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Court of AppealDismissedNot stated in the judgment· [2024] KECA 1226 (KLR)

Uzuri Foods Limited v Ngwenze & 169 others (Civil Application E067 of 2024) [2024] KECA 1226 (KLR)

Court of Appeal
20 September 2024
2,068 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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Kenya's Court of Appeal refused to freeze Kshs.5 million already paid to 170 former employees, ruling a stay is pointless once the money is gone.

What this practically means

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Executive summary

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This is a singlejudge application under rules 1(2) and 5(2)(b) of the Court of Appeal Rules, 2020 by Uzuri Foods Limited seeking stay of execution of a ruling of the Employment and Labour Relations Court by Abuodha, J. dated 26th January, 2024, which ordered the release to the respondents - over 170 former employees whose allegedly unfair terminations had been judicially determined in their favour by Wasilwa, J. on 11th November, 2020 - of Kshs.5,000,000 deposited in a joint interest-earning account as a condition of a stay of execution granted by Mbaru, J. on 31st May, 2021. The trial court released the deposit because, despite a Notice of Appeal, the applicant had not filed a record of appeal years after the proceedings were ready. Before the Court of Appeal, the applicant argued an arguable appeal and risk of substantial loss; the respondents countered that the application was academic since the money had already been released on 19th February, 2024. Applying the classic two-limb test from Stanley Kang'ethe Kinyanjui vs. Tony Ketter, the Court accepted that the draft grounds of appeal were arguable, but held that the second limb failed: with the deposited sum already released, there was no money in the bank for which a 'don't release' order could be made and the appeal could not be rendered nugatory. An oral request for temporary stay at the hearing was also refused. The motion was dismissed with costs to the respondents. A notice of preliminary objection filed by the respondents was not urged and was not determined. Judgment of the full bench of Murgor, ole Kantai and Ali-Aroni, JJA, delivered at Nairobi on 20th September, 2024.

Key legal issues

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01

Whether the intended appeal is arguable

Holding

The draft grounds - that the Judge erred in failing to evaluate the evidence, in allowing the release application despite a pending extension-of-time application in the Court of Appeal, and in directing release of the security deposit - are arguable and not idle grounds

Reasoning

The Court applied the established rule 5(2)(b) threshold, drawing on Damji Pragji Mandavia vs. Sara Lee Household & Bodycare (K) Ltd, holding that the draft grounds of appeal in the Memorandum raised real issues meriting full consideration, satisfying the first limb of the test even though they may not ultimately succeed.

p. 4
02

Whether the appeal will be rendered nugatory absent stay

Holding

It will not, because the Kshs.5,000,000 security deposit had already been released to the respondents on 19th February, 2024, leaving nothing in the bank account capable of being preserved by a stay order

Reasoning

The Court found that the money deposited at Stanbic Bank, Upperhill Branch pursuant to the conditional stay order of 31st May, 2021 had been released pursuant to the ruling under appeal. With the res gone, no 'don't release' order could issue and the nugatory test failed, disposing of the motion.

p. 4

Legal principles established

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  • An applicant under rule 5(2)(b) must demonstrate that the appeal or intended appeal is arguable and that it will be rendered nugatory absent stay
  • An arguable ground of appeal is not one that will necessarily succeed, but one that calls for full consideration by the Court

Court orders

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  1. 1.The Motion is dismissed
  2. 2.Costs of the motion awarded to the respondents

Authorities

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Legislation

  • Court of Appeal Rules, 2020rule 1(2)
  • Court of Appeal Rules, 2020rule 5(2)(b)

Cases cited (2)

  • Stanley Kang’ethe Kinyanjui vs. Tony Ketter & 5 Others
    [2013] eKLR
  • Damji Pragji Mandavia vs. Sara Lee Household & Bodycare (K) Ltd
    Civil Application No. NAI. 345 of 2004 (UR)
On appeal from
Employment and Labour Relations Court
Not stated in the judgment
Jurisdiction invoked
Rules 1(2) and 5(2)(b) of the Court of Appeal Rules, 2020

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, "Uzuri Foods Limited v Ngwenze & 169 others (Civil Application E067 of 2024) [2024] KECA 1226 (KLR)", Case Analysis (2024). Not stated in the judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2024/1226/eng@2024-09-20

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