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ELRCAllowedNot stated in the judgment as provided· [2025] KEELRC 63 (KLR)

Kenya Engineering Workers Union (In Receivership) & 173 others v Athi River Steel Plant (In Receivership & another (Cause 661 of 2019) [2025] KEELRC 63 (KLR)

Employment and Labour Relations Court of Kenya
22 January 2025
2,388 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~10 min to read original · ~4 min brief

The bottom line

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What this practically means

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Executive summary

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The Employment and Labour Relations Court at Nairobi (Jemimah Keli, J) allowed a Notice of Motion dated 27th February 2024 brought by the respondents in the main suit, a company under receivership acting through its Receiver Manager P.V.R. Rao, seeking to set aside ex-parte proceedings and stay delivery of a pending judgment. The 1st Claimant (a union) filed a Memorandum of Claim in 2019; the respondents entered appearance through advocates on 18th November 2019 but never filed a response. The 2nd - 174th Claimants were joined to the proceedings in January 2023 without service on the respondents' advocates, and the hearing of 27th April 2023 proceeded ex-parte, the hearing notice having been served directly on the respondents rather than on their advocates on record. Counsel for the respondents only learnt the matter had been heard when a notice for mention to take a judgment date was received on 9th February 2024. The court held that a memorandum of appearance is not an idle document but designates the address for service, and that it is not open to a litigant to serve a party directly outside that address without leave of the court. Service of the hearing notice was therefore defective, and the applicants were denied a fair and reasonable opportunity to be heard contrary to Article 50(1) of the Constitution and the audi alteram partem rule. The court set aside the ex-parte proceedings, ordered the suit set down for hearing de novo on a priority basis, awarded costs of the application in the cause, and fixed mention on 12th February 2025 for hearing directions.

Key legal issues

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01

Whether service effected directly on a party whose advocates are on record, contrary to the address for service in the memorandum of appearance, is defective

Holding

The court held that service of the hearing notice for 27th April 2023 directly on the respondents without serving their advocates on record was defective.

Reasoning

The memorandum of appearance filed on 18th November 2019 designated advocates with an address for service. Applying Order 6 Rules 3 and 6 of the Civil Procedure Rules by analogy to fill the lacuna in the ELRC procedural rules, the court held documents must be served at the stated address for service. Service outside that address without leave denies the party notice, rendering the ex-parte proceedings a breach of natural justice.

p. 5
02

Whether the applicants were denied a fair hearing under Article 50(1) of the Constitution

Holding

The court found the applicants were not given a fair and reasonable opportunity to be heard, since the advocates on record were not served and the applicants were absent when directions were given to proceed by written submissions.

Reasoning

Relying on the Supreme Court of India decision in Indru Ramchand Bharvani v Union of India (cited in Kidero v Waititu), the court held a fair hearing requires both an opportunity to be heard and that the opportunity be reasonable. Because the hearing notice was never served on the advocates on record, the applicants had no opportunity to participate, satisfying the test for setting aside ex-parte proceedings under Article 50(1).

p. 5
03

Whether leave of the court was required to institute the suit against a company under receivership

Holding

The court noted the claimants' submission, supported by Coast Hauliers Limited v Imperial Bank Limited (In Receivership), that leave is not a prerequisite to suing a company under receivership, Section 432(2) of the Insolvency Act applying only to liquidation.

Reasoning

The claimants argued, and cited authority holding, that provisions applicable to a banking institution under receivership are distinct from those applicable to an institution in liquidation, so leave is not a prerequisite to filing suit against a company under receivership. The court's decision did not turn on this point, being decided on defective service and the right to fair hearing.

p. 4

Legal principles established

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  • A memorandum of appearance is a legal document giving notice of the address for service; a litigant may not serve process outside that address on the party directly without leave of the court.
  • A fair hearing has two justiciable elements: an opportunity of hearing must be given, and that opportunity must be reasonable.

Court orders

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  1. 1.Stay of any further proceedings in the matter including a stay of delivery of the pending judgment
  2. 2.The ex-parte proceedings in the matter set aside
  3. 3.The suit be set down for hearing de novo on a priority basis
  4. 4.Mention on 12th February 2025 for hearing directions
Jurisdiction invoked
Article 50 of the Constitution of Kenya, 2010; Section 3 of the Employment & Labour Relations Court Act (No. 20 of 2011); Rules 17(2) & 22 of the Employment & Labour Relations Court Rules (2016)

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, "Kenya Engineering Workers Union (In Receivership) & 173 others v Athi River Steel Plant (In Receivership & another (Cause 661 of 2019) [2025] KEELRC 63 (KLR)", Case Analysis (2025). Not stated in the judgment as provided. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2025/63/eng@2025-01-22

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