Kenya Petroleum Oil Workers Union v Delta Petroleum Trading Company (Cause 145 of 2010) [2013] KEELRC 686 (KLR)
The bottom line
#A Kenyan union's bid to make company directors personally pay a judgment debt failed because it skipped the basic step of extracting the court decree for execution first.
What this practically means
#Executive summary
#Key legal issues
#Lifting the corporate veil for execution of a decree
The court may grant examination and production orders and lift the corporate veil only after confirming that efforts have been made to execute the decree as issued; the claimant had not extracted the decree of 9th September 2011 and so the application was premature and flawed
The court noted that the award was issued against two respondents but judgment was confirmed against the 2nd respondent only, per the decree dated 9th September 2011. The procedure for lifting the corporate veil on execution requires demonstrated efforts at execution. Since the claimant had not extracted the operative decree, the application could not be entertained, though the claimant was given leave to file an appropriate application.
Personal liability of non-directors
Examination and veil-lifting orders cannot issue against persons who are not directors of the judgment debtor company, as confirmed by the company search
The 1st respondent stated he was only a manager, not a director, and that his wife Savitri Bagwanji Parmar was also not a director nor a party to the proceedings. The company search attached to the claimant's own affidavit did not list either as directors. The court had already found the claim lay against the 2nd respondent only, and a review application remained pending.
Legal principles established
#- Before a court entertains an application to lift a corporate veil for purposes of executing a decree, it must be satisfied that there have been efforts to execute the decree as issued
Court orders
#- 1.The claimant's application dated 11th March 2013 is struck out
- 2.The claimant is allowed time to file an appropriate application or move the court as appropriate
- 3.Each party to bear their own costs
- Jurisdiction invoked
- Industrial Court Act and Labour Institutions Act; application brought under Rules 22 and 35 of the Civil Procedure Rules, Sections 1, 2 and 3 of the Civil Procedure Act and the Companies Act
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Kenya Petroleum Oil Workers Union v Delta Petroleum Trading Company (Cause 145 of 2010) [2013] KEELRC 686 (KLR)", Case Analysis (2013). Not stated in the judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2013/686/eng@2013-07-19
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.