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ELRCAllowedNotice of Motion dated 25th April 2025 (arising from Milimani MCELRC No. 876 of 2022)· [2025] KEELRC 2160 (KLR)

Canon Aluminium Fabricators Limited v Mulwa (Employment and Labour Relations Appeal E080 of 2025) [2025] KEELRC 2160 (KLR)

Employment and Labour Relations Court
18 July 2025
2,485 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
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The bottom line

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The Employment Court paused execution of a Kshs. 626,600 judgment pending appeal, but only after the employer deposits the full amount in court within 30 days.

What this practically means

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Executive summary

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This ruling of the Employment and Labour Relations Court at Nairobi, delivered by J. W. Keli, Judge, on 18th July 2025, determined a Notice of Motion dated 25th April 2025 by the Appellant/Applicant seeking stay of execution of a judgment of the Hon. E. Riany in Milimani MCELRC No. 876 of 2022, which awarded the Respondent Kshs. 626,600 plus costs and interest, together with resultant Warrants of Attachment dated 25th April 2025, pending the hearing of an appeal. The application was brought under Order 42 Rule 6 and Order 51 of the Civil Procedure Rules and Sections 1A, 1B and 3A of the Civil Procedure Act, and was opposed through a Replying Affidavit in which the Respondent argued the application was a delaying tactic, that a money decree's execution cannot constitute substantial loss, and offered undertakings to refund or alternatively a partial release of funds. Because the ELRC (Procedure) Rules 2024 are silent on the conditions for stay, the court applied Order 42 Rule 6(2). On substantial loss, the court applied Century Oil Trading and National Industrial Credit Bank vs Wasike, holding that once the applicant expressed a reasonable fear that the respondent could not refund the decretal sum, the evidential burden shifted to the respondent, who produced no proof of financial ability. Delay was found not unreasonable. On security, guided by Michael Ntouthi Mitheu vs Kivondo Musau and Butt vs Rent Restriction Tribunal, the court granted a conditional stay requiring deposit of the full judgment sum of Kshs. 626,600 in court within 30 days, ordered the record of appeal and submissions within 60 days, fixed mention for 17th September 2025, and awarded costs of the application to the respondent in the cause.

Key legal issues

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01

Whether the applicant would suffer substantial loss if stay is not granted

Holding

Substantial loss was established because the applicant showed a reasonable fear that the respondent could not refund the decretal sum, which the respondent failed to rebut with evidence of financial ability.

Reasoning

The court applied the Century Oil test: for money decrees, the financial position of both parties matters. Relying on National Industrial Credit Bank Ltd vs Aquinas Francis Wasike, once the applicant expressed a reasonable fear that the respondent could not repay, the evidential burden shifted to the respondent. The respondent gave only an undertaking, without bank statements or proof of employment or assets, so the fear stood unrebutted and substantial loss was found.

p. 5
02

Whether the application was made without unreasonable delay

Holding

The application, filed about two months after judgment, was held to have been made without unreasonable delay.

Reasoning

The second Order 42 Rule 6(2) condition requires the application to be made without unreasonable delay. The court found the approximately two-month interval between judgment and the application acceptable, without further analysis of the intervening procedural steps.

p. 5
03

Whether security for the due performance of the decree should be furnished

Holding

Security was imposed: the applicant had to deposit the entire judgment sum of Kshs. 626,600 in court within 30 days as a condition of the stay.

Reasoning

Guided by Michael Ntouthi Mitheu vs Kivondo Musau, the court reasoned that security protects both sides: a successful appellant must be able to recover its money, and a decree-holder must be able to realize the decree if the appeal fails. Since the appeal could be rendered nugatory if the respondent's assets were sold with no certainty of repayment, a conditional stay with full deposit struck the balance.

p. 5

Legal principles established

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  • Once an applicant expresses a reasonable fear that a respondent would be unable to repay the decretal sum, the evidential burden shifts to the respondent to show what resources he has.
  • Where execution of a money decree is sought to be stayed, the court considers the financial position of both parties and balances the applicant's interest in preserving the appeal against the respondent's interest in enjoying the fruits of judgment.

Court orders

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  1. 1.Stay of execution of the Judgment and Order of the Hon. E. Riany delivered on 25th February 2025 and the resultant Warrants of Attachment dated 25th April 2025 granted pending the hearing and determination of the appeal
  2. 2.Stay granted on condition that the Appellant/Applicant deposits the entire judgment sum of Kshs. 626,600 in Court within 30 days of the Ruling
  3. 3.Costs of the application to the respondent in the cause
  4. 4.The appellant to file a complete record of appeal together with written submissions within 60 days
  5. 5.Mention on 17th September 2025 for further directions

Authorities

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Legislation

  • Civil Procedure Rules 2010Order 42 Rule 6
  • Civil Procedure Rules 2010Order 51
  • Civil Procedure ActSections 1A, 1B and 3A
  • Employment and Labour Relations Court (Procedure) Rules 2024Rule 21
  • Evidence ActSection 112

Cases cited (8)

  • Timsales Limited vs. Hiram Gichohi Mwangi
    Civil Appeal Number 94 of 2008 (2013) eKLR
  • Thomas M. Nguti & 196 Others vs Kenya Railways Corporation
    [2022] eKLR
  • Machira t/a Machira & Co Advocates vs East African Standard No. 2
    [2002] KLR 63
  • Century Oil Trading Company Ltd vs. Kenya Shell Limited
    Nairobi (Milimani) HCMCA No. 1561 of 2007
  • National Industrial Credit Bank Ltd vs Aquinas Francis Wasike and Another
    [2006] eKLR
  • Michael Ntouthi Mitheu vs Kivondo Musau
    [2021] eKLR
  • Nduhiu Gitahi vs. Warugongo
    [1988] KLR 621; 1 KAR 100; [1988-92] 2 KAR 100
  • Butt vs Rent Restriction Tribunal
    (1982) KLR 417
On appeal from
Milimani Magistrate's Court (MCELRC)
Milimani MCELRC No. 876 of 2022
Jurisdiction invoked
Order 42 Rule 6 and Order 51 of the Civil Procedure Rules 2010; Sections 1A, 1B and 3A of the Civil Procedure 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, "Canon Aluminium Fabricators Limited v Mulwa (Employment and Labour Relations Appeal E080 of 2025) [2025] KEELRC 2160 (KLR)", Case Analysis (2025). Notice of Motion dated 25th April 2025 (arising from Milimani MCELRC No. 876 of 2022). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2025/2160/eng@2025-07-18

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