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ELRCPartially AllowedNot stated in the judgment text (application dated 14th June, 2021; related appeal from Mavoko CMEL No. 1 of 2019)

Edmor Steel Millers Limited v Abel Shikanda Mutsoli [2021] KEELRC 15 (KLR)

Employment and Labour Relations Court
20 December 2021
899 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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A Kenyan employer won only a conditional pause on paying a Ksh.427,045 judgment, because it never showed it would suffer substantial loss if the money were paid out.

What this practically means

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Executive summary

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This is a ruling of the Employment and Labour Relations Court at Nairobi (M. Mbaru, J) on an application dated 14th June, 2021 seeking stay of execution of the judgment delivered on 15th April, 2021 in Mavoko CMEL No. 1 of 2019, in which the respondent was awarded Ksh.427,045 against the appellant employer. The application, supported by affidavits of Laban Waigwa, the appellant's human resource manager, was brought under Order 42 Rule 6 and Order 51 Rule 1 of the Civil Procedure Rules, on grounds that the appellant intended to appeal, that proclamation and warrants of attachment had issued, and that the appellant was willing to deposit security. The respondent, through Lemmy Regau Nyawade, opposed the application, relying on James Wangalwa & another v Agnes Naliaka Cheseto [2012] eKLR, arguing that the appellant had not demonstrated substantial loss or arguable grounds and had not complied with Order 42. The court framed a single issue: whether stay of execution should be allowed pending the hearing of the appeal. It applied the three Order 42 Rule 6 conditions and, following Wangalwa, found that execution by itself does not amount to substantial loss, and that the appellant had not demonstrated the substantial loss it would suffer. Nevertheless, in the interests of justice, and because the appeal had clear grounds, the court granted a conditional stay: the decretal sum of Ksh.427,045 to be deposited in a joint interest-earning account of both parties' advocates within 30 days, failing which the stay lapses; if the respondent does not cooperate, the appellant to deposit the sum in court on the 31st day. Delivered on 20th December, 2021.

Questions the Court framed

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The issues the Court set itself to decide, in its own words.

  1. 1.Whether stay of execution should be allowed pending the hearing of the appeal

Key legal issues

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01

Whether stay of execution should be granted pending the hearing of the appeal

Holding

Conditional stay of execution granted, conditioned on deposit of the decretal sum in a joint interest-earning account of the parties' advocates within 30 days.

Reasoning

The court applied the Order 42 Rule 6 criteria. Following James Wangalwa & another v Agnes Naliaka Cheseto, mere initiation or likelihood of execution does not amount to substantial loss, and the appellant failed to demonstrate what substantial loss would be incurred. However, in the interests of justice, the appeal with clear grounds should be heard first, and a conditional stay would secure the subject judgment pending appeal.

p. 2

Legal principles established

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  • An applicant under Order 42 Rule 6 seeking stay of execution must demonstrate substantial loss, file the application without unreasonable delay, and offer security as the court orders.

Court orders

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  1. 1.Application dated 14th June, 2021 allowed on condition that the decretal sum of Ksh.427,045 is paid into a joint interest-earning account held by the advocates of both parties within the next 30 calendar days, failing which the stay lapses
  2. 2.In the event the respondent does not cooperate, the appellant shall deposit the same sum in court on the 31st day from the date of the order

The bench

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One judgment of the whole court — no separate or dissenting opinions.

majority

Wrote the judgment

On appeal from
Principal Magistrates' Court, Mavoko
Mavoko CMEL No. 1 of 2019
Jurisdiction invoked
Order 42 Rule 6 and Order 51 Rule 1 of the Civil Procedure Rules (stay of execution pending appeal)

Relief refused

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Unconditional stay of execution pending appeal

The appellant did not demonstrate substantial loss; the court instead granted conditional stay to secure the decree.

p. 2

Costs

No costs order stated in the judgment.

Quotable passages

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Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.

Accordingly, application dated 14th June, 2021 is hereby allowed on condition that the decretal sum of Ksh.427,045 is paid into a joint interest earning account held by the advocates of both parties and within the next 30 calendar days and after which the order of stay shall lapse if there is no compliance.
p. 2Final orders - conditional stay of execution
the issue of substantial loss is the cornerstone of both jurisdictions. Substantial loss is what has to be prevented by preserving the status quo because such loss would render the appeal nugatory.
p. 2Substantial loss as the cornerstone of stay applications (as adopted from James Wangalwa v Cheseto)
It is however in the interests of justice that the appeal which has clear grounds be heard first of the merits and to secure the subject judgement, conditional stay of execution shall issue.
p. 2Interests of justice justifying conditional stay

Issues in the judgment

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minor

The decretal sum is inconsistently stated as Ksh.427,050 at the start of the judgment and Ksh.427,045 in the affidavit recital and the final orders.

minor

The judgment date is stated as 15th June, 2021 in one passage and 15th April, 2021 elsewhere, though 15th April 2021 is the date consistently used for the delivered judgment.

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, "Edmor Steel Millers Limited v Abel Shikanda Mutsoli [2021] KEELRC 15 (KLR)", Case Analysis (2021). Not stated in the judgment text (application dated 14th June, 2021; related appeal from Mavoko CMEL No. 1 of 2019). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2021/15/eng@2021-12-20

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