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ELRCPartially AllowedMilimani ELRC Appeal (from MCELRC Cause No 2315 of 2019)· [2024] KEELRC 702 (KLR)

Watchdog Limited v Obwege & 6 others (Employment and Labour Relations Appeal E145 of 2023) [2024] KEELRC 702 (KLR)

Employment and Labour Relations Court
28 March 2024
OKOcharo Kebira
1,869 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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A Kenyan court stopped enforcement of a Kshs 4.5 million judgment against an employer, but only because it agreed to deposit half the money first.

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 Nairobi (Ocharo Kebira J) on a Notice of Motion dated 7th August 2023 by Watchdog Limited, the Appellant/Applicant, seeking stay of execution of the decree in Milimani CMEL No 2315 of 2019 (Peterson Nyabuto Obweg & 6 others v Watchdog Limited) pending appeal. Default judgment had been entered against the applicant on 22nd October 2021 for failure to enter appearance; the trial court (Hon. Ruguru, SPM) on 14th July 2023 dismissed the applicant's application to set aside the default judgment, prompting the appeal. The respondents, who had proclaimed the applicant's property on 20th July 2022 in pursuit of a decretal sum said to be about Kshs 4.5 million, opposed the application, urging that litigation must end and that any stay be conditioned on deposit of the entire decretal sum. Applying Order 42 Rule 6(2) of the Civil Procedure Rules, the court found the applicant had not demonstrated substantial loss, merely asserting the amount was colossal (per Timsales Limited v Hiram Gichohi Mwangi), but that the application was filed within a month of the impugned ruling, that security was offered, and that the respondents were amenable to a conditional stay (per Michael Ntouthi Mitheu v Kivondo Musau). The court granted a conditional stay: 50% of the decretal sum (Kshs 2,268,885.07/-) to be deposited in a joint interest-earning account within 30 days, failing which execution to issue; timelines were set for filing appeal submissions, with mention on 15th May 2024.

Key legal issues

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01

Whether the appellant satisfied the conditions for stay of execution under Order 42 Rule 6(2)

Holding

Stay granted conditionally: substantial loss was not established, but the application was brought without unreasonable delay, the appellant offered security, and the respondents were comfortable with a conditional stay, so the justice of the case favoured a conditional stay.

Reasoning

The court applied Order 42 Rule 6(2): substantial loss, no unreasonable delay, and security. On substantial loss, it found the applicant merely asserted the decretal sum was colossal without demonstrating actual loss, citing Timsales Limited. On delay, the application filed on 7th August 2023 followed the ruling of 14th July 2023 within a month. Security was offered by the applicant and accepted in principle by the respondents, aligning with Mitheu v Musau on the purpose of security. The court therefore granted a conditional stay with a 50% deposit.

p. 4

Legal principles established

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  • An applicant for stay of execution pending appeal must demonstrate substantial loss beyond merely stating that execution has commenced or that the decretal sum is large.
  • The requirement for security protects both the applicant's right of appeal and the decree-holder's ability to realize the decree.

Court orders

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  1. 1.Stay of execution of the decree in MCELRC Cause No 2315 of 2019 – Peterson Nyabuto Obweg & 6 others v Watchdog Limited granted pending hearing and determination of the appeal
  2. 2.50% of the decretal sum, Kshs 2,268,885.07/-, to be deposited in a joint interest-earning account in the names of the Advocates for the parties within 30 days of the date of the Ruling
  3. 3.In default of the deposit, execution to issue forthwith
  4. 4.Appellant/Applicant to file and serve submissions on the appeal within 21 days
  5. 5.Respondents to file and serve submissions within 21 days of service
  6. 6.Mention on 15th May 2024 to confirm compliance and fix the appeal for judgment

Authorities

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Legislation

  • Civil Procedure Rules 2010Order 51 Rule 1
  • Civil Procedure Act (Cap 21)Sections 1A, 1B, 3, 3A and 63(e)
  • Civil Procedure Rules 2010Order 42 Rule 6(1) and (2)
  • Civil Procedure Rules 2010Order 21 Rule 1
  • Constitution of KenyaArticles 159(2)(d) and 48

Cases cited (4)

  • Timsales Limited v Hiram Gichohi Mwangi
    Civil Appeal Number 94 of 2008 (2013) eKLR
  • Thomas M. Nguti & 196 others v Kenya Railways Corporation
    [2022] eKLR
  • Michael Ntouthi Mitheu v Kivondo Musau
    [2021] eKLR
  • Nduhiu Gitahi v Warugongo
    [1988] KLR 621; 1 KAR 100; [1988-92] 2 KAR 100
On appeal from
Milimani Chief Magistrate's Court (ELRC)
CMEL No 2315 of 2019
Jurisdiction invoked
Order 42 Rule 6(1) and (2) of the Civil Procedure Rules 2010; Sections 1A, 1B, 3, 3A and 63(e) of the Civil Procedure Act (Cap 21)

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, "Watchdog Limited v Obwege & 6 others (Employment and Labour Relations Appeal E145 of 2023) [2024] KEELRC 702 (KLR)", Case Analysis (2024). Milimani ELRC Appeal (from MCELRC Cause No 2315 of 2019). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2024/702/eng@2024-03-28

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