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Court of AppealPartially AllowedRule 5(2)(b) Application (Court of Appeal)

Electro Research Limited v Wayodi (Civil Application E340 of 2024) [2025] KECA 206 (KLR)

Court of Appeal
7 February 2025
1,563 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~6 min to read original · ~4 min brief

The bottom line

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The Court of Appeal paused collection of an unfair termination award, but only after the employer deposits Kshs 800,000 as security within 30 days.

What this practically means

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Executive summary

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Electro Research Limited applied under Rule 5(2)(b) of the Court of Appeal Rules, 2022 for a stay of execution of the judgment of the Employment and Labour Relations Court at Nairobi (Nzioki wa Makau J.) delivered on 22nd May 2023 in ELRC Cause No. 503 of 2019, which allowed Boniface Wayodi's claim for unlawful termination and awarded him roughly Kshs 1,665,301 plus costs and interest. The applicant argued the intended appeal was arguable and would be rendered nugatory if execution proceeded, as the respondent's financial means and ability to refund the decretal sum were unknown. The respondent countered that no substantial loss was demonstrated and sought a stay conditional on deposit of the entire decretal sum. The Court restated the settled twin requirements under Rule 5(2)(b): arguability and nugatory-ness, both of which must be demonstrated, citing Stanley Kang'ethe Kinyanjui v Tony Ketter. On arguability, the Court found one bona fide issue suffices and held the challenge to the legality and fairness of the termination was not frivolous. On the nugatory limb, the Court noted the respondent did not confirm ability to refund the decretal sum, making the effects of non-stay potentially irreversible. However, because the decree was a money judgment, the Court granted a conditional stay: the applicant must deposit Kshs 800,000/= in a joint interest-earning account in the names of both advocates within 30 days, failing which the stay lapses automatically. No orders were made as to costs of the application.

Questions the Court framed

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

  1. 1.Whether the intended appeal is arguable
  2. 2.Whether the intended appeal would be rendered nugatory if a stay of execution is not granted
  3. 3.Whether, on balance, a stay of execution should be granted and on what conditions

Key legal issues

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01

Arguability threshold under Rule 5(2)(b)

Holding

The applicant satisfied the first limb: the challenge to the legality and fairness of the termination raised a bona fide issue for consideration

Reasoning

The Court reiterated that 'arguable' does not mean an appeal that will definitely succeed but one raising a bona fide issue. A single arguable point suffices. The applicant's challenge to the ELRC's findings on the legality and fairness of the termination of the respondent's employment was not frivolous and merited the Court's consideration.

p. 2
02

Nugatory limb and refundability of a money decree

Holding

The nugatory limb was met because the respondent did not confirm capacity to refund the decretal sum, but the proper remedy was a conditional stay given it was a money judgment

Reasoning

Where the respondent cannot attest to ability to refund the decretal sum, the effects of non-stay may be irreversible. However, because the decree was a money judgment, the Court balanced the parties' interests by granting a stay conditional on a partial deposit rather than an unconditional stay.

p. 3

Legal principles established

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  • Rule 5(2)(b) relief requires both arguability and nugatory-ness; both limbs must be demonstrated
  • An arguable appeal need not be one that will succeed; one bona fide arguable point suffices
  • An intended appeal is rendered nugatory where the effect of not granting a stay is irreversible or not reasonably compensable by damages

Court orders

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  1. 1.Stay of execution of the judgment and orders of the ELRC at Nairobi delivered on 22nd May 2023 in ELRC Cause No. 503 of 2019 pending the hearing and determination of the appeal
  2. 2.The stay is conditional on the applicant depositing Kshs 800,000/= in a joint interest-earning account in the names of the advocates on record for both parties within 30 days
  3. 3.Upon default, the stay orders shall automatically lapse
  4. 4.No orders as to costs of the application

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 at Nairobi
ELRC Cause No. 503 of 2019
Jurisdiction invoked
Rule 5(2)(b) of the Court of Appeal Rules, 2022

Relief refused

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Unconditional stay of execution

The Court found a money judgment in favour of the respondent and imposed a conditional stay to balance the parties' interests

p. 3

Respondent's request that the entire decretal sum be deposited as security

The Court fixed security at Kshs 800,000/= rather than the full decretal sum of about Kshs 1,665,301 plus costs and interest

p. 3

Costs

We make no orders as regards the costs of the application.

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.

By the term “arguable”, it is not meant an appeal or an intended appeal that will definitely succeed, but one which raises a bona fide issue worth of consideration by the Court
p. 2Arguability threshold under Rule 5(2)(b)
An appeal or intended appeal will be rendered nugatory where the resulting efiect of not granting a stay of execution is likely to be irreversible or, if it is not reversible, where damages will not reasonably compensate the party aggrieved
p. 3Nugatory limb test
we order that there shall be a stay of execution of the judgment and orders of the Employment and Labour Relations Court (ELRC) at Nairobi (Nzioki wa Makau J.) delivered on 22nd May 2023 in ELRC Cause No. 503 of 2019, pending the hearing and determination of the appeal therefrom, on condition that the applicant deposits the sum of Kshs 800,000/= in a joint interestearning account opened in the names of the advocates on record for the applicant and respondent within 30 days of today’s date.
p. 3Final orders - conditional stay
Upon default, the stay orders shall automatically lapse. We make no orders as regards the costs of the application.
p. 3Final orders - default and costs

Issues in the judgment

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minor

The Court states 'the applicant has met the threshold for grant of a stay of proceedings' while the application sought a stay of execution, and the orders made are a stay of execution

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, "Electro Research Limited v Wayodi (Civil Application E340 of 2024) [2025] KECA 206 (KLR)", Case Analysis (2025). Rule 5(2)(b) Application (Court of Appeal). Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2025/206/eng@2025-02-07

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