Andrew Khaemba v Afriscan Kenya Limited [2019] KEELRC 255 (KLR)
The bottom line
#A Kenyan employment court ordered a company's directors and shareholders to appear and explain why an unpaid judgment worker still hadn't been paid.
What this practically means
#Executive summary
#Key legal issues
#Whether directors and shareholders of a judgment-debtor company can be compelled to attend court, be examined and produce books of account
Yes. Under section 20(4) and (8) of the Employment and Labour Relations Court Act, 2011, the court may require attendance, evidence and production of documents, and directors and officers of a body corporate must comply with such orders.
The court emphasised that the ELRC is not an ordinary superior court and enjoys general powers to act without undue regard to technicalities. Given that the respondent, through its majority shareholder, admitted moving proclaimed assets while aware of execution proceedings, the court invoked its statutory power to compel the shareholders and directors to attend for examination and furnish books of account to enable settlement of the decree.
Whether the corporate veil should be lifted to make Benjamin Kariamburi Mwangi personally liable for the decree
The court did not immediately lift the corporate veil; it secured the decree by directing attendance and examination, with directors and shareholders to settle the decretal sum, and preserved the properties by injunction pending that exercise.
The respondent itself acknowledged there was an unsatisfied decree and suggested examination of directors before lifting of the veil. The court found the respondent had moved proclaimed assets to an undisclosed location despite awareness of execution, and that Mwangi held majority shares and interests in the two suit properties, making it imperative to secure those interests from alienation pending the examination process.
Whether injunctions should issue to preserve the suit properties pending settlement of the decree
Yes. The court issued injunctions restraining both Land Registries from permitting further registrations, dealings or entries on the two titles, vacated if the respondent settles the decretal sum by 9th December, 2019.
Mwangi retains majority interests in the two properties. Given the real danger of alienation to the detriment of the claimant, and that the properties are encumbered (a lease to 31st May 2026 with the title deposited in Denmark, and a charge to Siraji Sacco), the court secured the interests by injunction as a temporary measure pending the attendance and examination ordered.
Legal principles established
#- Under section 20(4) of the Employment and Labour Relations Court Act, the court may require any person, including directors and officers of a body corporate, to attend, give evidence and produce relevant documents in aid of proceedings
- Where a body corporate fails to comply with an order under section 20(4), every director and officer of the body corporate shall comply with the order
- A majority shareholder who is aware of execution proceedings cannot move attachable company assets to an undisclosed location and leave the decree unsatisfied; the company through its officers, directors and shareholders must settle the decretal sum
Court orders
#- 1.The respondent shareholders and directors shall attend and furnish the court with the books of account
- 2.The respondent shareholders and directors shall attend before court on 9th December, 2019 and be available for examination by the claimant
- 3.The respondent shareholders and directors shall avail to the court any other relevant document(s) for the settlement of the decretal amount
- 4.An injunction directed at the District Registrar, Nyahururu Land Registry not to allow any further registration, dealings or entries in the register relating to Land Title Nyandarua/Olarangwai/3432
- 5.An injunction directed at the District Registrar, Ngong Land Registry not to allow any further registration, dealings or entries in the register relating to Land Title Kajiado/Olchoro-Onyore/9095
- 6.In the alternative, the respondent is at liberty to settle the decretal sum on or before 9th December, 2019, upon which the orders shall be vacated
- 7.Costs awarded to the claimant
- Jurisdiction invoked
- Article 48 of the Constitution, 2010; section 3 of the Employment and Labour Relations Court Act, 2011; Order 22 rule 35, Order 39 rules 5 and 6 of the Civil Procedure Rules; section 20 of the Employment and Labour Relations Court Act, 2011
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Andrew Khaemba v Afriscan Kenya Limited [2019] KEELRC 255 (KLR)", Case Analysis (2019). Notice of Motion dated 22nd August, 2019 (arising from Memorandum of Claim filed 5th December, 2016). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2019/255/eng@2019-11-21
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.