HHI Management Services Limited v Okeyo & another (Civil Application E341 of 2024) [2025] KECA 501 (KLR)
The bottom line
#The Court of Appeal refused to pause an employment case, ruling that a win on appeal later could fix any harm through costs.
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 application has met the threshold for granting a stay of further proceedings
- 2.Whether the ongoing court-annexed mediation affects the application for a stay
Key legal issues
#Whether the applicant demonstrated an arguable appeal under rule 5(2)(b)
The Court found the appeal arguable on the enforceability of arbitration clauses in employment contracts in light of Article 159(2)(c) of the Constitution and prior decisions.
The applicant's intended appeal raises the question whether section 15 of the Employment and Labour Relations Court Act excludes arbitration for employment disputes and whether section 26 of the Employment Act renders such clauses unenforceable. A single bona fide arguable ground suffices; the appeal need not succeed. The Court expressly declined to make definitive findings of law at the interlocutory stage.
Whether the intended appeal would be rendered nugatory if a stay is not granted
The Court found no nugatory prejudice: a mediation settlement is the product of the parties themselves, and a successful appeal after trial would render the trial decision a nullity for want of jurisdiction, a reversible outcome compensable by costs.
Under Reliance Bank Ltd v Norlake Investments Ltd, nugatory-ness is assessed case by case balancing conflicting claims. The applicant only asserted loss of the arbitration opportunity. The Court held the consequences of trial would be reversible and compensable by an award of costs, and that the applicant could not be prejudiced by a settlement it helped formulate. The discretionary balance therefore favoured the respondent.
Whether the competency of the notice of appeal barred the application
The Court noted the service complaints but held that a challenge to the notice of appeal's validity should be raised by a striking-out application, which the respondent had not made.
The 1st respondent alleged the notice of appeal was served on a wrong email address and filed outside timelines under Rule 79(1). The Court acknowledged these concerns but held that the validity of a notice of appeal is properly contested through an application to strike out the appeal, which had not been brought; it therefore did not determine competency on this application.
Whether the ongoing court-annexed mediation affected the stay application
The pendency of court-annexed mediation weighed against a stay: a mediation settlement agreement is a product of the parties, so the applicant could not be prejudiced by it.
The trial court had referred the matter to mediation, yet the applicant pressed for arbitration. The Court observed that a settlement agreement reached in mediation is formulated by the parties themselves, making it inconceivable that the applicant could be prejudiced by a settlement it helped shape. The parallel consensual process therefore undermined rather than supported the nugatory-ness limb.
Legal principles established
#- A rule 5(2)(b) applicant must satisfy both twin principles of an arguable appeal and that the appeal would be rendered nugatory absent a stay; an arguable appeal need not necessarily succeed.
- Whether an appeal will be rendered nugatory depends on whether what is sought to be stayed is reversible, or whether damages will reasonably compensate the aggrieved party; where the trial outcome would be reversible and compensable by costs, no nugatory prejudice is shown.
- The proper forum to challenge the validity of a notice of appeal is an application to strike out the appeal, not opposition to an interlocutory stay application.
Court orders
#- 1.The application dated 4th July 2024 is dismissed
- 2.Costs of the application to the 1st respondent
The bench
#One judgment of the whole court — no separate or dissenting opinions.
- On appeal from
- Employment and Labour Relations Court
- Nairobi ELRC Cause No. E970 of 2023
- Jurisdiction invoked
- Rule 5(2)(b) of the Court of Appeal Rules (application for stay of proceedings pending appeal)
Relief refused
#Stay of proceedings in Nairobi ELRC Cause No. E970 of 2023 pending the hearing and determination of the intended appeal
The appeal was arguable but the applicant failed to demonstrate that the appeal would be rendered nugatory if the trial proceedings, including court-annexed mediation, proceeded; any adverse trial outcome would be reversible and compensable by costs
Costs
The application dated 4th July 2024 lacks merit and is accordingly dismissed with costs to the 1st respondent.
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.
The Court recognizes that granting a stay of proceedings is a serious matter that should only occur in deserving cases, as it affects the right to a timely trial. The applicant must demonstrate an arguable appeal and the potential for the appeal to be rendered nugatory if a stay is not granted.
As an arguable appeal is not one which must necessarily succeed, but one which ought to be argued fully before the Court, and one which is not frivolous, we hold that the applicant has an arguable case.
This Court is not convinced that the intended appeal would be rendered nugatory if the proceedings before the ELRC, especially the mandated court-annexed mediation, proceed.
Therefore, we are not inclined to exercise the Court's discretion in favour of the applicant. Consequently, the application dated 4th July 2024 lacks merit and is accordingly dismissed with costs to the 1st respondent.
Issues in the judgment
#The judgment does not state the appeal number or the names of the parties as respondents; the respondents are referred to only as 'the applicant' and 'the 1st respondent', and the affidavit refers to Arun Mathur as 'the chairman of the 2nd respondent's board of directors' although only a 1st respondent appears in the proceedings.
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "HHI Management Services Limited v Okeyo & another (Civil Application E341 of 2024) [2025] KECA 501 (KLR)", Case Analysis (2025). Not stated in the judgment (application dated 4th July 2024). Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2025/501/eng@2025-03-21
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.