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Court of AppealAllowedCivil Application No. E085 of 2021 (Kisumu) – Motion under Rules 5(2)(b) and 49 of the Court of Appeal Rules, 2022

Sustainet Group Limited v Wanguhu (Civil Application E220 of 2022) [2024] KECA 1106 (KLR)

Court of Appeal of Kenya
30 August 2024
1,088 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~4 min to read original · ~4 min brief

The bottom line

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Kenya's Court of Appeal paused an employment case at the ELRC because the employment contract required arbitration, keeping that key question alive for the full appeal.

What this practically means

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Executive summary

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This is a reasoned ruling of the Court of Appeal at Kisumu (Okwengu, Omondi and Ngugi, JJA) explaining why, on 5th February 2024, it allowed Sustainet Group Limited's motion seeking a stay of proceedings in Kisumu ELRC No. E085 of 2021, pending a intended appeal from a ruling of the ELRC (C.N. Baari, J) dated 21st July, 2022. In that ruling, the ELRC had dismissed Sustainet's application seeking referral of the employment dispute with John Wanguhu to arbitration under clause 11 of his employment contract, holding that Section 12 of the Employment and Labour Relations Act conferred original jurisdiction on the ELRC which the arbitration clause could not oust. Sustainet moved the Court of Appeal under Rules 5(2)(b) and 49 of the Court of Appeal Rules, 2022, relying on Butt v Rent Restrictions Tribunal, Trust Bank v Investech Bank and Stanley Kangethe Kinyanjui v Tony Ketter. The respondent opposed, arguing inordinate delay (over a year between the ruling and the motion) and that the appeal would not be rendered nugatory. The Court found the intended appeal arguable because it raises the pertinent question of the ELRC's jurisdiction in light of the arbitration clause, and found the nugatory limb satisfied since the ELRC might issue orders unnecessarily complicating the appeal; the delay was held not inordinate in the circumstances. The Court granted the stay of proceedings and ordered that the costs of the motion abide the outcome of the appeal. The judgment does not disturb the ELRC ruling itself; that remains for the full 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's intended appeal is arguable
  2. 2.Whether the appeal would be rendered nugatory absent a stay of proceedings in the ELRC
  3. 3.Whether the delay in filing the motion was inordinate and whether it should be excused

Key legal issues

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01

Whether the intended appeal is arguable

Holding

The Court found the intended appeal arguable because it raises a pertinent jurisdictional question regarding the effect of the arbitration clause in the employment contract on the ELRC's jurisdiction.

Reasoning

Applying the settled principles from the authorities cited by the applicant, the Court assessed whether the memorandum of appeal disclosed issues capable of ventilation on appeal. It found that the question whether the ELRC could entertain the dispute notwithstanding the arbitration clause in the employment contract was a live and pertinent issue, sufficient to satisfy the arguability limb of the Rule 5(2)(b) test.

p. 2
02

Whether the appeal would be rendered nugatory absent a stay of proceedings

Holding

The Court held that the nugatory aspect was satisfied because the ELRC would proceed to hear the suit and might issue orders that would unnecessarily complicate the appeal; a stay also served judicial economy.

Reasoning

The Court reasoned that without a stay, the ELRC would continue with the hearing and possibly issue orders complicating the appeal. Although the Court of Appeal could later set aside any ELRC judgment, granting the stay was in the interest of expediency, saving judicial time and sparing the parties unnecessary expense. This satisfied the second limb of the Rule 5(2)(b) test.

p. 3
03

Whether the delay of over a year in filing the motion was inordinate

Holding

The Court held that although the motion was filed more than a year after the impugned ruling, the delay was not inordinate in the circumstances of the case.

Reasoning

The respondent opposed the motion on the ground of inordinate delay, the ruling having been delivered on 21st July, 2022 and the motion filed on 16th November, 2023. The Court acknowledged the delay but, in the circumstances of the case, exercised its discretion to find the delay not inordinate, thereby clearing the path for consideration of the merits of the motion.

p. 3

Legal principles established

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  • An intended appeal raising the question whether the ELRC's jurisdiction to entertain an employment dispute is ousted by an arbitration clause in the employment contract is arguable and warrants a stay of proceedings in the subordinate court.

Court orders

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  1. 1.Stay of proceedings in Kisumu ELRC No. E085 of 2021 pending the hearing and determination of the intended appeal
  2. 2.Costs of the motion to abide the outcome 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
Employment and Labour Relations Court
Kisumu ELRC No. E085 of 2021 (ruling dated 21st July, 2022)
Jurisdiction invoked
Rules 5(2)(b) and 49 of the Court of Appeal Rules, 2022

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.

In particular, the issue regarding the ELRC’s jurisdiction to entertain the dispute, in light of the arbitration clause in the employment contract between the applicant and the respondent is a pertinent issue.
p. 2Arguability of the intended appeal
In the circumstances of this case, we did not consider such delay inordinate.
p. 3Delay in filing the motion
Accordingly, we issued the order for stay of proceedings pending the hearing of the appeal. We further order that the costs of the motion shall abide the outcome of the appeal.
p. 3Final orders and costs

Issues in the judgment

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minor

The judgment states the employment contract took effect from a non-existent date, '31st November, 2021'.

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (1)

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Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.

Cite this brief

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Cite this brief

Caselaw, "Sustainet Group Limited v Wanguhu (Civil Application E220 of 2022) [2024] KECA 1106 (KLR)", Case Analysis (2024). Civil Application No. E085 of 2021 (Kisumu) – Motion under Rules 5(2)(b) and 49 of the Court of Appeal Rules, 2022. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2024/1106/eng@2024-08-30

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