Kimanzi & 2 others (Suing on their own Behalf and on Behalf and Representatives of 32 other Claimants) v Kalu Works Limited (Cause E423 of 2024) [2025] KEELRC 1059 (KLR)
The bottom line
#A Kenyan court ruled that a company rescued from insolvency must still pay workers their gratuity once administration ends.
What this practically means
#Executive summary
#Key legal issues
#Effect of termination of administration on insolvency-law defences
Once administration was terminated with effect from 25 August 2022, the Respondent could not claim protections under the Insolvency Act, and remains liable for liabilities incurred before administration
The Court traced the chronology: dismissal on 31 May 2021, administration from 27 May 2021, gazettement on 18 June 2021, and termination of administration gazetted on 2 September 2022 with effect from 25 August 2022 with the High Court's permission. Section 522 of the Insolvency Act places a company under administration as a going concern; the company did not 'die' but was 'ill and under medical care'. Having recovered, it cannot hide behind the Insolvency Act to escape liabilities surviving administration.
Res judicata
The preliminary objection on res judicata failed because the Respondent adduced no evidence that the claims had been heard and determined by a competent court
The Respondent contended under section 7 of the Civil Procedure Act that the claims should have been raised in the insolvency proceedings. The Court held that no material or evidence was placed before it supporting the contention that the claims were res judicata or had been conclusively determined by a court of competent jurisdiction. The objection therefore collapsed on the evidentiary burden resting on the objector.
Legal principles established
#- A company whose administration has been terminated cannot invoke the protections of the Insolvency Act to defeat claims of creditors/employees
- A party asserting res judicata must place material or evidence before the Court showing the claim was heard and determined conclusively by a court of competent jurisdiction
Court orders
#- 1.The Notice of Preliminary Objection is found without merit and is dismissed with costs.
- Jurisdiction invoked
- Employment and Labour Relations Court jurisdiction over the dispute (Issue in Dispute: refusal by the Respondent to pay gratuity determined by itself to the Claimants); no specific constitutional provision invoked
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Kimanzi & 2 others (Suing on their own Behalf and on Behalf and Representatives of 32 other Claimants) v Kalu Works Limited (Cause E423 of 2024) [2025] KEELRC 1059 (KLR)", Case Analysis (2025). Not stated on face of judgment (Statement of Claim filed 1 June 2024). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2025/1059/eng@2025-04-03
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.