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ELRCDismissedNotice of Motion dated 13.10.2020 (Employment and Labour Relations Court)· [2021] KEELRC 1826 (KLR)

Alvin Otieno v Omya East Africa Limited & another [2021] KEELRC 1826 (KLR)

Employment and Labour Relations Court
22 April 2021
5,329 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~21 min to read original · ~4 min brief

The bottom line

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An employer tried to force its former employee to hand back a company-financed car, but the Employment Court refused because money could settle the dispute.

What this practically means

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Executive summary

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The Applicants, Omya Kenya Limited and Omya International AG, moved the Employment and Labour Relations Court by Notice of Motion dated 13.10.2020 seeking interlocutory and mandatory injunctions to compel the Claimant, their former Agronomist, to surrender motor vehicle KCH 056B, a Chevrolet Trailblazer financed 100% by the 2nd Applicant under a Car Loan Agreement, and to hand over the log book and execute transfer documents. They contended the car was a tool of trade returnable on termination of employment or upon payment of its amortized value. The Claimant opposed, asserting he was a consultant when the car loan was executed, that he was the sole registered owner under section 8 of the Traffic Act, that he had set off the agreed valuation against his terminal dues, and that the court lacked jurisdiction. The court framed three issues: jurisdiction, interlocutory injunction, and mandatory injunction. It held it had jurisdiction because the car dispute was connected to the employment relationship backdated to 1.1.2016 and arose alongside the unfair termination claim, applying section 12 of the ELRC Act and Paramount Bank v Vagvi Syed Qumara. On the Giella test, the court found a prima facie case since registration under the Traffic Act is rebuttable and the Claimant's alleged payment of the amortized value was unproven, but declined relief because any loss was quantifiable in money and the Applicants still held his terminal dues, meaning no irreparable harm and the balance of convenience did not favour them. The mandatory injunction was also refused, absent special circumstances. The application was dismissed with costs.

Key legal issues

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01

Jurisdiction of the ELRC over the car dispute

Holding

The court has jurisdiction because the car dispute is connected to the employment relationship backdated to 2016, and it arises alongside the unfair termination claim

Reasoning

The court noted the consultancy agreement, the financing of the car, the incorporation of the 1st applicant as subsidiary, the backdated employment from 1.1.2016, and the agreement to set off terminal dues against the car loan. Relying on Paramount Bank Ltd v Vagvi Syed Qumara, claims flowing from the employment relationship fall under section 12 of the ELRC Act. The claimant having first invoked the court's jurisdiction could not turn around to challenge it.

p. 5
02

Prima facie case for interlocutory injunction

Holding

A prima facie case was proved because the respondent was in breach of the Car Loan Agreement by retaining the car without evidence of full payment

Reasoning

Although the respondent is the registered owner under section 8 of the Traffic Act, registration is rebuttable. Relying on Jared Magwaro Bundi v Primarosa Flowers, substance prevails over form in ownership disputes. The only evidence of payment under the amortization plan were correspondences the applicants described as mere proposals, so ownership and repayment remained in dispute, establishing a prima facie case.

p. 6
03

Irreparable injury and balance of convenience

Holding

Both limbs failed; the car's value was ascertainable and terminal dues held by the applicants sufficed to settle the loan balance

Reasoning

The Car Loan Agreement allowed return of the car or payment of its value on a 5-year straight-line amortization, making loss quantifiable in damages. The applicants had not denied withholding the respondent's terminal dues of not less than Kshs. 3,000,000, which could offset the outstanding loan balance, so neither irreparable harm nor the balance of convenience favoured them.

p. 6
04

Mandatory injunction at interlocutory stage

Holding

Refused as ownership and repayment disputes could only be resolved at trial and no special circumstances existed

Reasoning

Following Lucy Wangui Gachara v Minudi Okemba Lore, mandatory injunctions at the interlocutory stage amount to summary determination of the dispute and are granted only in special circumstances or the clearest of cases. Here, ownership and the remaining car value under the amortization plan were contested, so the court declined to grant the mandatory injunction.

p. 7

Legal principles established

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  • Other claims between an employer and employee can be heard alongside an unfair termination claim if they originate from the employment relationship
  • Registration under section 8 of the Traffic Act is not conclusive of ownership; the contrary may be proved on a balance of probabilities
  • A mandatory injunction at the interlocutory stage is granted only in special circumstances or the clearest of cases

Court orders

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  1. 1.The application dated 13.10.2020 is dismissed with costs

Authorities

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Legislation

  • Constitution of KenyaArticle 162(2)(a)
  • Constitution of KenyaArticle 40
  • Employment and Labour Relations Court Actsection 12
  • Traffic Actsection 8
  • Employment Act
  • ELRC (Procedure) RulesRule 28(3)

Cases cited (16)

  • Giella v Cassman Brown & Co. Ltd
    [1973] eKLR
  • Mrao v First American Bank of Kenya Ltd & 2 Others
    (2003) KLR 125
  • Fredrick Byakika v Mutiso Menezes International Unlimited
    [2016] eKLR
  • David Odwori Namuhisa v Magnate Ventures Limited
    [2017] eKLR
  • Republic v Kenya Revenue Authority ex-parte Yaya Towers Limited
    [2008] eKLR
  • Edward Ngarega Gacheru v Nation Media Group Limited
    [2019] eKLR
  • Kenya Medical Research Institute v Davy Kiprotich Koech
    [2018] eKLR
  • Locabail International Finance Limited v Agro-Export
    (1988)
  • Jubilee Insurance Company of Kenya Limited v Joseph Ndungu Karega T/A Leather Touch Foot Care Specialists
    [2014] eKLR
  • Owners of the Motor Vessel "Lillian S" v Caltex Oil (Kenya) Ltd
    (1989) KLR 1
  • Nguruman Limited v Jan Bonde Nielsen & 2 Others
    [2014] eKLR
  • Sambai Kitur & another v Standard Chartered Bank & 2 others
    [2002] eKLR
  • Magnate Ventures Limited v David Odwori Namuhisa
    [2020] eKLR
  • Paramount Bank Ltd v Vagvi Syed Qumara & another
    [2017] eKLR
  • Jared Magwaro Bundi & another v Primarosa Flowers Limited
    [2018] eKLR
  • Lucy Wangui Gachara v Minudi Okemba Lore
    [2015] eKLR
Jurisdiction invoked
Article 162(2)(a) of the Constitution and section 12 of the Employment and Labour Relations Court 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, "Alvin Otieno v Omya East Africa Limited & another [2021] KEELRC 1826 (KLR)", Case Analysis (2021). Notice of Motion dated 13.10.2020 (Employment and Labour Relations Court). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2021/1826/eng@2021-04-22

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