Ogana v David Engineering Limited; David (K) Engineering Limited (Objector) (Cause 591 of 2019) [2023] KEELRC 2750 (KLR)
The bottom line
#A Kenyan court dismissed an employer's attempt to block payment of an unfair termination award and stopped a related company from shielding its assets.
What this practically means
#Executive summary
#Key legal issues
#Stay of execution pending appeal
Respondent failed to satisfy the conjunctive conditions of Order 42 Rule 6: no substantial loss shown, inordinate unexplained delay of 8 months, and no specific security offered
The Respondent alleged substantial loss yet simultaneously asserted the attached vehicle was not its property, undercutting the loss claim. Judgment was delivered in January 2023 but the application came only in August 2023, an inordinate delay explained only by reference to an unidentified clerk. No specific security was offered, merely a general willingness to abide by conditions.
Piercing the corporate veil in execution proceedings
Despite Salomon v Salomon, the court recognised that the corporate veil cannot be used to flee from responsibility, particularly in employment claims, given the shared directorship between Respondent and Objector
Gary Bangera, a Director of the Respondent involved in the Claimant's termination, is also a Director and Shareholder of the Objector; this assertion went uncontroverted. Both applications were filed on the same day. Relying on Miema Enterprises and the Kenya Hotels decision, the court held that multiple corporate structures cannot be used to defraud creditors or evade employee obligations.
Legal principles established
#- The conditions for stay of execution under Order 42 Rule 6 are conjunctive and must all be satisfied
- An employer cannot evade obligations to employees through multiple layers of legal or business structures
- A party will not be allowed to use the corporate veil to flee from responsibility
Court orders
#- 1.The Respondent's application dated 22nd August 2023 dismissed with costs to the Claimant
- 2.The Objector's application dated 23rd August 2023 dismissed with costs to the Claimant
- 3.The interim orders granted on 28th August 2023 vacated
- Jurisdiction invoked
- Original employment and labour jurisdiction of the Employment and Labour Relations Court; applications under Order 42 Rule 6 of the Civil Procedure Rules and objection to execution
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Ogana v David Engineering Limited; David (K) Engineering Limited (Objector) (Cause 591 of 2019) [2023] KEELRC 2750 (KLR)", Case Analysis (2023). Cause No 591 of 2019. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2023/2750/eng@2023-11-02
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.