Blue Waters Hotel Ltd & 2 others v Guaranty Trust Bank (Kenya) Limited [2020] eKLR Case Summary

Court
High Court of Kenya at Kisumu
Category
Civil
Judge(s)
T.W. Cherere
Judgment Date
October 23, 2020
Country
Kenya
Document Type
PDF
Number of Pages
3
Explore the case summary of Blue Waters Hotel Ltd & 2 others v Guaranty Trust Bank (Kenya) Limited [2020] eKLR, detailing key legal principles and implications. Ideal for legal professionals and students seeking insights into Kenyan law.

Case Brief: Blue Waters Hotel Ltd & 2 others v Guaranty Trust Bank (Kenya) Limited [2020] eKLR

1. Case Information:
- Name of the Case: Blue Waters Hotel Ltd & Others v. Guaranty Trust Bank (Kenya) Limited
- Case Number: Commercial Case No. 79 of 2018
- Court: High Court of Kenya at Kisumu
- Date Delivered: 23rd October 2020
- Category of Law: Civil
- Judge(s): T.W. Cherere
- Country: Kenya

2. Questions Presented:
The central legal issues before the court are:
1. Whether the court should grant a stay of execution of its previous order dated 28th July 2020, which dismissed the Plaintiffs' application for an interim injunction.
2. Whether the Plaintiffs have established sufficient grounds for the issuance of an interim injunction to prevent the Defendant from exercising its statutory power of sale over the properties in question.

3. Facts of the Case:
The plaintiffs, Blue Waters Hotel Ltd and its directors William Osewe Guda and Stella Mutheu Osewe, sought relief against Guaranty Trust Bank (Kenya) Limited regarding properties registered under their names. The plaintiffs argued that they were aggrieved by the bank's actions and intended to appeal the court's ruling dismissing their earlier application for an injunction to prevent the bank from selling their properties, which were used as security for a loan. They contended that the properties were irreplaceable and that they were at risk of substantial loss if the bank proceeded with the sale.

4. Procedural History:
The case began with the Plaintiffs filing a Notice of Motion on 27th June 2018, which was amended on 6th July 2018, seeking an injunction against the bank. The court ruled on 28th July 2020, allowing the bank's motion and dismissing the plaintiffs' application. Following this, the plaintiffs filed another motion on 3rd August 2020, seeking an interim injunction to prevent the bank from exercising its statutory power of sale pending the determination of their appeal against the previous ruling.

5. Analysis:
- Rules: The court considered Order 42 Rule 6 of the Civil Procedure Rules, which stipulates the conditions under which a stay of execution may be granted, including the necessity of showing substantial loss, that the application was made without unreasonable delay, and that the applicant provides security as ordered by the court.

- Case Law: The court referenced several cases, including *Madhupaper International Ltd v Kerr* and *Butt v Rent Restriction Tribunal*, which emphasize the need for courts to ensure that an appeal is not rendered nugatory. The court also cited *Western College of Arts and Applied Sciences v Oranga & Others*, which established that a negative order cannot be stayed as there is nothing to execute.

- Application: The court found that the previous ruling was a negative order, meaning it did not impose any obligation on the parties that could be enforced. Thus, it concluded that there was no decree capable of being stayed. The court also noted that the plaintiffs failed to demonstrate the likelihood of substantial loss if the stay was not granted, and that the defendant would be able to compensate them if the appeal succeeded.

6. Conclusion:
The court dismissed the plaintiffs' motion for an interim injunction and a stay of execution of the previous order, concluding that the order was a negative one and could not be stayed. The court ruled that the plaintiffs had not established sufficient grounds for the relief sought, leading to the dismissal of their application with costs to the defendant.

7. Dissent:
There were no dissenting opinions noted in the ruling as the decision was unanimous.

8. Summary:
The High Court of Kenya ruled against Blue Waters Hotel Ltd and its directors in their attempt to stay a previous order dismissing their application for an injunction against Guaranty Trust Bank. The court found that the order was a negative one and thus incapable of being stayed. The decision underscores the importance of demonstrating substantial loss and the enforceability of court orders in civil proceedings. This case highlights the challenges faced by borrowers in disputes with financial institutions regarding the enforcement of security agreements.enforcement of security agreements.

Document Summary

Below is the summary preview of this document.

  • Blue-Waters-Hotel-Ltd--2-others-v-Guaranty-Trust-Bank-Kenya-Limited-[2020]-eKLR-Case-Summary_2193_0.jpg

This is the end of the summary preview.

Related Documents

View all summaries