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Court of AppealAllowedCivil Application No. NAI 227 of 2014

Kenya National Trading Corporation v Jemimah Akoth Nydera Onyosi & 6 others [2015] KECA 599 (KLR)

Court of Appeal
3 July 2015
1,139 words in judgment
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The bottom line

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Kenya's Court of Appeal paused a Kshs.5 million employment judgment because KNTC showed its appeal was arguable and recovering refunds would be difficult.

What this practically means

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Executive summary

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The applicant, Kenya National Trading Corporation, sought a stay of execution and proceedings pending appeal under Rule 5(2)(b) of the Court of Appeal Rules against an Industrial Court judgment (Mbaru J, 11th June 2014, Cause No. 1880 of 2011) which found that the respondents' retirement was wrongful, that they had been discriminated against, and awarded them sums in excess of Kshs.5,000,000, including tax exemption sums due under a waiver. The applicant argued the intended appeal was arguable and that recovery of any decretal payments from the respondents would be difficult; the respondents countered that the appeal raised only issues of fact and that inability to refund had not been proved. Applying the settled two-limb test from Republic v Kenya Anti-Corruption Commission, the Court held the intended appeal was arguable, as the lawfulness of the termination and the discrimination finding were arguable points. On the second limb, the Court expressed doubt as to the respondents' ability to refund the decretal sum should the appeal succeed. The Court allowed the motion but granted the stay on terms: the judgment and decree of the Industrial Court were stayed until the hearing and determination of the intended appeal or further orders, conditional on the applicant depositing Kshs.5,000,000 in an interest-bearing joint account within sixty days, failing which the stay would be vacated. Costs of the application were made costs in the appeal. The bench of Karanja, Mwera and Azangalala JJ.A delivered a single unanimous ruling.

Questions the Court framed

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The issues the Court set itself to decide, in its own words.

  1. 1.Whether the intended appeal is arguable (not frivolous)
  2. 2.Whether the success of the intended appeal would be rendered nugatory if stay of execution is not granted

Key legal issues

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01

Whether the intended appeal was arguable

Holding

The intended appeal was arguable because the lawfulness of the termination and the question of discrimination were arguable points.

Reasoning

The court applied the settled two-limb test under Rule 5(2)(b). It found that whether the respondents' termination of employment was lawful and whether due process was followed, as well as whether the appellant discriminated against the respondents, were arguable points, so the intended appeal could not be described as frivolous.

p. 2
02

Whether the intended appeal would be rendered nugatory if stay was not granted

Holding

The second limb was satisfied because the court doubted the respondents' ability to refund the decretal amount exceeding Kshs.5,000,000 if the appeal succeeded.

Reasoning

Although the respondents contended that impecuniosity had not been demonstrated, the court weighed the parties' positions and expressed doubt as to whether the respondents could refund the decretal amount, now in excess of Kshs.5,000,000, should the intended appeal succeed, rendering the appeal's success nugatory.

p. 2
03

Whether stay should issue on terms

Holding

The stay was granted on terms, requiring the applicant to deposit security of Kshs.5,000,000 in a joint interest-bearing account within 60 days, failing which the stay lapses.

Reasoning

Balancing the applicant's interest against the respondents' position as retirees who should not be impeded in accessing the judgment sum if the appeal fails, the court conditioned the stay on a security deposit in a joint interest-bearing account, with automatic vacation on default within sixty days.

p. 2

Legal principles established

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  • An applicant under Rule 5(2)(b) must satisfy both limbs - arguability of the appeal and nugatory-ness - and satisfying only one limb is insufficient

Court orders

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  1. 1.Stay of the judgment and decree of the Industrial Court made on 4th June 2014 until the hearing and determination of the applicant's intended appeal or until further orders of the Court
  2. 2.The applicant to deposit Kshs.5,000,000/= in an interest-bearing account in the joint names of the parties' advocates within sixty (60) days, failing which the stay orders stand vacated
  3. 3.Costs of the application to be in the appeal

The bench

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One judgment of the whole court — no separate or dissenting opinions.

majority
majority
majority
On appeal from
Industrial Court at Nairobi (Employment and Labour Relations Court)
Industrial Court Cause No. 1880 of 2011
Jurisdiction invoked
Rule 5(2)(b) of the Court of Appeal Rules

Quotable passages

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Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.

We allow the notice of motion dated 22 nd August 2014 and order that the judgment and decree of the Industrial Court made on 4th June, 2014 be and is hereby stayed until the hearing and determination of the applicant’s intended appeal or until further orders of this Court.
p. 3Final orders - stay of execution granted
The applicant should deposit the sum of Kshs.5,000,000/= in an interest bearing account with a reputable financial institution in the joint names of the parties’ advocates within sixty (60) days from the date of this ruling, failing which the stay orders will stand vacated.
p. 3Security condition attached to stay
In order that the application may succeed, he must demonstrate both limbs and demonstrating only one limb would not avail him the order sought if he fails to demonstrate the other limb
p. 2Two-limb test under Rule 5(2)(b)

Key timeline

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Practical implications

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Frequently asked questions

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Cite this brief

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Cite this brief

Caselaw, "Kenya National Trading Corporation v Jemimah Akoth Nydera Onyosi & 6 others [2015] KECA 599 (KLR)", Case Analysis (2015). Civil Application No. NAI 227 of 2014. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2015/599/eng@2015-07-03

Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.