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ELRCDismissedCause No 608 of 2015· [2022] KEELRC 1188 (KLR)

Katatsa v Mumias Sugar Company Limited (Cause 608 of 2015) [2022] KEELRC 1188 (KLR)

Employment and Labour Relations Court
6 July 2022
1,272 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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A Kenyan employment court ruled it cannot approve lawsuits against companies in administration; only the High Court can grant that permission under the Insolvency Act.

What this practically means

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Executive summary

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The claimant, whose employment suit against Mumias Sugar Company Limited was filed on April 15, 2015, brought a notice of motion dated September 17, 2021 seeking leave to continue the proceedings against the respondent, which had been placed under receivership in 2019. The respondent responded with a notice of preliminary objection dated November 10, 2021, contending that the Employment and Labour Relations Court lacked jurisdiction under the Insolvency Act to grant such leave, since 'the court' under the Insolvency Act means the High Court. The respondent relied on Fredrick Okoth Owino v T.S.S. Grain Millers, Nakumatt Holdings Limited v Ideal Locations Limited and Shee Hamisi Mashipa v Mare Nostrum Limited, as well as Owners of the Motor Vessel 'Lillian S' and the Supreme Court decision in Samuel Kamau Macharia. The claimant did not file submissions. Relying on section 2(1) and section 560(1) of the Insolvency Act, Maureen Onyango J agreed with the respondent: the Insolvency Act, enacted after the ELRC Act, did not extend jurisdiction to this court, and section 12 of the ELRC Act confines it to employment and labour disputes under Article 162(2) of the Constitution. The preliminary objection, treated as grounds of opposition, succeeded and the claimant's application was dismissed. No orders for costs were made in respect of the application or the preliminary objection. The ruling was delivered virtually at Nairobi on July 6, 2022.

Key legal issues

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01

Whether the ELRC may grant leave under section 560 of the Insolvency Act to continue a suit against a company under administration

Holding

It may not; jurisdiction is confined to the High Court as defined in section 2(1) of the Insolvency Act

Reasoning

Section 2(1) of the Insolvency Act defines 'the court' as the High Court or its insolvency division. Section 560(1) requires administrator's consent or the approval of that court before proceedings may begin or continue against a company under administration. Section 12 of the ELRC Act confers only employment and labour relations jurisdiction; the Insolvency Act, enacted later than the ELRC Act, did not extend jurisdiction to this court, and a court cannot expand its jurisdiction by judicial craft.

p. 3

Legal principles established

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  • The Employment and Labour Relations Court has no jurisdiction under the Insolvency Act to grant leave to continue proceedings against a company under administration; leave must be sought in the High Court

Court orders

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  1. 1.The respondent's preliminary objection (treated as grounds of opposition) succeeded
  2. 2.The claimant's notice of motion dated September 17, 2021 was dismissed
  3. 3.No orders for costs of the application or the preliminary objection

Authorities

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Legislation

  • Insolvency Actsection 2(1)
  • Insolvency Actsection 560(1)
  • Employment and Labour Relations Court Actsection 12
  • Constitution of KenyaArticle 162(2)
  • Constitution of KenyaArticle 159(2)(d)
  • Constitution of KenyaArticle 48
  • Civil Procedure RulesOrder 21 Rule 1; Order 11
  • Civil Procedure ActSection 1B

Cases cited (5)

  • Fredrick Okoth Owino v T.S.S. Grain Millers
    [2017] eKLR
  • Nakumatt Holdings Limited & another v Ideal Locations Limited
    [2019] eKLR
  • Shee Hamisi Mashipa v Mare Nostrum Limited
    [2021] eKLR
  • Owners of the Motor Vessel "Lillian S" v Caltex Oil (Kenya) Ltd
    [1989] eKLR
  • Samuel Kamau Macharia & another v Kenya Commercial Bank Limited & 2 others
    [2012] eKLR
Jurisdiction invoked
Article 162(2) of the Constitution and section 12 of the Employment and Labour Relations Court Act; the motion invoked section 560(1) of the Insolvency 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, "Katatsa v Mumias Sugar Company Limited (Cause 608 of 2015) [2022] KEELRC 1188 (KLR)", Case Analysis (2022). Cause No 608 of 2015. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2022/1188/eng@2022-07-06

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