Kyalo v DT Dobie & Company (Kenya) Limited & 2 others (Cause E507 of 2024) [2025] KEELRC 2702 (KLR)

b. 3. That costs of, and incidental to the application be provided for. The application sets out general grounds on which it is brought, which include an averment that the Claimant has a good cause of action against the Third Respondent. The application is anchored on the Claimant/Applicant’s supporting afidavit sworn on 10th July, 2024. It is deponed in the said supporting afidavit, inter-alia:a. that the 3rd Respondent is incorporated outside Kenya, in France, and that leave of the Court is necessary to efiect service of summons and/or Notice of Summons upon the 3rd Respondent ex- Juris in order to empower the Court to assume Jurisdiction over the 3rd Respondent. b. that the 3rd Respondent is the Parent Company of the 1st and 2nd Respondents, which are its wholly owned and controlled subsidiaries incorporated in Kenya. c. that at all material times relevant hereto upto 9th May, 2024, the Claimant was employed by the 1st and 2nd Respondents in the position of General Manager – Passenger Car Sales, pursuant to contracts of employment dated 22nd December, 2020 and 31st March, 2023 respectively. d. that the Claimant’s claim against the 3rd Respondent is in the tort of inducing breach of the employment contract dated 31st March, 2023. e. that while discharging his duties as General Manager – Passenger Car, the Claimant discovered evidence of a massive bribery scheme perpetrated by the 1st and 2nd Respondents, with the complicity of the 3rd Respondent, relating to corrupt bribe payments made to public oficials in order to win and retain public tenders for leasing of motor vehicles under Government of Kenya (GOK) Vehicle Leasing Program for the period 2017 to 2023. f. that in order to conceal and to facilitate the corrupt bribe scheme, the 1st and 2nd Respondents, with complicity of the 3rd Respondent, engaged an intermediary, in part to assist in the bribery scheme, and to ofier and make bribe payments to public oficials. (Some details and particulars are stated in the supporting afidavit). g. that concerned that the bribery scheme and corrupt payments disclosed potential violation of Kenya anti-bribery laws (i.e Anti-Bribery Act, the Anti-Corruption and Economic Crimes Act, the Proceeds of Crime and Anti-Money Loundering Act and the Respondents’ AntiBribery Policies and Procedures), and pursuant to the Claimant’s contractual obligation of “up the ladder reporting”, the Claimant severally notified the Respondents of his concerns and submitted to them evidence of bribery and potential violation of anti-bribery laws and compliance policies. h. that the Respondents failed to take any reasonable steps to investigate and to remedy the violations aforementioned. i. that subsequent to the aforesaid reports of bribery and potential violation of the law, the 3rd Respondent knowingly and intentionally procured, instigated, incited and assisted the 1st and 2nd Respondents to terminate the Claimant’s contract of employment. That in particular, the 3rd Respondent’s Managing Director for Multi-brand Division (in a meeting held at Nairobi on 24th October, 2024) instructed the 2nd Respondent to sack the Claimant and to subsequently appoint its own HR Manager to implement its instructions. (Documents in this regard are annexed to the supporting afidavit). https://new.kenyalaw.org/akn/ke/judgment/keelrc/2025/2702/eng@2025-10-03 2

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4. j. that as a result of the 3rd Respondent’s inducement, the 2nd Respondent terminated the Claimant’s contract of employment on 9th May, 2024 without notice and payment of lawful dues, without any valid grounds, and in violation of its HR Policies, Procedures and fair procedure. k. that breach of the Claimant’s employment contract was directly attributable to the 3rd Respondent’s tortious inducement, without lawful justification for such inducement. l. that this court has jurisdiction, under Article 162(2) of the Constitution of Kenya and Section 12 of the Employment and Labour Relations Court Act 2012, to hear and to determine all aspects of the dispute herein, and in particular the inducement claim against the 3rd Respondent. The application is opposed by the 1st and 2nd Respondents vide their grounds of opposition dated 30th July, 2024. It is stated in the grounds of opposition:a. That the statement of claim does not disclose any cause of action against the 3rd Respondent, and that the Claimant has no locus standi to sue the 3rd Respondent before this Court for reasons:i. that there is no employment relationship between the 3rd Respondent and the Claimant. That pursuant to Section 12 of the Employment and Labour Relations Court Act, this Court lacks jurisdiction to entertain the claim against the 3rd Respondent. ii. that the 3rd Respondent is a foreign company and a shareholder of the 2nd Respondent. That the 1st and 2nd Respondents are separate entities and that the Claimant has not disclosed any legal basis for the joinder of the 3rd Respondent in the proceedings herein. iii. in the absence of Jurisdiction, an order allowing service of process upon the 3rd Respondent would be in vain, and the Court should not issue orders in vain. c. that the 3rd Respondent is not a necessary or proper party to the suit. That the Claimant and the 1st and 2nd Respondents possess all the material and facts necessary for the Court to determine the suit herein, and that no value would be added by the 3rd Respondent. d. that the application is an abuse of the Court’s process and ought to be dismissed. 5. The 1st and 2nd Respondents’ foregoing grounds of opposition were filed contemporaneously with an evenly dated Notice of Preliminary Objection which raised the same grounds as in the grounds of opposition, albeit in a shorter form. The said preliminary objection has since been determined by this Court vide its Ruling delivered on 31st January, 2025. The Court was on 6th March, 2025 informed by Counsel for the 1st and 2nd Respondents that this Court’s said Ruling is now the subject of Court of Appeal Civil Appeal No. 141 of 2025. I will, therefore, determine only two issues on the Notice of Motion dated 10th July, 2024, and that is whether the Claimant has disclosed a reasonable cause of action against the 3rd Respondent; and whether the order sought should issue. 6. Before delving into the identified issues, however, it is worthy noting that proceedings so far taken in the suit herein relate to the 3rd Respondent foreign company, which is sued herein, but which has never been served with Summons to enter appearance to facilitate its participation in these proceedings. Allegations of inducement of the 1st and 2nd Respondents by the 3rd Respondent to breach the Claimant’s contract of employment have been made by the Claimant in the suit herein, and https://new.kenyalaw.org/akn/ke/judgment/keelrc/2025/2702/eng@2025-10-03 3

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documents tending to point to that direction have been placed before this Court. The 3rd Respondent is an admitted shareholder of the 2nd Respondent, and therefore not a stranger to the 1st and 2nd Respondents. The validity of the documents annexed to the Claimant’s supporting afidavit has not been questioned by the 1st and 2nd Respondents. 7. Employment contracts are contractual relationships, and established general principles and doctrines relating to the law of contract, where necessary, apply regarding employment contracts. In the English cases of OBG Limited and Others v Allan and Others, Douglas & Others v Hello ! Limited & Others; and Mainstream Properties Limited v Young and Others [2007] UKHL 21, Lord Hofimann stated the legal position regarding inducing breach of contract as follows:“ 3. Liability for inducing breach of contract was established by the famous case of Lumley v Gye [1853] 2E & B216. The Court based its decision on the general principle that a person who procures another to commit a wrong incurs liability as an accessory. As Erle J put it (at P 232):“It is clear that the procurement of the violation of a right is a cause of action in all instances where the violation is an actionable wrong, as in violation of a right to property, whether real or personal, or to personal security: he who procures the wrong is a joint wrongdoer, and may be sued; either alone or jointly with the agent, in the appropriate action for the wrong complained of” . . . . . . . 5. 8. The forms of action no longer trouble us. But the important point to bear in mind about Lumley v Gye is that the person procuring the breach of contract was held liable as accessory to the liability of the contracting party. Liability depended on the contracting party having committed an actionable wrong . . .” It was stated as follows in Joseph Ochieng & 2 Others t/a Acquiline Agencies v First National Bank of Chicago [1990] eKLR:“ . . . It is stated in Bullen and Leak’s Precedents of Pleadings, 12th edition, at page 500 under rubric Right of Action that:“The essential ingredients of the tort of inducing a breach of contract are:- 9. 1. the wrongdoer knew or acquired knowledge of the contract in question and its essential terms, 2. that he so acted or interfered whether by persuasion, inducement or procurement or other means as to show that he intended to cause a breach of the contract or prevent its performance by one party to the detriment of the other party. 3. that the breach of the contract was directly attributable to such act or interference, and 4. that damage was occasioned or was likely to be occasioned to such other party.” In the present case, I am satisfied that the Claimant, whose contract of employment was terminated as a result of the alleged inducement by the 3rd Respondent, has demonstrated the existence of a probable cause of action against the 3rd Respondent, regarding which the 3rd Respondent should be served with summons and suit documents herein to enable it to enter appearance and defence, if it so wishes. https://new.kenyalaw.org/akn/ke/judgment/keelrc/2025/2702/eng@2025-10-03 4

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10. As stated in Daniel Motaung v Somasource Kenya EPZ Ltd t/a Sama & 2 Others [2024] KEELRC 7 (KLR):“ 63. . . . Summons to enter appearance also play a pivotal role when it comes to a defendant who is outside the Court’s Jurisdiction. The supplemental but equally important role is that it empowers the Court in question to assume jurisdiction over such party. The manner in which such Jurisdiction is assumed by the Court is that firstly the Plaintifi has to seek leave of the Court to serve such summons outside the Court’s Jurisdiction. The purpose of seeking leave is to enable the Court to weigh the reasons adduced by the Plaintifi and determine whether a proper case has been made out for service of summons outside its jurisdiction. The principles that govern the Court in determining whether or not to grant leave are set out, though not exhaustively, under Order 5 Rule 25 . . . Secondly, upon such leave being granted, the summons has to be served upon the defendant. It is only upon service of the summons that a Court assumes jurisdiction over a foreign defendant . . .” 11. I have taken note of the fact that three of the reliefs sought by the Claimant in his Statement of Claim dated 1st July, 2024 are as follows:“ (d) A declaration that the Third Respondent induced breach of the Employment Contract between the Claimant and the Second Respondent. (g) An award of Kshs.123,193,057.60 against the Third Respondent. (h) General, exemplary and punitive damages against the Respondents.” 12. It cannot be said that there is no legal basis upon which the 3rd Respondent can be served with summons and/or Notice of Summons to Enter Appearance ex-Juris. 13. The 1st and 2nd Respondents have submitted that the tort of inducing a breach of contract does not fall within the Jurisdiction of the Employment and Labour Relations Court, and to firm up this position they have cited a decision of a Court of concurrent status, the High Court, in the case of Ezekiel Oira v Ethics and Anti-Corruption Commission and Director of Public Prosecutions [2016] KEHC 4562 (KLR). 14. The Court of Appeal stated as follows in the case of Paramount Bank Limited v Vaqvi Syed Qamara & Another [2017] eKLR:“ . . . The preamble to Employment and Labour Relations Court Act states that the Court is established to hear and determine disputes relating to “employment and labour relations” and “for connected purposes”. Among its powers under Section 12, the Court hears and determines all disputes relating to and arising out of employment and labour relations. In the exercise of that Jurisdiction, the Court has the power to award compensation or damages in any circumstances contemplated under the Act or any other written law and to grant any other appropriate relief that it may deem fit.” 15. As I preceded to point out in this Ruling, employment contracts are contracts, and may fall within the purview of established doctrines and principles that apply, or may apply in relation to other contracts. https://new.kenyalaw.org/akn/ke/judgment/keelrc/2025/2702/eng@2025-10-03 5

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16. Although the 3rd Respondent is yet to respond to the allegations made against it by the Claimant in the pleadings herein as it is yet to be served with summons and pleadings herein, the 1st and 2nd Respondents have put up a spirited legal efiort to have the 3rd Respondent, on whose behalf they cannot validly litigate, struck ofi these proceedings. They have, however, not told this Court what prejudice they will sufier if the 3rd Respondent, a foreign company incorporated in France, is served with summons and pleadings herein as by law provided. Having considered written submissions filed by both parties, I find merit in the Notice of Motion dated 10th July, 2025. The same is allowed in the following terms:a. Leave is hereby granted to the Claimant/Applicant to efiect service of summons and/or Notice of Summons herein outside Kenya upon the Third Respondent, which is a foreign company incorporated in France, by way of Electronic Mail to the Third Respondent’s last confirmed and used Email addresses, namely rbielle@cfao.com and thirata@cfao.com. b. The Third Respondent shall enter appearance within 21 days of service. c. Costs of the application shall be in the suit. The Notice of Motion dated 28th February, 2025 17. The application is expressed to be brought under Rule 45(1) of the Employment and Labour Relations Court (Procedure) Rules 2024. The 1st and 2nd Respondents, at this stage, seek Orders:a. 18. That there be a stay of proceedings herein pending the hearing and determination of the appeal to the Court of Appeal being Civil Appeal No. 141 of 2025 against the Ruling delivered on 31st January, 2025. The application sets out on its face the grounds on which it is brought, and it is based on the supporting afidavit of Eunice Kamau, the 2nd Respondent’s Legal Manager, sworn on 28th February, 2025. It is deponed in the said supporting afidavit that:a. aggrieved by this Court’s Ruling of 31st January, 2025, the 1st and 2nd Respondents filed an appeal to the Court of Appeal being Civil Appeal No. E141 of 2025; and that the intended appeal has good chances of success. 19. In opposition to the application, the Claimant filed a replying afidavit sworn by himself on 28th March, 2025. It is deponed in the said afidavit that this Court has no jurisdiction to determine the application, that the application is incompetent and is an abuse of the Court’s process as the Applicants have not sought leave to efiect service on the 3rd Respondent ex-Juris, that stay of proceedings is a grave Judicial action which will interfere with the Claimant’s right to access to justice, fair trial and right to be heard without delay. 20. It is also deponed in the Claimant’s said replying afidavit that there are no circumstances warranting stay of proceedings, that the appeal will not be rendered nugatory if stay of proceedings is not granted, that the application is brought at the behest of the 3rd Respondent in order to obstruct and defeat Justice, and that the appeal has no prospects of success. 21. The Claimant also filed a Notice of Preliminary Objection dated 28th March, 2025, pleading lack of jurisdiction on the part of this Court [over the application] on account of failure by the 1st and 2nd Respondents to seek leave to efiect service of the Application on the 3rd Respondent (CFAO SAS) EXJURIS. https://new.kenyalaw.org/akn/ke/judgment/keelrc/2025/2702/eng@2025-10-03 6

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22. Both sides (the Claimant on one side and the 1st and 2nd Respondents on the other side) filed written submissions on the application, the Claimant having chosen to withdraw his Notice of Preliminary Objection. In urging the Court to grant the stay of proceedings sought, the 1st and 2nd Respondents argued that this Court has jurisdiction to order stay of proceedings. 23. The 1st and 2nd Respondents cited Halsbury’s Laws of England, 5th Edition, Volume 12, at paragraph 1028 where the purpose of stay of proceedings is stated as follows:“ A stay of proceedings arises under an order of the court which puts a stop or ‘stay’ on the further conduct of the proceedings in that court at the stage which they have then reached, so that the parties are precluded thereafter from taking any further step in the proceedings. The object of the order is to avoid the trial or hearing of the claim taking place, where the court thinks it is just and convenient to make the order, to prevent undue prejudice being occasioned to the opposite party or to prevent the abuse of the process.” 24. The 1st and 2nd Respondent/Applicants relied on several decided cases, which include the Court of Appeal decisions in the cases of Co-operative Bank of Kenya Ltd v Banking Insurance & Finance Union Kenya [2014] KECA 109 (KLR) and Delphis Bank Limited – v Channan Singh Chatthe & 5 Others [2006] KECA 295 (KLR). 25. It ought to be appreciated that no two cases are identical in facts and circumstances, and that similar cases are usually cited for purposes of guidance. In the present case, the 1st and 2nd Respondent/ Applicants have not stated what prejudice they will sufier if proceedings herein are not stayed. It is to be noted that the preliminary objection giving rise to the Ruling which the 1st and 2nd Respondent/ Applicants’ have appealed from related to the 3rd Respondent in the main suit herein, a foreign company which is yet to be served with summons ex-Juris. The said preliminary objection, seeking to have the 3rd Respondent struck ofi from the suit herein, and which this Court dismissed vide its Ruling delivered on 31st January, 2025, was about the 3rd Respondent, not about the 1st and 2nd Respondents. 26. This Court is yet to assume Jurisdiction over the 3rd Respondent, as service of summons ex-Juris is yet to happen. The 1st and 2nd Respondents appear to be purporting “to litigate” on behalf of the 3rd Respondent. The Claimant’s deposition that the present application “has been brought at the behest of the 3rd Respondent” cannot, in my view, be viewed as hollow deposition. 27. The 1st and 2nd Respondents have not demonstrated that they will sufier any form of prejudice if the stay of proceedings sought is not granted, and have not demonstrated that the pending appeal will be rendered nugatory. 28. Having said that, and having considered the written submissions filed, I find no merit in the Notice of Motion dated 28th February, 2025, and the same is hereby dismissed. Costs of the application shall be in the suit. DATED, SIGNED AND DELIVERED AT NAIROBI THIS 3RD DAY OF OCTOBER 2025 AGNES KITIKU NZEI JUDGE ORDER This Ruling has been delivered via Microsoft Teams Online Platform. A signed copy will be availed to each party upon payment of the applicable Court fees. https://new.kenyalaw.org/akn/ke/judgment/keelrc/2025/2702/eng@2025-10-03 7

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AGNES KITIKU NZEI JUDGE Appearance: Mr. Kiplangat for the Claimant/Applicant Mr. Makori and Miss Muthiani for the Respondent DRAFT https://new.kenyalaw.org/akn/ke/judgment/keelrc/2025/2702/eng@2025-10-03 8

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