Wijenje v Directline Assurance Company Limited & 6 others (Employment and Labour Relations Cause 165 of 2020) [2023] KEELRC 800 (KLR)
The bottom line
#Kenya's Employment Court confirmed that a company's majority shareholders, per current Registrar of Companies records, control who represents it in litigation.
What this practically means
#Executive summary
#Key legal issues
#Who is entitled to instruct advocates for the 1st respondent company amid a shareholding dispute
The court relied on the current Registrar of Companies returns showing the majority shareholders (90.336%) who had appointed Gakoi Maina & Company Advocates; it is the majority shareholders who can appoint advocates for the company
The court noted that the 1st respondent is a limited liability company whose current returns at the Company Registry show the majority shareholders. Although the shareholding and the arbitral award underpinning it are challenged in pending High Court suits, no interim orders staying the award or the arbitrator's appointment were in place. Following the rule in Asia Pharmaceutical, the majority shareholders have power to appoint advocates, so the Notice of Change of Advocates was proper.
Whether the application challenging the change of advocates was competent
The application was found without merit; the parties' competing claims about authority to represent the company could not displace the Registrar's returns
The court observed that the dispute over directors and shareholders was already before the High Court in several pending suits, and it would not be prudent for the ELRC to resolve the shareholding dispute. With the claimant having withdrawn her claim and the consent on record, the application served no purpose and was dismissed.
Whether the claimant's withdrawal and the consent of 24th November, 2022 should be adopted
The claimant's Notice to Withdraw was confirmed and the consent adopting settlement of the suit, with the counterclaim withdrawn, was adopted as the final order of the court
The claimant, being the right-holder of the claim, could not be stopped from withdrawing it. The consent filed on 24th November, 2022 settled the suit with the 1st respondent's counterclaim marked as withdrawn and no orders to costs; it was adopted as the court's final order and the suit marked as settled.
Legal principles established
#- A party before the ELRC has the right of choice as to legal representation, and a juristic person may be represented by an advocate, director or authorised employee
- It is the majority shareholders of a company who have the power to appoint advocates for the company, per Asia Pharmaceutical v Nairobi Veterinary Centre Limited
- Where shareholding is disputed but the dispute is pending before a competent court, the court will rely on the current returns from the Registrar of Companies
- A notice of withdrawal of claim by the right-holder cannot be stopped and confirms the claim as withdrawn
Court orders
#- 1.Application dated 23rd November, 2022 found without merit and dismissed
- 2.Notice of Change of Advocates by the firm of Gakoi Maina & Company Advocates found proper
- 3.Claimant's Notice to Withdraw the claim confirmed; the claim withdrawn
- 4.Consent filed on 24th November, 2022 between the claimant and the 1st respondent adopted as the final order of the court, with the counterclaim marked as withdrawn and no orders as to costs
- 5.Suit marked as settled
- 6.Each party to bear own costs on the settled suit
- Jurisdiction invoked
- Employment and Labour Relations Court Act, 2011 (Section 22 on representation before the Court)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Wijenje v Directline Assurance Company Limited & 6 others (Employment and Labour Relations Cause 165 of 2020) [2023] KEELRC 800 (KLR)", Case Analysis (2023). ELRC Cause at Mombasa (Notice of Motion dated 23rd November, 2022). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2023/800/eng@2023-03-28
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.