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ELRCOtherMiscellaneous Application (ELRC, Mombasa)· [2019] KEELRC 1403 (KLR)

Bakery, Confectionery, Food Manufacturing & Allied Workers Union [K] v TSS Grain Millers Limited (Under Administration) [2019] KEELRC 1403 (KLR)

Employment and Labour Relations Court
14 June 2019
JRJames Rika
416 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~2 min to read original · ~4 min brief

The bottom line

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If a Kenyan company is under administration, only the High Court can give you permission to sue it - the Employment Court will simply transfer your case there.

What this practically means

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Executive summary

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The Claimant Union, a trade union, filed a Miscellaneous Application under Section 560(9)(d) of the Insolvency Act 2015 and Rule 17 of the Employment and Labour Relations Court (Procedure) Rules 2016, seeking leave to institute legal proceedings against the Respondent, a company placed under administration, in order to pursue redundancy benefits on behalf of former employees who are union members. The Respondent, through its Administrator Ponangipalli Venkata Rama Rao, filed a Replying Affidavit and a Notice of Preliminary Objection contending that an application for leave under the Insolvency Act 2015 can only be made at the High Court, relying on the E&LRC decision in Fredrick Okoth Owino v T.S.S. Grain Millers (Cause Number 833 of 2015), and urged that the application be struck out with costs. Faced with this objection, the Applicant orally requested that the application be transferred to the High Court, Commercial Division, rather than struck out. The Court noted that Insolvency Cause Number 1 of 2016 concerning the administration of the Respondent is pending before the High Court Mombasa, and endorsed the view that leave under the Insolvency Act ought to be granted at the High Court, with the Applicant free to return to the E&LRC once leave is obtained. Applying Section 3 of the Employment Act 2007 and the principle of judicial cooperation and comity, the Court held that transfer, rather than striking out, minimizes costs and serves the just, expeditious and proportionate resolution of disputes. It ordered the application dated 22nd November 2018 transferred to the Commercial Division, High Court Mombasa. No costs order was made.

Key legal issues

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01

Forum for leave applications under the Insolvency Act 2015

Holding

The E&LRC lacks jurisdiction to grant leave under the Insolvency Act 2015; such applications lie in the High Court.

Reasoning

The Court relied on the position taken by the E&LRC in Fredrick Okoth Owino v T.S.S. Grain Millers and the existence of Insolvency Cause Number 1 of 2016 before the High Court Mombasa handling the administration of the Respondent. It accepted the Administrator's preliminary objection that leave can only be granted at the High Court, but declined to strike out the application.

p. 2
02

Striking out versus transfer of a misfiled application

Holding

A misfiled application should be transferred to the competent forum rather than struck out, to minimize costs and achieve just, expeditious and proportionate resolution.

Reasoning

The Court invoked Section 3 of the Employment Act 2007, which requires facilitation of just, expeditious and proportionate dispute resolution, and the principle of judicial cooperation and comity. It reasoned that transfer minimizes costs to the parties and noted that once leave is granted by the High Court, the Applicant may return to the E&LRC.

p. 2

Legal principles established

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  • An application for leave under the Insolvency Act to sue a company in administration must be made at the High Court; once leave is granted, the applicant may return to the E&LRC.
  • Where an application is filed in the wrong forum, the court may transfer it rather than strike it out, in the interest of minimizing costs and judicial cooperation.

Court orders

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  1. 1.The Application filed on 22nd November 2018 is transferred to the Commercial Division, High Court Mombasa

Authorities

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Legislation

  • Insolvency ActSection 560(9)(d)
  • Employment and Labour Relations Court (Procedure) RulesRule 17
  • Employment ActSection 3

Cases cited (1)

  • Fredrick Okoth Owino v T.S.S. Grain Millers
    Cause Number 833 of 2015
Jurisdiction invoked
Section 560(9)(d) of the Insolvency Act 2015 and Rule 17 of the Employment and Labour Relations Court (Procedure) Rules 2016; Section 3 of the Employment Act 2007

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, "Bakery, Confectionery, Food Manufacturing & Allied Workers Union [K] v TSS Grain Millers Limited (Under Administration) [2019] KEELRC 1403 (KLR)", Case Analysis (2019). Miscellaneous Application (ELRC, Mombasa). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2019/1403/eng@2019-06-14

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