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Court of AppealDismissedCivil Application No. NAI. Not stated in the ruling (application dated 21st November 2025)

Mota-Engil Engenharia Construcao Africa v Karu (Civil Application E699 of 2025) [2026] KECA 1262 (KLR)

Court of Appeal
3 July 2026
848 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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The Court of Appeal ordered Mota-Engil to deposit 12 months' salary as security and continue facing the dismissal claim, refusing to pause the case.

What this practically means

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Executive summary

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This is a ruling of the Court of Appeal at Nairobi on an application by Mota-Engil Engenharia E Construcao Africa under Rule 5(2)(b) of the Court of Appeal Rules, seeking a stay of an ELRC order requiring it to deposit the equivalent of the respondent's 12 months' gross salary as security, and a stay of further proceedings before the ELRC. The underlying dispute is Terry Kau's claim for unfair, unlawful and constructive dismissal. The ELRC, in a ruling of 31st October 2025, ordered the security deposit but declined to restrain the applicant from moving its operations outside Kenya. Applying the twin test, the Court found the intended appeal arguable - the applicant's contentions on the inapplicability of Civil Procedure Rules to the ELRC and misdirection in the grant of security were not frivolous - but held that the nugatory limb failed because no material substantiated the claimed cash flow burden and the deposit, being into court, would be retrievable if the suit failed. On stay of proceedings, the Court reiterated that such an order is a grave judicial action impinging on access to justice and fair trial rights, and found no exceptional circumstances. The application was dismissed with costs to the respondent. The decision below was not disturbed; this ruling concerns only interim relief pending appeal.

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
  2. 2.Whether the appeal would be rendered nugatory if the order for security is not stayed
  3. 3.Whether exceptional circumstances exist to justify a stay of further proceedings before the ELRC

Key legal issues

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01

Whether the intended appeal is arguable under Rule 5(2)(b)

Holding

The intended appeal is arguable, since arguability does not require certainty of success but only that the appeal is not frivolous and should be argued fully.

Reasoning

The applicant contended that the ELRC Judge erred in importing Civil Procedure Rules which do not apply to the ELRC and wrongly exercised discretion in granting security. Applying the established test, the Court found these contentions raised issues fit for full argument, holding that an arguable appeal need not necessarily succeed.

p. 2
02

Whether the appeal would be rendered nugatory if the security order is not stayed

Holding

The nugatory limb failed; no material substantiated the claimed cash flow burden, and the deposit into court is retrievable if the respondent's suit fails.

Reasoning

The applicant asserted the deposit of 12 months' salary was a significant cash flow burden but placed no material before the Court to substantiate the claim. Since the money would be deposited into court, retrieval upon success in the appeal or the suit would pose no difficulty, so the appeal would not be rendered nugatory.

p. 2
03

Whether stay of further proceedings before the ELRC should be granted

Holding

Stay of proceedings was refused because no exceptional circumstances were demonstrated.

Reasoning

Relying on Waithaka, the Court reiterated that stay of proceedings interferes with the right to conduct litigation, access to justice, and a fair trial. The applicant showed no exceptional circumstances; indeed, a fast-tracked hearing of the ELRC suit was in the applicant's own interest.

p. 2

Legal principles established

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  • An applicant under Rule 5(2)(b) must demonstrate that the intended appeal is arguable and that, if the application is declined and the appeal ultimately succeeds, it will have been rendered nugatory.
  • Stay of proceedings is a grave judicial action that interferes with a party's right to conduct litigation and impinges on the right of access to justice; it is granted only in exceptional circumstances.

Court orders

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  1. 1.The application dated 21st November 2025 is dismissed
  2. 2.Costs of the application to the respondent

The bench

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

majority
majority
majority
On appeal from
Employment and Labour Relations Court at Nairobi
Not stated
Jurisdiction invoked
Rule 5(2)(b) of the Court of Appeal Rules

Relief refused

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Stay and/or suspension of the ELRC order requiring the applicant to deposit the equivalent of 12 months' gross salary as security

The applicant failed to demonstrate that the appeal would be rendered nugatory; the deposit is into court and retrievable if the suit fails

p. 2

Stay of further proceedings before the ELRC

No exceptional circumstances demonstrated; stay of proceedings interferes with access to justice and the right to a fair trial

p. 2

Costs

The application dated 21st November 2025 is dismissed with costs to the respondent.

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.

The applicant is required to demonstrate that the intended appeal is arguable and that should the application be declined and the appeal ultimately succeeds, it will have been success in vain.
p. 2Rule 5(2)(b) twin test
an arguable appeal is not one which must necessarily succeed, but one which ought to be argued fully before the court, one which is not frivolous
p. 2Definition of an arguable appeal
The application dated 21st November 2025 accordingly fails and is hereby dismissed with costs to the respondent.
p. 2Disposition

Issues in the judgment

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minor

The case number of the application before the Court of Appeal is not stated anywhere in the ruling, despite the application being dated 21st November 2025.

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, "Mota-Engil Engenharia Construcao Africa v Karu (Civil Application E699 of 2025) [2026] KECA 1262 (KLR)", Case Analysis (2026). Civil Application No. NAI. Not stated in the ruling (application dated 21st November 2025). Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2026/1262/eng@2026-07-03

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