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Court of AppealAllowedCivil Application No. 71 of 2014 (UR 50/2014)

Abyssinia Iron & Steel Ltd v Kenya Engineering Workers Union & another [2015] KECA 857 (KLR)

Court of Appeal of Kenya
5 March 2015
969 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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The Court of Appeal stopped enforcement of an order requiring a Kenyan company to sign a union recognition agreement, protecting the appeal from being wasted.

What this practically means

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Executive summary

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The Court of Appeal at Kisumu (Maraga, Azangalala and Kantai, JJ.A) ruled on a Notice of Motion by Abyssinia Iron & Steel Ltd under Sections 3A and 3B of the Appellate Jurisdiction Act and Rule 5(2)(b) of the Court's Rules. The applicant sought an injunction restraining the respondents from executing a decree of Hellen Wasilwa, J, delivered on 25th February 2014, which ordered the appellant to recognise a union within thirty days on pain of execution, together with a stay of proceedings in the Industrial Court case, pending hearing of Kisumu Civil Appeal No. 67 of 2014. The applicant's directors faced an application for committal to civil jail for contempt for refusing to execute a Recognition Agreement, which the court below declined to hear after the applicant's stay application. The application was unopposed; a temporary injunction had been granted pending the formal ruling. Applying the well-established Rule 5(2)(b) principles, the court found a substantial point of law on whether outsourcing employees was a means of avoiding legal obligations, and held that signing a recognition agreement would destroy the substratum of the appeal, while failure to comply would attract penal consequences. Relying on Murungaru v KACC, it held that matters involving penal consequences are treated differently when assessing nugatory-ness. The application was allowed with costs to abide the appeal.

Questions the Court framed

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The issues the Court set itself to decide, in its own words.

  1. 1.Whether the applicant has an arguable appeal
  2. 2.Whether, if the stay or injunction sought is not granted, the appeal would be rendered nugatory

Key legal issues

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01

Whether the appeal was arguable

Holding

The court was persuaded that there are substantial points of law, including whether outsourcing employees was a means to avoid legal obligations

Reasoning

The court perused the Memorandum of Appeal and found substantial points of law that the applicant should have an opportunity to canvass at the hearing of the pending appeal, including whether the applicant's method of outsourcing employees amounted to avoidance of legal obligations.

p. 2
02

Whether the appeal would be rendered nugatory without the stay

Holding

Compliance with the order to sign a recognition agreement, or committal of directors to civil jail, would destroy the substratum of the appeal; penal consequences justify the stay

Reasoning

If the applicant signed a recognition agreement, nothing would remain for determination on appeal; failure would attract penal consequences (committal to civil jail). Drawing on Murungaru v KACC, the court held that matters with penal consequences are treated differently, so refusing the stay would nugate the appeal.

p. 2

Legal principles established

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  • An applicant under Rule 5(2)(b) must demonstrate both an arguable appeal and that the appeal would be rendered nugatory if the stay or injunction is not granted
  • Matters involving penal consequences must be treated differently from purely civil matters when assessing whether an appeal would be rendered nugatory

Court orders

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  1. 1.Injunction restraining the respondents or their servants or agents from executing the decree in Kisumu Industrial Court Case No. 74 of 2013 pending hearing and determination of the appeal
  2. 2.Stay of proceedings in that case
  3. 3.Application allowed
  4. 4.Costs of the application to abide the results of the appeal

The bench

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One judgment of the whole court — no separate or dissenting opinions.

majority
majority
majority
On appeal from
High Court of Kenya at Kisumu
Industrial Case No. 74 of 2013
Jurisdiction invoked
Sections 3A and 3B of the Appellate Jurisdiction Act and Rule 5(2)(b) of the Court of Appeal Rules

Quotable passages

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Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.

an applicant under Rule 5 (2) (b) must show an arguable appeal which is to say an appeal which is not frivolous and next he must show that if the stay or the injunction sought is not granted, the appeal, or the intended appeal, if it were to be successful, would have been rendered nugatory by the refusal to grant the stay.
p. 2Rule 5(2)(b) principles
It can be no consolation to tell a man that his appeal will not be rendered nugatory even if he went to prison for only one week. The appeal would have been rendered nugatory..
p. 2penal consequences and nugatory appeal (quoting Murungaru v KACC)
For these reasons we allow the application. Costs of the same shall abide the results of the appeal.
p. 2final orders

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, "Abyssinia Iron & Steel Ltd v Kenya Engineering Workers Union & another [2015] KECA 857 (KLR)", Case Analysis (2015). Civil Application No. 71 of 2014 (UR 50/2014). Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2015/857/eng@2015-03-05

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