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ELRCPartially AllowedNairobi ELRC Appeal arising from Nairobi Chief Magistrate's Employment Case No. E470 of 2022 (Notice of Motion dated 7th April 2025)· [2025] KEELRC 2164 (KLR)

Chandaria v Mungai (Employment and Labour Relations Appeal E086 of 2025) [2025] KEELRC 2164 (KLR)

Employment and Labour Relations Court of Kenya
18 July 2025
4,233 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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A Kenyan employer won a stay of execution pending appeal but must deposit half the judgment money in court within 30 days.

What this practically means

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Executive summary

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The Appellant, judgment-debtor in Nairobi Chief Magistrate's Employment Case No. E470 of 2022, where Hon. Becky Cheloti (PM) on 28 February 2025 awarded the Respondent Kshs.1,124,923.45, moved the Employment and Labour Relations Court by Notice of Motion dated 7 April 2025 under Order 42 Rule 6(1) & (3) of the Civil Procedure Rules, the Civil Procedure Act, the ELRC Act and the ELRC (Procedure) Rules 2024, seeking stay of execution pending appeal. He argued substantial loss, expeditious filing, financial hardship following major surgery, and the Respondent's alleged inability to refund the decretal sum if the appeal succeeded, offering a bank guarantee as security. The Respondent opposed, insisting on a cash deposit into a joint interest-earning account. The court identified a single issue: whether stay should be granted. Applying Order 42 Rule 6(2), it held the application was timely; that mere likelihood of execution is not substantial loss, but the applicant's reasonable fear of non-refund shifted the evidential burden to the Respondent, who failed to demonstrate means of repayment, establishing substantial loss and risk of the appeal being rendered nugatory. On security, although a bank guarantee is a legitimate form of security, no guarantee document was placed before the court; balancing the parties' rights proportionately, the court granted stay conditional on the Appellant depositing half the decretal sum in court within 30 days. The Appellant was directed to file the complete record of appeal with submissions within 60 days, with mention on 17 September 2025. Costs of the application were awarded to the Respondent in the cause.

Key legal issues

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01

Whether substantial loss was established

Holding

Substantial loss established because the respondent failed to prove ability to refund the decretal sum if the appeal succeeds

Reasoning

The court applied Order 42 Rule 6(2). Mere likelihood of execution is not substantial loss, but the applicant's reasonable fear of non-refund raised an evidential burden which the respondent did not discharge by showing his resources. The court therefore found a high likelihood of the appeal being rendered nugatory if execution proceeded before hearing of the appeal.

p. 5
02

Whether the application was made without unreasonable delay

Holding

Application brought approximately 1 month and 9 days after judgment, without unreasonable delay

Reasoning

The judgment was delivered on 28 February 2025 and the motion dated 7 April 2025; the court found this delay reasonable, satisfying the second limb of Order 42 Rule 6(2).

p. 5
03

What form of security is appropriate

Holding

Stay granted conditioned on deposit of half the decretal sum in court; the bank guarantee proposal was not accepted as no guarantee document was placed before the court

Reasoning

While a bank guarantee is a legitimate and sufficient form of security within the court's discretion, the applicant placed no copy of any guarantee before the court for assessment. Balancing the parties' rights proportionately, the court required a deposit of half the decretal sum within 30 days as a reasonable condition of stay.

p. 8

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
  • Mere commencement or likelihood of commencement of execution does not amount to substantial loss

Court orders

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  1. 1.Stay of execution of the Judgment and Order of Hon. Becky Cheloti delivered on 28th February 2025 pending the hearing and determination of the appeal, on condition that the Appellant/Applicant deposits half of the decretal sum in Court within 30 days of the Ruling
  2. 2.Appellant to file the complete record of appeal together with written submissions within 60 days and ensure compliance with the Court Rules of 2024
  3. 3.Mention on 17th September 2025 to confirm compliance and issue further directions
  4. 4.Costs of the application to the Respondent in the cause

Authorities

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Legislation

  • Civil Procedure Rules 2010Order 42 Rule 6(1) & (3); Order 42 Rule 6(2); order XLI rule 4(2)(b)
  • Civil Procedure ActSections 1A, 1B and 3A
  • Employment and Labour Relations Court ActSections 12(1) and (3); Section 3
  • Employment and Labour Relations Court (Procedure) Rules, 2024Rules 21 and 73(2)
  • Constitution of KenyaArticle 159(2)
  • Evidence Act, Chapter 80 Laws of KenyaSection 112

Cases cited (15)

  • 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
  • Focin Motorcycle Co. Limited v Ann Wambui Wangui & another
    [2018] KENC 8358 (KLR)
  • Justin Mutunga David v China Road & Bridge Corporation (K) Limited
    [2019] eKLR
  • Gitahi & another v Warugongo
    [1988] eKLR
  • Jajuha Civil Contractors & Engineering Ltd v ABM Holdings Limited
    [2024] KENC 11194 (KLR)
  • RWW v EKW
    [2019] eKLR
  • Samvir Trustee Limited v Guardian Bank Limited
    [2007] eKLR
  • Nobel Trading co. ltd and others -vs- Peter Odhiambo Marega
    [2022] eKLR
  • Butt -vs Rent Restriction Tribunal
    (1982) KLR 417
On appeal from
Chief Magistrate's Court (Milimani), Nairobi
Nairobi Chief Magistrate's Employment Case No. E470 of 2022
Jurisdiction invoked
Sections 12(1) and (3) of the Employment and Labour Relations Court Act; Order 42 Rule 6(1) & (3) of the Civil Procedure Rules 2010; Sections 1A, 1B and 3A of the Civil Procedure Act; Rules 21 and 73(2) of the ELRC (Procedure) Rules 2024

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, "Chandaria v Mungai (Employment and Labour Relations Appeal E086 of 2025) [2025] KEELRC 2164 (KLR)", Case Analysis (2025). Nairobi ELRC Appeal arising from Nairobi Chief Magistrate's Employment Case No. E470 of 2022 (Notice of Motion dated 7th April 2025). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2025/2164/eng@2025-07-18

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