Somochem Kenya Limited v Shri Ganesh Manufacturers Ltd; Santosh Jha (Applicant) [2020] eKLR Case Summary

Court
High Court of Kenya at Nairobi, Commercial & Tax Division
Category
Civil
Judge(s)
Justice Maureen A. Odero
Judgment Date
October 02, 2020
Country
Kenya
Document Type
PDF
Number of Pages
3
Explore the case summary of Somochem Kenya Limited v Shri Ganesh Manufacturers Ltd; Santosh Jha (Applicant) [2020] eKLR, highlighting key legal findings and implications in corporate law.

Case Brief: Somochem Kenya Limited v Shri Ganesh Manufacturers Ltd; Santosh Jha (Applicant) [2020] eKLR

1. Case Information:
- Name of the Case: Somochem Kenya Limited v. Shri Ganesh Manufacturers Ltd
- Case Number: Civil Suit No. 115 of 2013
- Court: High Court of Kenya at Nairobi, Commercial & Tax Division
- Date Delivered: 2nd October 2020
- Category of Law: Civil
- Judge(s): Justice Maureen A. Odero
- Country: Kenya

2. Questions Presented:
The court must resolve whether to grant a stay of execution of the decree pending the hearing and determination of an intended appeal filed by the Applicant, Santosh Jha.

3. Facts of the Case:
Somochem Kenya Limited (the Plaintiff/Decree Holder) initiated this case against Shri Ganesh Manufacturers Ltd (the Defendant) and Santosh Jha (the Applicant). The current application stems from a ruling delivered on 25th November 2019, where the court dismissed a motion to set aside orders lifting the corporate veil of the Defendant. Following this ruling, Santosh Jha filed an appeal and sought a stay of execution of the decree pending the appeal's resolution.

4. Procedural History:
The application for a stay of execution was filed on 5th December 2019, shortly after the ruling on 25th November. The Plaintiff opposed the application, arguing that it was an attempt to delay justice and that it lacked merit. The application was argued through written submissions, with the Applicant submitting on 28th February 2020 and the Plaintiff on 24th February 2020.

5. Analysis:
- Rules: The court considered Order 42 Rule 6(1) and (2) of the Civil Procedure Rules, which outline the criteria for granting a stay of execution. Specifically, the court must find that substantial loss may result to the applicant unless the order is made, that the application was made without unreasonable delay, and that security for the performance of the decree has been provided.
- Case Law: The court referenced the case of *Antone Ndiaye v. African Virtual University* [2015] eKLR, which defined "substantial loss" as any real loss of value. The court also cited *Equity Bank Ltd v. Thiga Adams Company Ltd* [2015] eKLR, emphasizing the necessity of providing security for the stay to be granted.
- Application: The court found that the application was filed within a reasonable time frame, as it was submitted only ten days after the ruling. The Applicant demonstrated that he would suffer substantial loss if the stay were not granted, including the risk of arrest and imprisonment. However, the court noted that the Applicant had not provided any security for the decree, which was a mandatory requirement. Ultimately, the court granted the stay on the condition that the Applicant deposit Kshs. 2 million into a joint interest-earning account within 30 days.

6. Conclusion:
The court ruled to grant the stay of execution of the decree pending the appeal, contingent upon the Applicant depositing the specified security amount. This decision underscores the balance between the right to appeal and the need to protect the Plaintiff's right to the fruits of their judgment.

7. Dissent:
There were no dissenting opinions noted in the ruling.

8. Summary:
The High Court of Kenya granted a stay of execution in the case of Somochem Kenya Limited v. Shri Ganesh Manufacturers Ltd & Santosh Jha, pending the outcome of an appeal. The decision highlighted the importance of providing security for stays of execution and the court's role in ensuring that both parties' rights are balanced during the appeal process. This case illustrates the procedural requirements and considerations involved in civil litigation regarding stays of execution in Kenya.

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