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ELRCPartially Allowed· [2023] KEELRC 3301 (KLR)

Eldotec Consultancy Services Ltd v Otieno & another (Cause E019 of 2023) [2023] KEELRC 3301 (KLR)

Employment and Labour Relations Court
7 December 2023
MOM. Onyango
2,024 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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A Kenyan employment court ordered disputed overpaid terminal dues of over Kshs 400,000 frozen in a joint account until the full case is heard.

What this practically means

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Executive summary

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This is a ruling of the Employment and Labour Relations Court at Eldoret on a notice of motion dated August 2, 2023 in which the claimant sought preservation orders over Kshs 409,359.44 allegedly overpaid to the 1st Respondent as terminal dues following a mutual separation agreement dated May 17, 2023. The claimant asserted that through a gross miscalculation the 1st Respondent was paid Kshs 962,924.33 instead of the correct entitlement of approximately Kshs 304,084.11, and that although the 2nd Respondent (a bank) froze the account on the claimant's request, it subsequently utilised some of the overpaid funds to settle the 1st Respondent's debts. The 1st Respondent opposed the application, contending the payment was deliberate and reflected an oral agreement to enhance the release package, that the suit was an attempt to vary the terms of a consensual agreement, that the funds had already been deducted by the 2nd Respondent to clear a loan, and that the claimant had breached confidentiality and approached the court with unclean hands. The 2nd Respondent was served but did not enter appearance or respond. Framing the sole issue as whether a preservation order should issue, the court applied the Giella v Cassman Brown principles as restated in Nguruman Limited v Jan Bonde Nielsen. It found the exact status of the 1st Respondent's account could not be ascertained in the absence of the 2nd Respondent's response, and that preservation was necessary pending trial. The court allowed the application in terms of prayer (iv) only, ordering the 1st and 2nd Respondents jointly and severally to deposit Kshs 409,359.44 in a joint interest-earning account pending the hearing and determination of the suit. Costs were ordered to be in the cause.

Key legal issues

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Whether a preservation order of Kshs 409,359.44 over allegedly overpaid terminal dues should issue

Holding

Yes - the court found the application merited and preserved the sum in a joint interest-earning account pending the hearing and determination of the suit.

Reasoning

The court applied the Giella v Cassman Brown principles as restated in Nguruman Limited v Jan Bonde Nielsen. It found the applicant had raised a real risk that the overpaid sum might be utilised before trial. The 2nd Respondent, the bank, did not respond to the application despite being served, so the exact status of the 1st Respondent's account could not be ascertained. In those circumstances preservation was needed so the parties could ventilate the account's status by viva voce evidence before a final determination.

p. 5

Legal principles established

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  • Interlocutory injunction/preservation applications are governed by the Giella v Cassman Brown principles as restated in Nguruman, applied sequentially.

Court orders

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  1. 1.Pending the hearing and determination of this suit, the 1st and 2nd Respondents do and are hereby ordered to jointly and severally deposit the sum of Kshs 409,359.44 in a joint interest earning account in the name of the Claimant and the 1st and 2nd Respondents.
  2. 2.Costs shall be in the cause.

Authorities

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Cases cited (3)

  • Giella v Cassman Brown & Co Ltd
    [1973] EA
  • Nguruman Limited v Jan Bonde Nielsen & 2 others
    [2014] eKLR
  • Kenya Commercial Finance Co. Ltd v Afraha Education Society
    [2001] Vol. 1 EA 86
Jurisdiction invoked
Employment and Labour Relations Court original jurisdiction

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, "Eldotec Consultancy Services Ltd v Otieno & another (Cause E019 of 2023) [2023] KEELRC 3301 (KLR)", Case Analysis (2023). . Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2023/3301/eng@2023-12-07

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