity to seek and obtain orders of inspection. More tellingly, counsel asserted the 1st respondent’s sworn position that the parties jointly agreed on an inspector who presented a joint report dated 10th October 2023. The 1st respondent thus already has all the information it sought and has no intention of conducting any further inspection or investigation of the applicant. The order is thus fully executed and there is nothing to stay, she contended, as she besought us to dismiss the motion.
6.Mr. Walela, learned counsel for the 2nd respondent had filed no submissions and did not address us beyond stating that he was in support of the application. On his part, Mr. Zakayo, the 4th respondent’s learned counsel indicated that he was neutral and had no view.
7.Having given due consideration of this motion and the submissions made by counsel with the principles we addressed earlier in view, we think, with respect, that this application cannot succeed. It may well be that the threshold being low, the appeal is arguable, given that one need raise only a simple bona fide ground deserving of this Court’s consideration, and an arguable point is not one that must necessarily succeed. There may be something to be interrogated on appeal on whether or not the 1st respondent had the requisite capacity and was deserving of the order of inspection.
8.On the nugatory aspect, however, we think that the process of inspection, as the learned judge expressed himself in a ruling on an application for stay of execution which he delivered on 5th March 2014 “is not meant to expose or shame the company but rather unearth how the company has been run. It is for its own benefit." We do not think that an order of inspection would cause the applicant such loss as would render the intended appeal nugatory. Indeed, it would seem that the company may well have suffered an advantage, and not a loss.
9.More critical to the fate of this application is the uncontroverted averment and submission that the inspection has been fully conducted, the 1st respondent has obtained all the information it sought and has no intention of taking any further steps to inspect or seek information from the applicant. What that means is that the execution is completed and the application is overtaken by events. This Court is being invited to act in vain in a matter already moot. That it cannot do.
10.In the result, this application is devoid of merit and is dismissed with costs to the 1st respondent.Order accordingly.
DATED AND DELIVERED AT NAIROBI THIS 20TH DAY OF DECEMBER, 2024.P. O. KIAGE............................JUDGE OF APPEAL ALI-ARONI............................JUDGE OF APPEALL. ACHODE............................JUDGE OF APPEALI certify that this is a true copy of the original.SignedDEPUTY REGISTRAR