AVC Management Company Limited t/a Mnarani Club & another v Mwangero & another (Civil Application E015 & E016 of 2024 (Consolidated)) [2024] KECA 1574 (KLR)
The bottom line
#The Court of Appeal paused enforcement of two employment judgments against Mnarani Club, but only if the hotel deposits half the awarded sums within 30 days.
What this practically means
#Executive summary
#Questions the Court framed
#The issues the Court set itself to decide, in its own words.
- 1.Whether the applicant has demonstrated an arguable appeal
- 2.Whether, absent stay of execution, the intended appeals would be rendered nugatory
- 3.On what conditions, if any, stay of execution pending appeal should issue
Key legal issues
#Whether the appeal was arguable
The court found the appeal arguable, an assertion the respondents did not contest, on the question of the respondents' employment in light of the alleged arbitral award
The applicant contended the appeals raised fundamental questions of law on the legitimacy and regularity of proceedings adopting an Arbitral Award finding no employer-employee relationship, which would oust the ELRC's jurisdiction. The respondents did not contest arguability, and the court agreed the employment issue in light of the arbitral award was clearly arguable. Arguability requires only a bona fide issue, not that the appeal must succeed.
Whether the appeals would be rendered nugatory without stay
The nugatory limb was satisfied given the applicant's uncontroverted averment that the respondents may be unable to refund the decretal sum, with the condition of partial deposit protecting both sides
The applicant averred the respondents might not refund the decretal sum if paid over; this was not controverted. The court noted impecuniosity alone does not deny a litigant the fruits of success, but a colossal sum requires evidence of ability to refund. The respondents themselves did not insist on immediate payment but proposed a joint interest-earning deposit. The court applied the proportionality principle in sections 3A and 3B of the Appellate Jurisdiction Act, balancing the hardships of both parties.
Legal principles established
#- Both limbs of the rule 5(2)(b) test - arguability and nugatory effect - must be demonstrated before relief can be granted
- A single bona fide arguable point suffices to demonstrate an arguable appeal under rule 5(2)(b)
- An appeal is rendered nugatory where the effect is irreversible or damages would not reasonably compensate the aggrieved party
- Impecuniosity is not necessarily a ground for denying a successful party the fruits of litigation, but where the amount involved is on its face colossal, the successful party ought to show evidence of financial ability to refund
Court orders
#- 1.Stay of execution of the judgments in Malindi ELRC Appeal Nos. E006 of 2023 and E007 of 2023 entered on 23rd May 2024 pending the hearing and determination of the appeals
- 2.Stay conditional on the applicant depositing half of the respective principal sums in a joint interest earning account in the names of the advocates for the parties within 30 days
- 3.In default of compliance the stay will automatically lapse
- 4.Costs of the application to be in the intended appeals
The bench
#One judgment of the whole court — no separate or dissenting opinions.
- On appeal from
- Employment and Labour Relations Court
- ELRC Appeal Nos. E007 of 2023 and E006 of 2023 (Malindi)
- Jurisdiction invoked
- Rule 5(2)(b) of the Court of Appeal Rules; sections 3A and 3B of the Appellate Jurisdiction Act (overriding objective)
Relief refused
#Unconditional stay of execution without deposit of security
The court balanced the hardships under the overriding objective and adopted the respondents' proposal of a conditional stay; the applicant's objection that depositing would amount to double payment did not prevail
Costs
The costs will be in the intended appeals.
Quotable passages
#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 the premises the order that commends itself to us and which we hereby make is that there be a stay of execution of the judgements in Malindi ELRC Appeal Nos. E006 of 2023 and E007 of 2023 entered on 23rd May 2024 pending the hearing and determination of the appeals against the said judgements on condition that the applicant deposits half of the respective principal sums in a joint interest earning account in the names of the advocates for the parties within 30 days from today’s date. In default of compliance the stay will automatically lapse.
Both limbs must be demonstrated before a party can obtain a relief under rule 5(2)(b)
By arguable is not meant an appeal or an intended appeal which must succeed but one which raises a bona fide issue worth of consideration by the Court
impecuniosity of a party, it has been held, is not necessarily a ground for denying a party the fruits of his successful litigation. However, where the amount involved is, on the face of it colossal, the successful party ought to show some evidence of financial ability to refund the sum in question.
Loss to the parties on both sides of the appeal plays a central role in the determination since it is what the Court must strive to prevent by preserving the status quo
Issues in the judgment
#The names of the two respondents are not given anywhere in the judgment; they are referred to only as 'the respondents', so party identity is incomplete
The judgment contains an internal inconsistency: paragraph 1 states the magistrate dismissed the respondents' claim finding the respondent (singular) had been retired pursuant to the CBA, mixing singular and plural references
The application is described as twin Notices of Motion dated 30th May 2024, but no separate application numbers are stated for the motions themselves
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "AVC Management Company Limited t/a Mnarani Club & another v Mwangero & another (Civil Application E015 & E016 of 2024 (Consolidated)) [2024] KECA 1574 (KLR)", Case Analysis (2024). Civil Application (Twin Notices of Motion dated 30th May 2024) arising from Malindi ELRC Appeal Nos. E006 of 2023 and E007 of 2023. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2024/1574/eng@2024-11-08
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.