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ELRCPartially AllowedPetition No. 8 of 2022· [2023] KEELRC 42 (KLR)

Gichana v Nyangweso Ag CEO, Chemelil Sugar Co Ltd & 7 others; Auditor General (Interested Party) (Petition 8 of 2022) [2023] KEELRC 42 (KLR)

Employment and Labour Relations Court
23 January 2023
1,674 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~7 min to read original · ~4 min brief

The bottom line

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Kenya's Employment Court ruled Chemelil Sugar's acting CEO held office unlawfully because state corporation leaders must be competitively recruited, not appointed behind closed doors.

What this practically means

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Executive summary

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Caleb Gichana petitioned the High Court challenging the 2017 appointment of Gabriel Nyangweso as acting Chief Executive Officer of Chemelil Sugar Company Ltd without a competitive process, contrary to the Mwongozo Code of Governance for State Corporations, and alleging incompetence, nepotism and dereliction of duty by the Cabinet Secretary, Agriculture, the Principal Secretary and the Inspector General of State Corporations. He sought quashing orders, declarations of unconstitutionality, surcharge of salaries, directions for competitive recruitment of a CEO and Board, disciplinary action and criminal prosecution of culpable officers. After a preliminary objection on jurisdiction based on article 162, the High Court transferred the petition to the Employment and Labour Relations Court on 27 June 2022. The respondents filed no affidavits to rebut the petitioner's factual assertions, which the court found reckless. The court found the acting CEO and retired Head of Finance in office unlawfully, contrary to articles 10 and 232 of the Constitution and the Mwongozo Code, and the Cabinet Secretary guilty of dereliction of duty for failing to constitute a Board. However, it declined to grant surcharge, disciplinary, arrest, prosecution and unfitness-for-office orders, holding that such matters fall to institutions like the EACC, Auditor General, National Police Service and DPP, and refused a blanket quashing order for want of proof and identification of the affected managers. The court declared the respondents' continued stay in office unlawful and directed the Cabinet Secretary to constitute a Board and advertise for a new CEO. Holding the petition to be in the public interest, it made no order on costs.

Key legal issues

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01

Lawfulness of the acting CEO and Head of Finance appointments

Holding

The appointments were unlawful and unconstitutional, violating articles 10 and 232 and the Mwongozo Code because they were not competitively recruited.

Reasoning

The court discerned from the affidavits, unrebutted by the respondents, that the 1st and 2nd respondents' appointments as acting CEO and Head of Finance were not done through a competitive process as contemplated by the Constitution, the Public Officers Ethics Act, the Public Service Values Act and the Mwongozo Code. The 1st respondent had acted as CEO since 2017, contrary to the Mwongozo Code and a Head of Public Service circular on renewal of contracts of chief executives of state corporations.

p. 6
02

Dereliction of duty by the Cabinet Secretary, Ministry of Agriculture

Holding

The Cabinet Secretary was guilty of dereliction of duty for failing to constitute a Board for Chemelil Sugar Company Ltd.

Reasoning

The court found, on the unrebutted material before it, that the Cabinet Secretary had failed to constitute a Board for the company, and accordingly directed her to appoint or advertise for the recruitment of a Board of Directors forthwith, and to advertise for the recruitment of a new Chief Executive Officer.

p. 7
03

Limits of judicial remedial power in public-interest petitions alleging corruption

Holding

The court declined to grant surcharge, disciplinary, arrest and prosecution orders, deferring to constitutionally mandated institutions.

Reasoning

The court held that institutions such as the National Police Service, the Auditor General, the Ethics and Anti-Corruption Commission and the Director of Public Prosecutions exist to investigate, audit and prosecute allegations of corruption or misconduct in public office; it is not the court's province to grant such orders. It also declined to make blanket orders quashing unnamed promotions.

p. 6

Legal principles established

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  • Appointments of chief executives of state corporations must be through a competitive process as contemplated by the Mwongozo Code; acting appointments in breach of it are unlawful and unconstitutional.
  • Courts should not usurp the mandates of investigative and prosecutorial bodies such as the EACC, the Auditor General, the National Police Service and the DPP over allegations of corruption or misconduct in public office.

Court orders

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  1. 1.A declaration that Gabriel Nyangweso (acting CEO) and Emmanuel Obetch Ngara (retired Head of Finance) continued stay in office in Chemelil Sugar Company Ltd is unlawful and unconstitutional for violating articles 10 and 232 of the Constitution and the Mwongozo Code, and is therefore invalid
  2. 2.An order directing the Cabinet Secretary, Ministry of Agriculture to appoint or advertise for the recruitment of the Board of Directors for Chemelil Sugar Company Ltd forthwith
  3. 3.An order directing the Cabinet Secretary, Ministry of Agriculture to cause to be advertised for the recruitment of a new Chief Executive Officer for Chemelil Sugar Company Ltd
  4. 4.No order on costs
Jurisdiction invoked
Article 162 of the Constitution (petition transferred from the High Court to the Employment and Labour Relations Court on 27 June 2022)

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, "Gichana v Nyangweso Ag CEO, Chemelil Sugar Co Ltd & 7 others; Auditor General (Interested Party) (Petition 8 of 2022) [2023] KEELRC 42 (KLR)", Case Analysis (2023). Petition No. 8 of 2022. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2023/42/eng@2023-01-23

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