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Court of AppealDismissedNot stated in judgment

Ndwati v Nakachi & another (Civil Application E598 of 2024) [2025] KECA 502 (KLR)

Court of Appeal
21 March 2025
1,368 words in judgment
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The bottom line

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Kenya's Court of Appeal refused to pause contempt proceedings against a company director, ruling he should have appealed the earlier decision holding him personally liable.

What this practically means

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Executive summary

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This was a reserved ruling of the Court of Appeal at Nairobi explaining its dismissal on 9th December 2024 of a Notice of Motion dated 5th November 2024 in which an applicant sought stay of execution of a ruling of the Employment and Labour Relations Court at Nairobi (Abuodha, J, 22nd October 2024, Cause No E614 of 2021) ordering him to appear in court on 10th December 2024 to show cause why he should not be committed to civil jail for up to six months. The underlying claim by the 1st respondent against the 2nd respondent concerned withdrawal of salary; judgment was entered against the 2nd respondent, and in proceedings to enforce the decree the applicant, the 2nd respondent's sole director, was joined as an interested party and, by a ruling of 5th December 2023, was called upon to show cause why he should not be found in contempt for failing to settle the decretal sum. The applicant contended his fair-hearing rights were violated and that the corporate veil had been improperly lifted. The 1st respondent opposed, arguing the application was premature, that the applicant had been heard at every stage, and that the decision lifting the corporate veil had never been appealed. Applying the established two-limb test (arguability and nugatory), the Court held the intended appeal was not arguable: the decision holding the applicant liable was the 5th December 2023 ruling, which had not been successfully challenged, so success on the intended appeal would be inconsequential. Having failed the first limb, the Court did not consider the second limb and dismissed the application with costs. The judgment was delivered on 21st March 2025 by W. Karanja, W. Korir and G. V. Odunga, JJA, as a single judgment of the court.

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, if the orders sought are not granted, the appeal, if successful, will be rendered nugatory

Key legal issues

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01

Arguability of the intended appeal

Holding

The intended appeal was not arguable because the decision the applicant wished to challenge (his liability for the 2nd respondent's indebtedness) was made in the ruling of 5th December 2023, which was never challenged; success on the intended appeal would leave that decision intact.

Reasoning

The Court identified the decision holding the applicant liable as the 5th December 2023 show-cause ruling, not the 22nd October 2024 ruling. Since the earlier ruling was unchallenged, success in the intended appeal would be inconsequential. The Court therefore found the first limb of the stay test unsatisfied and declined to consider the second limb.

p. 3

Legal principles established

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  • An applicant for stay of execution pending appeal must satisfy both limbs: that the appeal is arguable and that it will be rendered nugatory unless stay is granted; failure on one limb is fatal.
  • An applicant need not prove a multiplicity of arguable grounds; one bona fide arguable ground suffices.

Court orders

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  1. 1.The Notice of Motion dated 5th November 2024 seeking stay of execution pending the intended appeal was dismissed with costs

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
Cause No E614 of 2021
Jurisdiction invoked
Not expressly stated; the Court exercised its inherent/appellate jurisdiction to grant or refuse stay of execution pending an intended appeal

Relief refused

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Stay of execution of the ruling and orders of the Employment and Labour Relations Court made on 22nd October 2024, ordering the applicant to show cause why he should not be committed to civil jail

The Court was not satisfied that the intended appeal is arguable, and having failed the first limb there was no need to consider the nugatory limb

p. 3

Costs

The application was dismissed with costs (to the 1st respondent)

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.

Having perused the impugned judgment and considered the proposed grounds of appeal as highlighted in the applicant's afidavit in support of his application as well as the submissions of learned counsel, we were not satisfied that the intended appeal is arguable.
p. 3Arguability of intended appeal
Since we were not satisfied on the first limb, there was no need for us to consider the second limb.
p. 3Both limbs of the stay test must be satisfied
It was on that basis that we dismissed the application with costs.
p. 3Final orders - dismissal with costs

Issues in the judgment

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minor

The judgment refers to the trial court's liability decision as made on '15th December 2023' in one passage and as a ruling 'dated 5th December 2023' elsewhere, an internal date inconsistency

minor

The judgment does not state the names of the parties, the appeal number, or a neutral citation; the record identifies only the underlying Cause No E614 of 2021

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, "Ndwati v Nakachi & another (Civil Application E598 of 2024) [2025] KECA 502 (KLR)", Case Analysis (2025). Not stated in judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2025/502/eng@2025-03-21

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