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ELRCPartially AllowedNot stated in the judgment· [2019] KEELRC 1386 (KLR)

Peter Kilatya v Bamburi Cement Limited [2019] KEELRC 1386 (KLR)

Employment and Labour Relations Court
13 June 2019
JRJames Rika
339 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 confirmed that interest on employment awards is simple interest unless a judgment expressly states otherwise.

What this practically means

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Executive summary

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This ruling of the Employment and Labour Relations Court at Mombasa, delivered by James Rika, Judge, on 13th June 2019, resolved a dispute over the computation of interest following the Court's judgment of 28th June 2017. The underlying dispute originated at the High Court Mombasa in 2004, was transferred to the E&LRC Mombasa in 2014, and resulted in an award of a principal sum of Kshs. 99,943 with interest at 14% per annum from 21st April 1998. The parties, rather than implementing the judgment, disagreed on whether the interest was simple or compound. The Claimant filed an application on 21st March 2018 seeking review of the judgment to clarify the rate. The Court held that interest in E&LRC judgments is, by tradition, simple interest unless the judgment expressly states otherwise. It computed simple interest at Kshs. 13,992 per year from 21st April 1998 and explained that compound interest, where interest earns further interest, belongs to banking and commercial transactions underpinned by usurious contracts, whereas the employer-employee relationship is special and not based on usury or greed. The Court criticised the application as unnecessary and a reopening of a closed file, urging parties to assist the Judiciary in concluding old disputes expeditiously. The Court ordered that the judgment be satisfied based on simple interest. No costs order was recorded. The decision reinforces the default rule that judgments of the E&LRC carry simple interest absent express provision, and discourages applications that reopen determined matters.

Key legal issues

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01

Whether interest awarded on the judgment sum was simple or compound

Holding

The interest granted was simple interest; compound interest does not apply to the employment relationship.

Reasoning

The Court explained that simple interest on the principal of Kshs. 99,943 at 14% per annum yields Kshs. 13,992 each year without accumulation. Compound interest, where interest earns further interest, belongs to bank rates and commercial transactions founded on usurious contracts. The employment relationship is special and not based on usury, so simple interest applies absent express wording to the contrary.

p. 2

Legal principles established

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  • Interest awarded in E&LRC judgments is simple interest unless the judgment expressly states otherwise

Court orders

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  1. 1.Judgment shall be satisfied based on simple interest rate
  2. 2.Interest on the principal sum of Kshs. 99,943 at 14% per annum from 21st April 1998, computed annually at Kshs. 13,992 per year
Jurisdiction invoked
Review jurisdiction over the Court's own judgment of 28th June 2017 (originating at the High Court Mombasa in 2004, transferred to the E&LRC Mombasa in 2014); specific provision not stated

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, "Peter Kilatya v Bamburi Cement Limited [2019] KEELRC 1386 (KLR)", Case Analysis (2019). Not stated in the judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2019/1386/eng@2019-06-13

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