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ELRCDismissedNairobi ELRC Nos. 1100 of 2018, 1139 of 2018 (with related ELC 1130 of 2018 counterclaim intended for consolidation)· [2019] KEELRC 1158 (KLR)

Gal Arbel v Balton Cp Limited [2019] KEELRC 1158 (KLR)

Employment and Labour Relations Court
27 June 2019
HWHellen Wasilwa
2,303 words in judgment
View original judgmentRead on Kenya Law Watch case
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·~9 min to read original · ~4 min brief

The bottom line

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Kenya's Employment Court refused to freeze a former employee's bank accounts or demand millions in security because the employer couldn't prove flight risk.

What this practically means

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Executive summary

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The Respondent, a former employer, brought three applications of even date (23rd October 2018) against its former employees, Gal Arbel and Amir Grenberg among them, seeking freezing orders over their Kenyan bank accounts, alternative deposit of approximately Kshs. 27 million and allied sums into joint interest-earning accounts, orders to show cause why security should not be furnished to answer a counterclaim for losses allegedly caused by forming competing businesses, and security for costs of Kshs. 1,000,000/- with default dismissal of the claims. The Respondent argued the Claimants were foreign nationals and a flight risk with no Kenyan assets, relying on the Mareva test in DCF Engineering v Johari and the security-for-costs tests in Shah v Shah and Kinuthia Nderu. The Claimants opposed, contending the applications were unknown to the ELRC Act and Rules, omnibus and defective, aimed at denying them access to justice under Article 159(2)(a) and Article 48, and that any Kenyan judgment would be enforceable in Israel under the Foreign Judgments Enforcement Law, 1958. Justice Hellen Wasilwa held the Respondent had not established compelling reasons for the security sought, noting the Applicant failed to prove the Claimants were out of the jurisdiction, intended to abscond, or had no property in Kenya, and that such orders could impede access to justice. All applications were dismissed, with the case ordered to proceed to conclusion.

Key legal issues

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01

Whether the test for a Mareva (freezing) injunction was met

Holding

Not met; the Respondent did not establish a real risk of dissipation or removal of assets from the jurisdiction.

Reasoning

The Court examined the DCF Engineering test requiring a good arguable case, jurisdiction over the claim, assets within the jurisdiction, risk of removal or dissipation, and balance of convenience. The Respondent, despite alleging the Claimants were a flight risk with no Kenyan assets, simultaneously asserted they were directors of Kenyan competing companies. The Court found no proof of abscondment or lack of property within the jurisdiction and declined the orders.

p. 3
02

Whether security for costs should issue against foreign-national claimants

Holding

Refused; the Applicant failed to prove the Claimants were beyond the jurisdiction or without property in Kenya.

Reasoning

The Court confirmed jurisdiction under Order 26 rule 1 of the Civil Procedure Rules to order security for costs, but found the Applicant had not proved that the Claimants resided out of the jurisdiction, intended to abscond, or lacked property in Kenya. Requiring the colossal sums sought would also impede the Claimants' access to justice under Article 48 of the Constitution.

p. 4

Legal principles established

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  • A party seeking security for costs or attachment before judgment must prove the other party is out of or intends to abscond from the jurisdiction or has no property within it.
  • Security orders that require deposit of colossal sums may impede constitutionally guaranteed access to justice.

Court orders

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  1. 1.Declined to grant the freezing/attachment-before-judgment orders sought over the Claimants' bank accounts
  2. 2.Declined to order deposit of the sums sought into a joint interest-earning account
  3. 3.Declined to order the Claimants to furnish security to answer the counterclaim
  4. 4.Declined to grant security for costs
  5. 5.Ordered the case to proceed to conclusion

Authorities

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Legislation

  • Employment and Labour Relations Court ActSection 12
  • Constitution of Kenya, 2010Article 159(2)(d)
  • Constitution of Kenya, 2010Article 159(2)(a)
  • Constitution of Kenya, 2010Article 48
  • Constitution of Kenya, 2010Article 21(1) & (4)
  • Employment and Labour Relations Court (Procedure) Rules2016 Rules
  • Civil Procedure RulesOrder 26 rule 1

Cases cited (5)

  • DCF Engineering Limited v Johari Limited & Another
    (2013) eKLR
  • Shah v Shah
    (1982) KLR 95
  • Kinuthia Nderu, Helen Njeru Nderu vs Andrew Kinuthia Nderu
    (1988) 2 KAR 1287 - 1334
  • Pyaralal Mhand Bheru Rajput vs Barclays Bank and others
    Civil Case No. 38 of 2004
  • Kenya Breweries Ltd & 2 Others Vs Washington Okeyo
    (2002) eKLR
Jurisdiction invoked
Section 12 of the Employment and Labour Relations Court Act, 2007 and Article 159(2)(d) of the Constitution of Kenya, 2010

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, "Gal Arbel v Balton Cp Limited [2019] KEELRC 1158 (KLR)", Case Analysis (2019). Nairobi ELRC Nos. 1100 of 2018, 1139 of 2018 (with related ELC 1130 of 2018 counterclaim intended for consolidation). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2019/1158/eng@2019-06-27

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