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Court of AppealAllowedCivil Appeal (Application) 50 of 2016· [2022] KECA 700 (KLR)

Alliance One Tobacco Kenya Limited v Kenya Union of Commercial, Food and Allied Workers & 5 others

Court of Appeal
22 July 2022
DMD.K. MusingaJMJ. MohammedSKS. ole Kantai
781 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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Once an appeal succeeds in Kenya, any bank guarantee lodged as security for a stay of execution must be released to the party that deposited it.

What this practically means

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Executive summary

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This ruling of the Court of Appeal (Musinga, Mohammed and ole Kantai, JJA) disposed of a Motion by Alliance One Tobacco Kenya Limited seeking release of a bank guarantee it had lodged as security. The background was a judgment of Ongaya, J. of the Employment and Labour Relations Court at Nyeri dated 25th November 2015 in Cause No. 163 of 2015 (consolidated with Cause No. 164 of 2015), in which the union and individual claimants succeeded. Alliance One filed a Notice of Appeal against part of the judgment and obtained a conditional stay of execution from the Court of Appeal on 31st May 2016, conditional on paying Ksh.10,000,000 into a joint interest-earning account or filing a bank guarantee for that sum. It filed a CFC Stanbic Bank guarantee on 28th June 2016. The appeal was allowed on 11th July 2019. By Motion under Rule 42 of the Court of Appeal Rules, 2010, the applicant sought an order directing the Deputy Registrar at Nyeri to release the original and triplicate copies of the guarantee. The court held that once the appeal was allowed the substratum of the security was lost and the guarantee was no longer necessary. Counsel for the 2nd to 6th respondents confirmed he had executed documents for release, leaving the Motion uncontested. The court allowed the Motion, directed release of the original guarantee and any copies in the file, and ordered each party to bear their own costs as the matter was uncontested.

Key legal issues

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01

Release of a bank guarantee lodged as security for conditional stay of execution after the appeal has been allowed

Holding

The court directed release of the original guarantee and copies in the file, there being no reason advanced against release and the respondents having executed documents for release.

Reasoning

The stay order of 31st May 2016 was conditional on depositing Ksh.10,000,000 or filing a bank guarantee, which the applicant duly filed. Once the appeal was allowed on 11th July 2019, the purpose of the security fell away. Counsel for the 2nd to 6th respondents confirmed he had executed documents for release, leaving the Motion uncontested.

p. 2

Legal principles established

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  • Where a conditional stay of execution pending appeal was secured by a bank guarantee and the appeal is subsequently allowed, the substratum of the security is lost and the guarantee is no longer necessary and should be released.

Court orders

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  1. 1.The Motion dated 27th January, 2022 is allowed
  2. 2.The Registrar is directed to release to the applicant the original guarantee issued by CFC Stanbic Bank and any copies that may be in the file
  3. 3.Each party to bear their own costs

Authorities

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Legislation

  • Court of Appeal Rules, 2010Rule 42
On appeal from
Employment and Labour Relations Court of Kenya at Nyeri
Cause No. 163 of 2015 (Consolidated with Cause No. 164 of 2015)
Jurisdiction invoked
Rule 42 of the Court of Appeal Rules, 2010 and all other enabling provisions of law

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, "Alliance One Tobacco Kenya Limited v Kenya Union of Commercial, Food and Allied Workers & 5 others", Case Analysis (2022). Civil Appeal (Application) 50 of 2016. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2022/700/eng@2022-07-22

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