Mwabili v Samruddha Resources (K) Limited (Cause E031 of 2023) [2023] KEELRC 2274 (KLR)

Employment and Labour Relations Court

21 September 2023

MMM. Mbarũ

1,237 words in judgment

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The bottom line

The Employment Court refused to freeze a company's assets in an unfair dismissal case because the worker gave no evidence the company planned to leave Kenya.

What this practically means

Executive summary

The claimant, who has filed a Statement of Claim against the respondent for unfair termination of employment on 17 October 2022, sought an interlocutory injunction under Order 39(5) and (6) and Order 40 of the Civil Procedure Rules restraining the respondent from removing any equipment or property from Kenya, together with an order for security to cushion a possible decree. The claimant feared the respondent would close its operations and relocate, frustrating any judgment. The respondent, through its site engineer and manager Parag Pawar, denied any intention to remove assets, averring it is incorporated in Kenya and operates at Kishushe, Voi, and characterising the claim as speculative and unliquidated. Both parties filed submissions: the claimant relied on Giella v Cassman Brown and Section 12(3)(i) of the Employment and Labour Relations Court Act, citing Monica Imali Mulyango v Catherine Masaka in support of the security order; the respondent relied on Pius Kipchirchir Kogo v Frank Kimeli Tena and International Air Transport Association v Akarim Agencies to argue absence of a prima facie case, no irreparable harm, and no demonstrated need for security. The court held that Order 39 rule 5 targets respondents about to dispose of or remove property to obstruct execution of a decree, and found the claimant had made no effort to demonstrate the alleged intention to close operations or relocate. Balancing the parties' rights, the court declined the injunctive and security orders but directed that the main claim be heard on the merits and on a priority basis. Each party was ordered to bear its own costs. Delivered at Mombasa on 21 September 2023 by M. Mbarũ, Judge.

Key legal issues

Whether the claimant established a prima facie case justifying an injunction and order for security under Order 39 rule 5

Holding

The application failed; no prima facie case or demonstrated intention to remove assets was shown

Reasoning

The court applied the Giella v Cassman Brown principles as incorporated into Order 39 rule 5 applications. The claimant alleged the respondent intended to close operations at Kishushe, Voi and relocate, but produced no evidence of such intention or of any conduct directed at it. The respondent, a Kenyan-incorporated company, averred it had no intention of moving assets to India. In the absence of demonstrated basis for the orders, the court declined to grant them and instead secured the claimant's access to justice by directing a priority hearing of the main claim.

p. 3

Whether an order for security for satisfaction of a decree should issue

Holding

Security not ordered; the claimant had no liquidated claim and no demonstration of necessity

Reasoning

Order 39 rule 5 permits the court to call on a respondent to show cause why it should not give security where it is about to dispose of or remove property to obstruct execution of a decree. The respondent asserted it was registered and operating in Kenya with no intention of relocating. The court found the claimant had not shown why a deposit of security was necessary, and the respondent asserted the claim was speculative and unliquidated. The relief was therefore refused, with the main claim to be heard expeditiously as the practical safeguard.

p. 2

Legal principles established

Order 39 rule 5 governs security where a respondent is about to dispose of or remove property from the court's jurisdiction, and requires establishment of a prima facie case
Where an applicant fails to establish grounds for interlocutory relief, the court may balance the parties' rights by according the claim a priority hearing on the merits

Court orders

1.Orders sought shall not issue as pleaded
2.The main claim shall be heard on the merits and on priority basis
3.Hearing directions shall issue upon delivery of the ruling
4.Each party to bear own costs

Authorities

Legislation

Civil Procedure RulesOrder 39(5) and (6)
Civil Procedure RulesOrder 40
Employment and Labour Relations Court ActSection 12(3)(i)

Cases cited (4)

Giella v Cassman Brown & Co. Limited
[1973] E.A.
Monica Imali Mulyango v Catherine Masaka
Cause No. 989 of 2018
Pius Kipchirchir Kogo v Frank Kimeli Tena
[2018] eKLR
International Air Transport Association & Another v Akarim Agencies Company Limited & 2 others
[2014] eKLR

Jurisdiction invoked: Order 39(5) and (6) and Order 40 of the Civil Procedure Rules; Section 12(3)(i) of the Employment and Labour Relations Court Act

Key timeline

Practical implications

Frequently asked questions

Cite this brief

Caselaw, "Mwabili v Samruddha Resources (K) Limited (Cause E031 of 2023) [2023] KEELRC 2274 (KLR)", Case Analysis (2023). Cause No E031 of 2023. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2023/2274/eng@2023-09-21

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