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ELRCDismissedNotice of motion dated 23rd March 2023 (ELRC suit filed 11th April 2021)· [2023] KEELRC 2979 (KLR)

Gichiki v Claxosmithline Pharmaceutical Kenya Ltd (Employment and Labour Relations Cause E228 of 2021) [2023] KEELRC 2979 (KLR)

Employment and Labour Relations Court
16 November 2023
AMANNA NGIBUINI MWAURE
1,700 words in judgment
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The bottom line

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Kenya's Employment Court refused a Kshs 300 million security-for-costs demand, ruling such orders must not stifle genuine employment claims or block access to justice.

What this practically means

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Executive summary

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The claimant, a former or current employee, brought a notice of motion dated 23rd March 2023 seeking an order that the respondent furnish security for costs of kshs 300,000,000, or such sum as the court deemed fair, to be deposited into a joint interest-earning account of the parties' advocates. She alleged the respondent was about to wind up its Kenyan operations, hand over to agents and lay off staff by May 2023, leaving her without compensation in her employment suit filed in 2021 claiming general damages, loss of expected earnings for 28 years and three months' salary in lieu of notice. The respondent opposed via grounds of opposition, arguing the application was incompetent as security for costs under Order 26 rule 1 is sought by a defendant or third party, not a claimant; that no liquidated claim existed; and that a similar injunction application in HCCC 068/2023 had not been disclosed. The court found the application unmerited. Order 26 rule 1 permits security to be given for a defendant, not by a claimant, and Order 40 applies to property disputes threatened with dissipation, not employment claims for generalized damages. The sole evidence of winding-up was a newspaper cutting, insufficient, and in earlier proceedings (ELRC 023/2023) the Deputy Registrar of companies had sworn the company was not winding up. The court, applying Westmond Holdings (Supreme Court), held such an order must be just, reasonable and not oppressive, and dismissed the application with costs to the respondent, urging the parties to set the main suit down for hearing.

Key legal issues

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01

Whether security for costs of kshs 300 million can be ordered against a respondent in an unheard employment suit for generalized damages

Holding

No. The suit contained no liquidated claim, the outcome was undetermined, and there was no sufficient evidence the respondent was winding up or leaving Kenya; ordering such security would be presumptuous.

Reasoning

Order 26 rule 1 permits security for costs of a defendant or third party, not by a claimant; Order 40 applies where property in dispute is being disposed of to defeat execution, which is not this case. The claimant relied on a newspaper cutting, insufficient to prove winding-up. An earlier ruling (ELRC 023/2023) had already found no evidence of winding-up on affidavit from the Deputy Registrar of companies. The court noted the claimant was delaying the main suit with numerous applications instead of setting it down for hearing.

p. 3

Legal principles established

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  • An order for security for costs must be just, reasonable and modest, and must not impede access to justice or stifle genuine claims

Court orders

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  1. 1.The application dated 23rd March 2023 is found unmerited and is dismissed
  2. 2.The claimant will pay costs of the application
  3. 3.Orders accordingly

Authorities

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Legislation

  • Civil Procedure RulesOrder 1A, 3 and 3(a)
  • Civil Procedure RulesOrder 40 rules 1, 2 and 3
  • Civil Procedure RulesOrder 26 rule 1
  • Civil Procedure RulesOrder 63
  • Civil Procedure RulesOrder 20 rule 2
  • Civil Procedure RulesOrder 21 Rule 1
  • Civil Procedure ActSection 63
  • Civil Procedure ActSection 1B
  • Constitution of KenyaArticle 159(2)(d)
  • Constitution of KenyaArticle 48

Cases cited (1)

  • Westmond Holdings SDN Limited vs Central Bank of Kenya & Others
    Petition No 16 of 2021
Jurisdiction invoked
Order 1A, 3 and 3(a), Order 40 rule 1, 2 and Order 63 of the Civil Procedure Rules; Section 63 of the Civil Procedure Act

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, "Gichiki v Claxosmithline Pharmaceutical Kenya Ltd (Employment and Labour Relations Cause E228 of 2021) [2023] KEELRC 2979 (KLR)", Case Analysis (2023). Notice of motion dated 23rd March 2023 (ELRC suit filed 11th April 2021). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2023/2979/eng@2023-11-16

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