Nairobi West Hospital v Krishnamurthy (Cause E573 of 2021) [2024] KEELRC 2257 (KLR)
The bottom line
#A Kenyan employment court paused execution of a Kshs.39 million award against an employer, but only after it secured Kshs.30 million as security.
What this practically means
#Executive summary
#Key legal issues
#Whether the applicant demonstrated substantial loss
Yes - the respondent, a foreigner on a government visa with no known assets, could leave the jurisdiction with the decretal sum, rendering any successful appeal nugatory.
The court recited the authorities that mere execution is lawful and does not itself constitute substantial loss; the applicant must show the execution will negate the essential core of its position if the appeal succeeds. Here the respondent was not a Kenyan citizen, relied on a visa, had no known assets for execution, and had adduced no evidence that he could refund the sum or would remain in the country. That possibility strengthened the applicant's case on substantial loss.
Whether the application was made without unreasonable delay
Yes - the application was lodged within 14 days of the ruling.
While a single day could amount to unreasonable delay depending on circumstances, the applicant filed its application on 9th August 2023, less than 14 days after the ruling of 27th July 2023, satisfying the timeliness requirement of Order 42 Rule 6(2).
Whether the applicant offered security for due performance
Yes - although the supporting affidavit made no offer of security, during mentions it became clear the applicant was willing to provide security though the parties could not agree on the amount.
The supporting affidavit made no reference to willingness to furnish security, which ordinarily weighs against an applicant, but the court scheduled mentions for the parties to agree on security terms and the applicant showed readiness; only the amount was in dispute. The court therefore held the security requirement fulfilled and conditioned the stay on a deposit or bank guarantee of Kshs.30,000,000/=
Whether the applicant has a right of appeal and an arguable appeal
It was not for the court to determine arguability; appeals in arbitral cases do not require leave, and appeals from the ELRC lie to the Court of Appeal under Section 17 of the Employment and Labour Relations Act, 2011.
Counsel for the applicant had argued that appeals in arbitral matters required leave of the court; the court held the Arbitration Act imposes no such requirement and that Section 17 of the Employment and Labour Relations Act, 2011, read with Article 164(3) of the Constitution, gives a right of appeal against any judgment, order or decree of the Court.
Legal principles established
#- The requirements for a stay of execution under Order 42 Rule 6(2) are conjunctive and must all be met.
- Substantial loss is the cornerstone of a stay of execution application; execution being a lawful process does not itself amount to substantial loss.
- It is for the applicant for stay to volunteer the security it wishes to provide; security is the price of a stay and a manifestation of good faith.
- Appeals from the ELRC lie to the Court of Appeal under Section 17 of the Employment and Labour Relations Act, 2011, and appeals in arbitral cases do not require leave of the Court under the Arbitration Act.
Court orders
#- 1.Stay of execution granted pending the hearing and determination of the intended appeal, provided the Respondent deposits as security the sum of Kshs.30,000,000/= in an interest earning bank account in the joint names of the advocates for the parties, or provides a bank guarantee for a similar amount, within 45 days
- 2.If the applicant fails to satisfy the security condition, the Respondent will be at liberty to proceed with execution of the decree as provided by law
- 3.Parties shall bear their own costs
- Jurisdiction invoked
- Section 16 of the Employment and Labour Relations Court Act; Section 17 of the Employment and Labour Relations Act, 2011; Order 42 Rule 6(2) of the Civil Procedure Rules, 2010
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Nairobi West Hospital v Krishnamurthy (Cause E573 of 2021) [2024] KEELRC 2257 (KLR)", Case Analysis (2024). Not stated on the face of the extract. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2024/2257/eng@2024-09-19
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.