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ELRCDismissedNairobi Employment and Labour Relations Court Case No.165 of 2020 (Application dated 24th June, 2020)· [2021] KEELRC 1430 (KLR)

Directline Assurance Company Limited & 6 others v Terry Wijenje & 5 others [2021] KEELRC 1430 (KLR)

Employment and Labour Relations Court of Kenya
29 April 2021
6,320 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 dismissed a bid to punish Directline Assurance's opponents for contempt, confirming contempt must be proven beyond reasonable doubt.

What this practically means

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Executive summary

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The applicants, led by Directline Assurance Company Limited and Samuel Kamau Macharia, sought leave under section 5 of the Judicature Act and the English Part 81 Civil Procedure Rules to commence contempt proceedings against Terry Wijenje (the claimant), the Commissioner of Insurance and other respondents. They alleged the respondents had collusively bargained to hand over management of Directline Assurance to the claimant during the pendency of her employment suit, thereby interfering with the administration of justice and destroying the subject matter of the suit. They sought declarations of contempt, a fine of Kshs.10 million against the Insurance Regulatory Authority and six months' civil jail for named respondents. The claimant opposed, arguing the impugned email was not authored by her, that the 4th applicant was an undercharged bankrupt without capacity, and that the court lacked jurisdiction over company internal affairs already before the High Court. The 2nd to 6th respondents pleaded statutory protection under section 168 of the Insurance Act and sub judice. The court framed two issues: jurisdiction and whether contempt was made out. It reaffirmed that contempt must be proved beyond reasonable doubt and must be deliberate and intentional. Reading the impugned email as concerning ordinary governance and regulatory supervision, and noting parallel High Court suits and a criminal case on shareholding and directorship, the court found no contempt and declined to enter the shareholding dispute, holding the High Court seized of those matters. It also held that under Article 162 the ELRC has inherent power to punish for contempt. The applications were dismissed with costs to abide the outcome of the claim.

Key legal issues

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01

Jurisdiction of the ELRC over the contempt application

Holding

The court has jurisdiction to punish for contempt under its Article 162 mandate, but cannot assume jurisdiction over the shareholding disputes pending before the High Court

Reasoning

The respondents challenged jurisdiction, arguing the application concerned internal company affairs and shareholding disputes already before the High Court in Civil Suits E278 and E277 of 2019. The court held its specialised mandate under Article 162 carries inherent power to punish for contempt, but declined to delve into the shareholding question, as doing so would offend the sub judice rule and encroach on the High Court's pending suits.

p. 7
02

Whether the respondents' conduct amounted to contempt

Holding

No contempt was established; the impugned email concerned governance matters within the Commissioner of Insurance's statutory mandate and did not intentionally violate the court's authority

Reasoning

The court read the 6th respondent's email as addressing board paralysis, appointments and shareholder interference, not as a collusive bargain to defeat the suit. The claimant's employment stood terminated with no interim reinstatement, and parallel suits on directorship and shareholding remain before the High Court and a criminal case. The applicants failed to prove deliberate, intentional interference beyond reasonable doubt.

p. 7
03

Standard of proof in contempt proceedings

Holding

Contempt must be proved beyond reasonable doubt, higher than the ordinary civil standard, because the proceedings are quasi-criminal and liberty is at risk

Reasoning

Relying on J G K v F W K and Katsuri Limited v Kapurchand, the court reaffirmed that although contempt proceedings are civil in nature, the applicant must prove the elements beyond reasonable doubt since penal sanctions may be imposed and the contemnor's liberty is at risk. The conduct must be deliberate, wilful and mala fide, an honest belief in non-compliance being incompatible with the requisite intent.

p. 5
04

Capacity of the 4th applicant as an undercharged bankrupt

Holding

The court declined to determine the challenge to the 4th applicant's standing on the merits, holding the claimant's suit should be heard on its merits

Reasoning

The claimant argued the 4th applicant, being an undercharged bankrupt under Gazette Notice No.7678, lacked capacity to be a director or support the application under sections 223, 228 and 230 of the Companies Act. The court noted the claimant herself defined the 4th respondent in her Memorandum of Claim and held that without going into the merits, the claim should be heard on its merits.

p. 7

Legal principles established

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  • An applicant in contempt proceedings must prove contempt beyond reasonable doubt, the proceedings being quasi-criminal
  • The Employment and Labour Relations Court, under its specialised constitutional mandate, has inherent power to punish for contempt
  • Contempt consists in unlawfully and intentionally violating the dignity, repute or authority of a judicial body or interfering with the administration of justice in a pending matter

Court orders

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  1. 1.Applications dated 24th June, 2020 and 23rd June, 2020 dismissed
  2. 2.Costs to abide the outcome of the claim
Jurisdiction invoked
Article 162(2) of the Constitution and section 12 of the Employment and Labour Relations Court Act; section 5 of the Judicature Act

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, "Directline Assurance Company Limited & 6 others v Terry Wijenje & 5 others [2021] KEELRC 1430 (KLR)", Case Analysis (2021). Nairobi Employment and Labour Relations Court Case No.165 of 2020 (Application dated 24th June, 2020). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2021/1430/eng@2021-04-29

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