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ELRCDismissedCause No E866 of 2024· [2025] KEELRC 372 (KLR)

Chikwanha v Alp Management Kenya Limited & another (Cause E866 of 2024) [2025] KEELRC 372 (KLR)

Employment and Labour Relations Court
13 February 2025
3,403 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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The Employment Court refused to freeze assets of companies not named in the lawsuit, saying a suspicion that an employer might sell property isn't enough without proof.

What this practically means

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Executive summary

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The Claimant, formerly employed by the 1st Respondent as Development Director until a disputed redundancy on 26th September 2023, sued challenging the redundancy and seeking withheld contractual benefits. Together with the Statement of Claim he filed an application dated 4th October 2024 seeking interim orders restraining the Respondents from disposing of ALP Limited, ALP North Two (Kenya) Limited, ALP North Three (Kenya) Limited and ALP West Three Limited, or their shares, to Lango Real Estate, or alternatively compelling the Respondents to deposit USD 2,798,326 in court as security for the anticipated decree. The Claimant feared the Respondents were divesting from Kenya to defeat enforcement. The Respondents opposed, contending the target companies are distinct legal entities not joined to the suit, and that asset sales are in the ordinary course of the 1st Respondent's real estate business. Applying Giella v Cassman Brown, the court found it could not determine a prima facie case at the interlocutory stage since both parties tabled supporting material on the contested issues of pre-contractual promises of equity payment and the validity of the redundancy under section 40 of the Employment Act. On the balance of convenience, the court held there was no cogent evidence of intent to defeat a decree: the COMESA approval relied on predated the termination, and orders could not issue against non-party companies entitled to be heard. The court also admitted the replying affidavit of the 1st Respondent's CEO despite procedural defects, applying article 159(2)(d). The application was dismissed with costs to the Respondents.

Key legal issues

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01

Prima facie case for interim injunction

Holding

The court could not determine at the interlocutory stage whether the Claimant had a prima facie case since both parties presented material supporting their contrasting positions

Reasoning

The dispute involved contested questions of pre-contractual representations about equity payments and the validity of the redundancy under section 40 of the Employment Act, which could only be resolved at full trial. With the prima facie case undetermined, the court resorted to the balance of convenience.

p. 4
02

Orders against non-party companies

Holding

Interim orders cannot issue against companies which are not parties to the suit, as they are entitled to be heard before adverse orders are made against them

Reasoning

The properties the Claimant sought to freeze were held by ALP Limited and related companies which were not joined to the suit. Subsidiaries are distinct legal entities with no obligation to carry the Respondents' liabilities, and natural justice requires they be heard before adverse orders issue.

p. 5
03

Security for performance of an anticipated decree

Holding

The power to order attachment before judgment must be exercised in the clearest of cases with cogent evidence of intent to defeat a decree

Reasoning

The 1st Respondent is a real estate company whose ordinary business is acquiring and disposing of property for profit. The COMESA approval relied on predated the termination of the Claimant's contract and could not show divestment to defeat a future claim.

p. 5
04

Validity of the replying affidavit

Holding

The affidavit sworn by the 1st Respondent's CEO was admissible despite failure to state on whose behalf he swore it

Reasoning

The deponent was a witness, not a party, so Order 1 rule 13 on authority of co-litigants did not apply. Under Order 19 rule 3(1) he deponed to matters within his knowledge in his capacity as CEO, and courts may ignore such irregularities under Order 18 rule 7.

Legal principles established

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  • Assets of a subsidiary company belong to a distinct legal entity which does not carry the parent's liabilities
  • Mere disposal of assets in the ordinary course of business is not evidence of intent to defeat a decree
  • A court may admit an affidavit despite procedural defects, absent scandalous, irrelevant or oppressive content and prejudice

Court orders

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  1. 1.Dismissal of the Claimant's application dated 4th October 2024
  2. 2.Costs of the application awarded to the Respondents

Authorities

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Legislation

  • Constitution of KenyaArticle 159(2)(d)
  • Employment ActSection 40
  • Employment and Labour Relations Court ActSection 12
  • Employment and Labour Relations Rules, 2024Part VIII
  • Civil Procedure RulesOrder 39; Order 19 rule 3(1); Order 18 rule 7; Order 1 rule 13(1) and (2)

Cases cited (6)

  • Giella v Cassman Brown & Co
    (1973) EA 358
  • Freight Forwarders Kenya Limited v Aya Investment Uganda Limited
    [2013] eKLR
  • Hannah Maina t/a Taa Flower v Rift Valley Bottlers Limited
    [2016] eKLR
  • Chai Trading Co. Limited v Muli Mwanzia & 2 others
    [2019] eKLR
  • Mosi v National Bank of Kenya Limited
    [2001] eKLR
  • Peter Onyango Onyiego vs Kenya Ports Authority
    [2004] eKLR
Jurisdiction invoked
Section 12 of the Employment and Labour Relations Court Act

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, "Chikwanha v Alp Management Kenya Limited & another (Cause E866 of 2024) [2025] KEELRC 372 (KLR)", Case Analysis (2025). Cause No E866 of 2024. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2025/372/eng@2025-02-13

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