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ELRCDismissedApplication dated 19th March 2014 (arising from Ruling of 25th November 2013)· [2014] KEELRC 977 (KLR)

Bhupendra Somchand Shah & 3 others v Master Bakers (1987) Limited [2014] KEELRC 977 (KLR)

Employment and Labour Relations Court
9 May 2014
1,496 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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Kenya's Employment Court dismissed directors' emergency stay application because they hid a similar pending appeal application, penalising them with costs.

What this practically means

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Executive summary

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By a ruling delivered on 25th November 2013, the court lifted the corporate veil of the Respondent Company and imposed personal liability on its three directors, Bhupendra Somchand Shah, Cornelius Muthuri and Sanju Lalchand Shah, in a claim brought by the Claimant. The directors filed a Notice of Appeal, and on 21st February 2014 warrants of attachment and sale issued. The auctioneer, Jovan H. Kariuki, proclaimed the property, obtained police assistance pursuant to a court order of 14th March 2014, and on 17th March 2014 broke the padlock at the first applicant's Gigiri residence after being denied access. In meetings involving the applicants' own counsel, the parties agreed on payment terms, and the auctioneer's charges of Kshs. 230,000 were settled by cash and four post-dated cheques. On 19th March 2014 the applicants moved to court seeking stay of execution, stoppage of the cheques, and refund of the auctioneer's fees, alleging duress, and obtained interim orders from the Duty Judge without disclosing that a similar stay application was pending before the Court of Appeal. The court found the non-disclosure, by both the applicants and their counsel, to be a serious abuse of the court process and held that, since the appellate court remained fully seized of the stay application, the trial court was functus officio. The application dated 19th March 2014 was dismissed with costs to the Claimant.

Key legal issues

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01

Whether the trial court retained jurisdiction to grant stay of execution where a similar application was pending before the Court of Appeal

Holding

The court held it was functus officio and declined to determine the application on its merits

Reasoning

The court found that the applicants had a similar stay application pending and alive before the Court of Appeal when they obtained interim orders from the Duty Judge. Since the appellate court was fully seized of the matter, the trial court considered itself functus officio and saw no need to render itself further on the application, dismissing it outright.

p. 3
02

Whether counsel's non-disclosure of the pending Court of Appeal application amounted to abuse of process

Holding

Yes; the failure to disclose misled the court into issuing orders it had no mandate to make

Reasoning

Counsel for the applicants appeared before the Duty Judge on 19th March 2014 and obtained interim stay orders without disclosing that an identical application was pending before the Court of Appeal. The omission was only revealed through the Claimant's replying affidavit. Counsel filed no affidavit explaining the omission, and the court characterised the conduct as a serious abuse of the court's process.

p. 3

Legal principles established

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  • Order 42 Rule 6 of the Civil Procedure Rules gives an appellant the option to apply for stay either in the court appealed from or the appellate court, but the court must be told of parallel applications
  • Non-disclosure of a similar pending application before the Court of Appeal when seeking interim stay orders is a serious abuse of the court process

Court orders

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  1. 1.The Applicants' application dated 19th March 2014 is dismissed
  2. 2.Costs of the application awarded to the Claimant

Authorities

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Legislation

  • Civil Procedure Rules, 2010Order 42 Rule 6
  • Civil Procedure Rules, 2010Order 22 Rule 35
On appeal from
Court of Appeal
null
Jurisdiction invoked
Order 42 Rule 6 of the Civil Procedure Rules, 2010 (stay of execution; the court declined jurisdiction as functus officio given the pending appeal)

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, "Bhupendra Somchand Shah & 3 others v Master Bakers (1987) Limited [2014] KEELRC 977 (KLR)", Case Analysis (2014). Application dated 19th March 2014 (arising from Ruling of 25th November 2013). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2014/977/eng@2014-05-09

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