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Court of AppealAllowedCivil Application No. 341 of 2019· [2020] KECA 35 (KLR)

Radio Frequency Systems (e.a) Limited v Nehemiah Kiprop Kiplagat & 8 others

Court of Appeal
18 December 2020
Martha Karambu KoomeM. K. KoomeHOHannah OkwenguMohamed Abdulahi WarsameM. Warsame
1,014 words in judgment
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The bottom line

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Kenya's Court of Appeal stopped enforcement of a Kshs. 20 million judgment against a company, ruling the money likely couldn't be refunded if its appeal succeeded.

What this practically means

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Executive summary

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This is a single-judgment ruling of a three-judge bench of the Court of Appeal at Nairobi (Koome, Okwengu and Warsame, JJ.A) on an application dated 28th October, 2019 under Rule 5(2)(b) of the Court of Appeal Rules, seeking stay of execution of a ruling of the Employment and Labour Relations Court at Nairobi (Wasilwa, J.) dated 14th October, 2019 in ELRC No. 567 of 2019 pending the hearing of an intended appeal. The dispute arose from infighting among the directors of the applicant company, which produced divergent instructions to two law firms and the adoption of a consent order settling the respondents' employment claims. The Employment and Labour Relations Court found that Simon Horner, the chief executive officer, managing director and main shareholder, had authorized the consent, held it authentic and not fraudulent, and dismissed the applicant's motion to set it aside. The Court of Appeal applied the established two-limb test: the appeal must be arguable and, absent stay, the appeal would be rendered nugatory if it succeeded. It found arguable issues on whether the respondents had resigned and whether an employer-employee relationship existed. On the nugatory limb, applying Africa Eco-camps, it held that once the applicant expressed a reasonable fear of non-refund, the evidential burden shifted to the respondents, who did not discharge it. The court allowed the motion, granted the stay, and ordered costs of the application to be in the intended appeal.

Key legal issues

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01

Arguability of the intended appeal

Holding

The appeal was not frivolous; it raised arguable points including whether the respondents resigned and whether an employer-employee relationship existed.

Reasoning

The court perused the draft memorandum of appeal and identified arguable issues: whether the court below erred in failing to consider that the respondents had resigned from the applicant company, and whether an employer-employee relationship existed between the parties. This satisfied the first limb of the Rule 5(2)(b) test.

p. 2
02

Nugatory value of the intended appeal

Holding

Enforcement of the consent order would render the appeal nugatory because the respondents would be unable to refund the money if the appeal succeeded.

Reasoning

The applicant contended that once the decretal sum of Kshs. 20,238,324.27 was paid out, it could not be recovered from the respondents if the appeal succeeded. The respondents did not challenge this contention. Applying the Africa Eco-camps principle, the evidential burden shifted to the respondents, who did not discharge it, so the nugatory limb was satisfied.

p. 2

Legal principles established

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  • An application under Rule 5(2)(b) succeeds only if the appeal is arguable and, if stay is not granted, the appeal will be rendered nugatory if it eventually succeeds.
  • Once an applicant expresses a reasonable fear that a respondent would be unable to refund the decretal sum, the evidential burden shifts to the respondent to show what resources he has to satisfy the decree should the appeal succeed.

Court orders

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  1. 1.Stay of execution of the ruling and order of the Employment and Labour Relations Court (Wasilwa, J.) dated 14th October, 2019 pending the hearing and determination of the intended appeal
  2. 2.Costs of the application to be in the intended appeal
On appeal from
Employment and Labour Relations Court at Nairobi
ELRC No. 567 of 2019
Jurisdiction invoked
Rule 5(2)(b) of the Court of Appeal Rules

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (2)

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Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.

Cite this brief

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Cite this brief

Caselaw, "Radio Frequency Systems (e.a) Limited v Nehemiah Kiprop Kiplagat & 8 others", Case Analysis (2020). Civil Application No. 341 of 2019. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2020/35/eng@2020-12-18

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