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ELRCAllowedELRC Appeal No. 8 of 2018· [2021] KEELRC 1594 (KLR)

John Nyauma Ombati v Sotik Tea Co. Ltd [2021] KEELRC 1594 (KLR)

Employment and Labour Relations Court of Kenya
27 May 2021
HWHellen Wasilwa
2,230 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~9 min to read original · ~4 min brief

The bottom line

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A Kenyan court confirmed that money deposited as security isn't payment, so workers can still execute decrees for unpaid balances plus interest.

What this practically means

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Executive summary

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The appellant, a former employee of the respondent, obtained judgment on 27th April 2005 in Keroka SRMCC 49 of 2004 for general damages of Kshs. 60,000 and special damages of Kshs. 2,500, plus costs and interest, for injuries sustained at the respondent's workplace. The respondent pursued a series of unsuccessful stay applications, and on a fourth application was granted stay conditional on depositing Kshs. 87,000 in a joint interest-earning account, which was done in August 2006. The respondent failed to prosecute its appeal (Kisii HCCA No. 132 of 2006), which was dismissed. Upon release of the security, the appellant received Kshs. 97,895.70. A decree extracted on 9th March 2011 showed Kshs. 159,390 due, leaving a balance of about Kshs. 61,495. The appellant's execution attempts were resisted; warrants were set aside on the ground that no notice to show cause had been issued under Order 22 rule 18, and the magistrate later dismissed the appellant's application dated 2nd April 2013, holding that the appellant sought unexplained costs and interest. Appealing, the appellant argued that security is not payment and that interest continued to accrue. The court, determining whether the deposited security settled the claim, held it did not: the 2011 decree remained partly unexecuted, and the delay was attributable to the respondent's numerous applications. The appeal was allowed, the appellant permitted to execute for the unpaid balance, the magistrate's ruling set aside, and costs of the appeal and the lower court awarded to the appellant.

Key legal issues

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01

Whether the security deposited in a joint interest-earning account satisfied the decree in full

Holding

No. The deposit was security, not payment; the decree extracted on 9 March 2011 remained partly unsatisfied and the appellant was entitled to execute for the balance.

Reasoning

The court relied on Order 22 of the Civil Procedure Rules, which governs modes of paying money under a decree and payment out to the decree-holder. Money deposited as security and later released was released only as part of the claim. The 2011 decree, drawn and approved by the court, showed a balance outstanding. The delay in execution was attributable to the respondent's successive stay applications and its unprosecuted appeal.

p. 4
02

Whether the trial magistrate erred in dismissing the appellant's application dated 2nd April 2013 seeking a notice to show cause

Holding

Yes. Having set aside the warrants of attachment on the ground that no notice to show cause had been issued under Order 22 rule 18, the magistrate ought to have allowed the appellant to issue such notice rather than dismiss the application.

Reasoning

The appellant argued, and the court accepted, that since the warrants were set aside purely for procedural non-compliance (no notice to show cause taken out as required by Order 22 rule 18 of the Civil Procedure Rules, 2010), the correct course was to permit the appellant to regularise the process, not to decline the application. The decree had not been faulted by the respondent.

p. 3

Legal principles established

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  • A deposit of money into court as security is not payment of a decretal sum and does not satisfy the decree in full; interest continues to accrue until full satisfaction

Court orders

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  1. 1.The appeal is allowed and the appellant permitted to proceed and execute the decree and recover what remains unpaid
  2. 2.The orders of the trial magistrate dated 1st February 2014 are set aside
  3. 3.Costs of the appeal and of the lower court to be borne by the respondent

Authorities

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Legislation

  • Civil Procedure Rules, 2010Order 22 Rule 1
  • Civil Procedure Rules, 2010Order 22 Rule 2
  • Civil Procedure Rules, 2010Order 22 Rule 18

Cases cited (1)

  • Rubo Kipngetich Cheruiyot –versus- Peter Kiprop Rotich
    [2006] eKLR
On appeal from
Principal Magistrate's Court (Keroka)
SRMCC 49 of 2004
Jurisdiction invoked
Appellate jurisdiction of the Employment and Labour Relations Court over appeals from the trial magistrate in an employment-related personal injury suit

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, "John Nyauma Ombati v Sotik Tea Co. Ltd [2021] KEELRC 1594 (KLR)", Case Analysis (2021). ELRC Appeal No. 8 of 2018. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2021/1594/eng@2021-05-27

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