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ELRCDismissedELRC Cause No. 805 of 2012· [2020] KEELRC 84 (KLR)

Leland Isandulah Salano v Intercontinental Hotel [2020] KEELRC 84 (KLR)

Employment and Labour Relations Court
11 December 2020
MOMaureen Onyango
4,795 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~19 min to read original · ~4 min brief

The bottom line

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A Kenyan court refused to make a closing hotel deposit Kshs.5 million upfront because the employee couldn't prove the company was trying to dodge a future judgment.

What this practically means

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Executive summary

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The Claimant, a former employee of InterContinental Hotels Corporation Limited (Kenya Branch), moved the Employment and Labour Relations Court by notice of motion dated 30th October 2020 seeking an order that the Respondent deposit Kshs.5 Million as security for any judgment the Court might enter in his favour. The application was anchored on media reports and a redundancy notice showing the Respondent was permanently closing the InterContinental Nairobi and winding up its Kenyan operations, which the Claimant argued exposed him to an unsatisfied decree. The Respondent opposed, contending that no notice to show cause had issued as required before attachment before judgment, that the Claimant lacked a bona fide case having admitted on cross-examination that his terminal dues were paid in full, that cessation of business is not synonymous with winding up, and that no evidence showed intent to remove assets or obstruct execution. The Respondent further noted its engagement in settlement negotiations with the Claimant. Justice Maureen Onyango accepted that the Respondent had started winding up its Kenyan operations but held that Order 39(1) of the Civil Procedure Rules demands proof of an intent to delay the plaintiff, avoid court process, or obstruct execution of a decree. The redundancy letter disclosed no such intent, and the settlement negotiations portrayed a respondent not seeking to escape the jurisdiction. The court distinguished Monica Imali Muliango, which involved an individual expatriate, noting the Respondent here is an internationally operating corporation. The application was dismissed with costs in the cause.

Key legal issues

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01

Whether the Respondent's closure of operations and declaration of redundancy satisfies Order 39(1) of the Civil Procedure Rules for security before judgment

Holding

It does not; there was no evidence of intent to remove assets or evade execution

Reasoning

The court accepted that the Respondent had begun winding up its Kenyan operations, but held that Order 39(1) requires proof of an act done with intent to delay the plaintiff or obstruct execution of a decree. The redundancy letter showed operational closure, not intent to defeat a decree. The Respondent had also engaged the Claimant in settlement negotiations, and being an international corporate, the Claimant could pursue enforcement abroad under the foreign judgments convention. Distinguishing Monica Imali Muliango, the Respondent here was a juristic person, not an individual about to leave the jurisdiction.

p. 7
02

Whether Monica Imali Muliango v Catherine Masaka applies

Holding

Distinguished; that case concerned an individual expatriate employee likely to leave the jurisdiction, whereas here the Respondent is an internationally operating corporation

Reasoning

The court distinguished the authority on the nature of the respondent and on conduct: unlike the individual in that case who faced an expiring UNDP contract, the corporate Respondent here engaged in settlement talks, showing no intent to escape the jurisdiction.

p. 7

Legal principles established

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  • The power to order attachment before judgment or deposit of security must not be exercised lightly and only upon clear proof that the defendant intends to dispose of or remove property from the jurisdiction with intent to obstruct or delay execution of a decree
  • Cessation of business is not synonymous with winding up, and one alleging imminent winding up must prove steps taken towards that end

Court orders

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  1. 1.The application dated 30th October 2020 seeking deposit of Kshs.5 Million as security is dismissed
  2. 2.Costs shall be in the cause

Authorities

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Legislation

  • Civil Procedure RulesOrder 39 Rule 1 (also referred to as Order 38 rule 5 in cited authorities)
  • Employment ActSection 40(1)(b)
  • Constitution of KenyaArticles 159(2)(d) and 48
  • Civil Procedure ActSection 1B
  • Convention on the Recognition and Enforcement of Foreign Judgments in Civil and Commercial Matters

Cases cited (6)

  • David W.Ndirangu v Adijah Hassan Abdalla
    [1980] eKLR
  • Stephen Gachengo v Solenta Aviation Kenya Limited
    [2018] eKLR
  • Kuria Kanyoro T/A Amigos Bar & Restaurant v Francis Kinuthia Nderu & Others
    [1985] 2 K.L.R. 126
  • John Kipkemboi Sum v Lavington/Lovington Security Guards Limited
    [1998] eKLR
  • Monica Imali Muliango v Catherine Masaka
    ELRC Cause No. 989 of 2018
  • Godfrey Oduor Odhiambo v Ukwala Supermarket Kisumti Limited
    [2016] eKLR
Jurisdiction invoked
Original employment and labour relations jurisdiction of the Employment and Labour Relations Court; motion under Order 39 of the Civil Procedure Rules

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (1)

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Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.

Cite this brief

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Cite this brief

Caselaw, "Leland Isandulah Salano v Intercontinental Hotel [2020] KEELRC 84 (KLR)", Case Analysis (2020). ELRC Cause No. 805 of 2012. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2020/84/eng@2020-12-11

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