Miseda v Todays Online Limited & 2 others; Standard Chartered Bank (Garnishee) (Cause 704 of 2010) (Employment and Labour) [2022] KEIC 2 (KLR)
The bottom line
#Kenya's Employment Court held company directors personally liable for an 11-year-old unpaid award after they sold the business and left the country.
What this practically means
#Executive summary
#Key legal issues
#Lifting of the corporate veil to enforce an unsatisfied award against directors
The court lifted the corporate veil, holding the 2nd and 3rd respondents personally liable for the decretal amount
The directors sold the company's assets, relocated outside the jurisdiction, and failed to honour the award for 11 years despite awareness of it. The court characterised these as deliberate and fraudulent acts designed to dispossess the claimant of the benefit of the award, constituting circumstances that justify lifting the corporate veil.
Directors as 'employers' under Section 2 of the Employment Act
The directors were deemed employers of the claimant in the absence of the sold company
Section 2 of the Employment Act defines an employer to include agents, foremen, managers or factors of companies that have contracted to employ an individual. The respondents held decisional control of the company and the power to dispose of the business, so they could conveniently be deemed employers in the company's absence.
Legal principles established
#- Directors who dispose of company assets, leave the jurisdiction and fail to honour an award may have the corporate veil lifted and be held personally liable as employers under Section 2 of the Employment Act
- Deliberate acts to forestall satisfaction of a court award constitute fraudulent conduct justifying lifting of the corporate veil
Court orders
#- 1.The 2nd and 3rd respondents shall personally pay the decretal amount due to the claimant, as computed by the claimant
- 2.Order nisi granted directing the garnishee to attach all monies/debts in current account number 0150xxxxxxxx in the names of the 2nd and 3rd respondents and utilize such monies in satisfaction of Kshs 2,085,000
- 3.The garnishee to file its replying affidavit within 7 days of the ruling, with a suitable date for inter partes hearing to be obtained at the registry
- Jurisdiction invoked
- Original and supervisory jurisdiction over enforcement of its own award under the Employment and Labour Relations Court Act and the Employment Act
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Miseda v Todays Online Limited & 2 others; Standard Chartered Bank (Garnishee) (Cause 704 of 2010) (Employment and Labour) [2022] KEIC 2 (KLR)", Case Analysis (2022). Not stated in judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keic/2022/2/eng@2022-09-29
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.