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ELRCAllowedNot stated in judgment· [2024] KEELRC 2580 (KLR)

Nakachi v Centric Air Ambulance Limited (Cause E614 of 2021) [2024] KEELRC 2580 (KLR)

Employment and Labour Relations Court
23 October 2024
AJABUODHA NELSON JORUM
1,317 words in judgment
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The bottom line

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A Kenyan court ordered a company director to appear in person and explain why he shouldn't face up to six months in civil jail for dodging a judgment debt.

What this practically means

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Executive summary

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This ruling by the Employment and Labour Relations Court at Nairobi, delivered on 23rd October 2024 by Abuodha Nelson Jorum, determines the Claimant's application dated 13th February 2024 seeking that Peter Kenneth Chege Nduati, the Respondent's director, appear in person before the court and, failing to do so, that warrants of arrest issue for his committal to civil jail for up to six months for failure to honour the decree. The application was anchored on sections 12 and 13 of the Employment and Labour Relations Court Act, sections 38(d) and 40 of the Civil Procedure Act and Order 22 Rule 32 of the Civil Procedure Rules. The Claimant averred that a ruling of 5th December 2023 had required the director to show cause why he should not be committed, that orders were served, but the director wilfully refused to comply. In reply, the director asserted the company was bankrupt and not trading, that ambulances were repossessed over a Maisha Bora Sacco loan taken in 2019 before the claim, and that as a mere director he was distinct from the company and not the judgment debtor. The court held that it had already lifted the corporate veil and found the director liable, a finding he never appealed. Adopting its earlier reliance on Innocent G. Ondieki v Julius Nakaya Kabole [2019] eKLR, the court reiterated that inability to pay does not attract committal, but dishonesty does. Finding the director's explanation evasive and his failure to respond to the notice to show cause demonstrative of dishonesty, the court directed him to appear personally on 10th December 2024 to show cause why he should not be committed for a maximum of six months, with the court bailiff and police empowered to enforce the order.

Key legal issues

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Whether the respondent's director should be committed to civil jail for failing to honour the decree

Holding

The court found the director dishonest and directed him to appear in person to show cause why he should not be committed to civil jail for a maximum of six months

Reasoning

The court noted that it had already lifted the corporate veil and found the director liable, and that he had not appealed. The director offered no satisfactory explanation regarding the ambulances repossessed over the Maisha Bora Sacco loan, and ignored the notice to show cause. His conduct was found to be trickery to avoid the decree, amounting to dishonesty justifying committal proceedings under section 38 of the Civil Procedure Act and Order 22 rule 32.

p. 3

Legal principles established

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  • A debtor is not liable to committal for mere inability to pay, but a dishonest and fraudulent debtor may be arrested and committed to civil jail
  • Where dishonesty is proved, committal of a judgment debtor to civil jail is provided for under section 38 of the Civil Procedure Act

Court orders

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  1. 1.The Respondent's Director, Peter Kenneth Chege Nduati, is ordered to appear personally before the physical Court on Tuesday, 10th December 2024 to show cause why he should not be committed to civil jail for a maximum of six months for failure to honour the decree
  2. 2.The Court bailiff, with if needed the assistance of the nearest police station in whose jurisdiction Peter Kenneth Chege Nduati resides, is directed to enforce the order
Jurisdiction invoked
Sections 12 and 13 of the Employment and Labour Relations Court Act; sections 38(d) and 40 of the Civil Procedure Act; Order 22 Rule 32 of the Civil Procedure Rules (2010)

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (1)

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Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.

Cite this brief

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Cite this brief

Caselaw, "Nakachi v Centric Air Ambulance Limited (Cause E614 of 2021) [2024] KEELRC 2580 (KLR)", Case Analysis (2024). Not stated in judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2024/2580/eng@2024-10-23

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