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Court of AppealPartially AllowedCivil Appeal (Malindi)· [2024] KECA 749 (KLR)

Francois Makorani Ddaiddo v Bank of India (k) Ltd

Court of Appeal of Kenya
21 June 2024
AMA. K. MurgorKLDr. K. I. LaibutaGOG. V. Odunga
5,256 words in judgment
View original judgmentRead on Kenya Law Watch case
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·~21 min to read original · ~4 min brief

The bottom line

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Kenya's Court of Appeal held that a 17-year-delayed employment claim was time-barred and that the employment court had no power to decide a bank's mortgage counterclaim.

What this practically means

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Executive summary

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The appellant, a former employee of Bank of India (K) Ltd, was dismissed on 5th August 1998 for participating in an unlawful strike, and the Industrial Court upheld the dismissal in Cause No. 77 of 1999. He later sued in the High Court at Mombasa in HCCC No. 164 of 2005, principally resisting the bank's exercise of its statutory power of sale over plot MN/192/II charged for loans. After transfer to the ELRC as Cause No. 616 of 2015, he amended his claim to seek reinstatement, VERS compensation, medical cover, provident fund dues, exemplary damages and declarations. The bank defended the suit and counterclaimed for Kshs. 14,427,266/20 under three Charges. The ELRC (Byram Ongaya, J) dismissed both the suit and the counterclaim as time barred, with each party bearing its own costs. The appellant appealed on 13 grounds. The Court of Appeal framed two issues: limitation and the ELRC's jurisdiction over the mortgage-debt counterclaim. It held the employment claim was statute barred under section 90 of the Employment Act, the substantive claim having been raised seventeen years after dismissal. It further held that the ELRC had no jurisdiction over the bank's counterclaim, which rested on mortgage debts outside section 12 of the ELRC Act, and that in the absence of a cross-appeal the counterclaim itself could not be allowed. The appeal succeeded in part: the ELRC judgment was set aside and substituted with declarations that the suit was time barred and that the ELRC lacked jurisdiction over the counterclaim; each party was to bear its own costs of the appeal.

Key legal issues

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01

Limitation of the appellant's employment claim

Holding

The suit founded on the contract of service was statute barred under section 90 of the Employment Act, whether the cause of action arose in 1998 or 2005

Reasoning

Section 90 of the Employment Act limits actions on contracts of service to three years. The appellant's employment ended on 5th August 1998 and the Industrial Court upheld the dismissal in 2001; yet the substantive claim for termination/early-retirement compensation was only introduced in the Further Amended Memorandum of Claim of 2015, some seventeen years later. Following the authorities on section 90, the Court held the claim time barred and affirmed that finding even though it set aside the judgment on the jurisdictional ground.

p. 8
02

Jurisdiction of the ELRC over the mortgage-debt counterclaim

Holding

The ELRC had no jurisdiction to entertain the respondent's counterclaim on the mortgage debt or to make any finding on whether it was time barred

Reasoning

Article 162(2)(a) of the Constitution and section 12 of the ELRC Act confine the ELRC to employment and labour relations disputes. A counterclaim founded on a mortgage debt under three Charges over land is not an employer/employee dispute. Relying on the Supreme Court's demarcation of the jurisdictions of the High Court, ELC and ELRC, the Court held the counterclaim was not properly before the ELRC, so the trial court's finding that it was time barred was a nullity and was set aside.

p. 10

Legal principles established

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  • Civil actions arising out of a contract of service must be commenced within three years next after the act, neglect or default complained of, or, in the case of continuing injury or damage, within twelve months next after the cessation thereof
  • The ELRC's jurisdiction does not extend to disputes over mortgage debts, which are not employer/employee disputes within section 12 of the ELRC Act
  • The ELC, the ELRC and the High Court are different and autonomous courts exercising different and distinct jurisdictions, and none may entertain matters reserved to the others

Court orders

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  1. 1.The judgment and decree of the ELRC (Byram Ongaya, J) dated 16th July 2021 be and is hereby set aside and substituted therefor
  2. 2.A declaration that the appellant's suit in ELRC Cause No. 616 of 2015 was time barred
  3. 3.A declaration that the ELRC had no jurisdiction to entertain the respondent's counterclaim or make any finding thereon
  4. 4.Each party shall bear their own costs of the appeal
On appeal from
Employment and Labour Relations Court
ELRC Cause No. 616 of 2015
Jurisdiction invoked
First appeal to the Court of Appeal under the Court of Appeal Rules from the ELRC decision

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (3)

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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, "Francois Makorani Ddaiddo v Bank of India (k) Ltd", Case Analysis (2024). Civil Appeal (Malindi). Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2024/749/eng@2024-06-21

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