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ELRCOtherCause No 198 of 2019· [2024] KEELRC 421 (KLR)

Molonket v East African Portland Cement Co Ltd (Cause 198 of 2019) [2024] KEELRC 421 (KLR)

Employment and Labour Relations Court
27 February 2024
NMNzioki Wa Makau
1,215 words in judgment
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The bottom line

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A Kenyan employment court refused to let an employer pay a Kshs. 15 million judgment in instalments because its own financial statements showed it could afford the full deposit.

What this practically means

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Executive summary

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The Respondent/Applicant moved the Court by Notice of Motion dated 19th December 2023 seeking variation of an order issued on 1st December 2023, which had granted it stay of execution of a judgment of 21st September 2023 on condition that Kshs. 15,165,782.00 be deposited in an interest-earning account in the joint names of the Advocates. The Applicant, citing cash flow problems and a reported loss of Kshs. 1.3 Billion in the last financial year, sought leave to deposit the sum in equal monthly instalments of Kshs. 2 Million. It relied on section 12(3)(vii) of the Employment and Labour Relations Act, section 3A of the Civil Procedure Act and Article 159(2) of the Constitution, and on the Freight Forwarders v Elsek test of sufficient cause. The Claimant/Respondent opposed, citing the Applicant's prior default on an instalment agreement and lack of consultation, and urged dismissal as an abuse of process. Examining the Applicant's audited accounts, the Court found income from investing activities and a net increase in cash of Kshs. 40,592,000/-, well above the decretal sum, showing the Applicant was not as badly off as claimed. The Court declined the instalment prayer and ordered the full sum secured within 7 days, failing which the stay would automatically lapse, with costs of the motion to the Applicant. It is so ordered.

Key legal issues

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Whether the Applicant satisfied the sufficient-cause test for payment of the decretal sum in instalments

Holding

The Court declined to vary the order, holding the Applicant was financially capable of securing the full decretal sum within 7 days

Reasoning

The Court examined the Applicant's audited financial statements, noting substantial income from investing activities and a net increase in cash and cash equivalents of Kshs. 40,592,000/-, well above the decretal sum. This contradicted the claim of financial hardship, so instalment payment was refused and the full deposit was ordered within 7 days, failing which the stay lapses.

p. 3

Legal principles established

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  • An applicant seeking to pay a decretal sum in instalments must show sufficient cause: inability to pay in lump sum, ability to pay by reasonable monthly instalments, and utmost good faith
  • A conditional stay lapses automatically if the condition of deposit is not met

Court orders

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  1. 1.The full sum of Kshs. 15,165,782/- must be secured in the interest-earning account within the next 7 days
  2. 2.Should the Respondent fail to make the deposit as ordered, the stay granted shall automatically lapse
  3. 3.The Respondent to meet the costs of the motion

Authorities

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Legislation

  • Employment and Labour Relations ActSection 12(3)(vii)
  • Civil Procedure ActSection 3A
  • Constitution of KenyaArticle 159(2)

Cases cited (3)

  • Freight Forwarders Ltd v Elsek & Elsek (K) Ltd
    [2012] eKLR
  • CFC Stanbic Bank Limited v John Kung'u Kiarie & Dyer & another
    [2016] eKLR
  • Karanga M'nchebere & Stephen Kamau v East African Portland Cement
    ELRC Cause No. 484 of 2012
Jurisdiction invoked
Section 12(3)(vii) of the Employment and Labour Relations Act, 2011; section 3A of the Civil Procedure Act; Article 159(2) of the Constitution of Kenya

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, "Molonket v East African Portland Cement Co Ltd (Cause 198 of 2019) [2024] KEELRC 421 (KLR)", Case Analysis (2024). Cause No 198 of 2019. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2024/421/eng@2024-02-27

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