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ELRCAllowedNot stated in the judgment provided· [2023] KEELRC 1812 (KLR)

Nyolo v Kenya Railways Corporation & another (Cause 50 of 2019) [2023] KEELRC 1812 (KLR)

Employment and Labour Relations Court
27 July 2023
CBC. N. Baari
1,778 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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Kenya Railways and the Attorney General must pay a former Rift Valley Railways worker his awarded dues after the company's liquidation.

What this practically means

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Executive summary

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The Claimant, a former employee of the now-defunct Rift Valley Railways (RVR), obtained a judgment on May 23, 2014 in Nakuru ELRC Cause No 161 of 2013 awarding him Kshs 1,093,029.34 with interest, against RVR. RVR's appeal was dismissed for non-attendance on November 1, 2017. RVR was liquidated and its concession taken over by Kenya Railways Corporation (the 1st Respondent), which denied liability for RVR's employment-related debts under clauses D2 and M9 of the concession agreement, which placed employee liabilities on the concessionaire. The 2nd Respondent, the Attorney General, did not defend the suit. The court framed a single issue: whether the Respondents were bound to settle the decretal sum with interest and costs. Holding that there can be no wrong without a remedy, the court found that the decree was never stayed and was a subsisting liability during the life of the concession agreement. The court noted that the 1st Respondent produced no evidence of notice to creditors or publication of the agreement before its termination in July 2017, and that the Attorney General's participation would have assisted in placing liability where the parties' design had displaced it from RVR's successor. The court found the 1st and 2nd Respondents jointly and severally liable to settle the decree in Nakuru Industrial Cause No 161 of 2013, and ordered them to jointly and severally bear the costs of the suit. Judgment was delivered at Kisumu on July 27, 2023 by C. N. Baari, J.

Key legal issues

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Whether Kenya Railways Corporation and the Government (through the Attorney General) are liable to settle the decree awarded against the defunct Rift Valley Railways

Holding

The 1st and 2nd Respondents are jointly and severally liable to settle the decree with accruing interest and costs.

Reasoning

The decree was never stayed during the appeal, so it was a liability during the life of the concession agreement. The concession agreement clauses relied on by the 1st Respondent did not displace the decree-holder's right to a remedy. The 1st Respondent gave no evidence of notice to creditors or publication of the agreement before termination. The Attorney General failed to defend the suit on behalf of the Government despite being central to the dissolution of RVR as a public entity, making joint liability appropriate.

p. 4

Legal principles established

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  • A decree-holder must have someone answerable for the decree; where a public entity is dissolved and liability was displaced from its successor without providing how debts should lie, the Government through the Attorney General must answer.
  • A liability subsisting under a subsisting concession agreement remains payable despite the later termination of the agreement, absent a stay of the judgment.
  • Failure to notify creditors of termination of a concession agreement, and non-publication of the agreement for affected persons, prevents the successor from escaping liability for the defunct entity's debts.

Court orders

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  1. 1.Declaration that the 1st and 2nd Respondents are jointly and severally liable to settle the decree in Nakuru Industrial Cause No 161 of 2013
  2. 2.The Respondents to jointly and severally bear the costs of the suit

Authorities

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Cases cited (2)

  • Geoffrey M Asanyo & 3 Others v. Attorney General
    (2020) eKLR
  • Rift Valley Railways Workers Union Vs Rift Valley Railways K Limited
    (2018) eKLR
Jurisdiction invoked
Original employment and labour relations jurisdiction of the Employment and Labour Relations Court (the claim is a declaratory suit to enforce a decree from Nakuru ELRC Cause No 161 of 2013)

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, "Nyolo v Kenya Railways Corporation & another (Cause 50 of 2019) [2023] KEELRC 1812 (KLR)", Case Analysis (2023). Not stated in the judgment provided. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2023/1812/eng@2023-07-27

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