Joseph Ashioya &165; others v Kenya United Steel Co (2006) Ltd & another [2013] KEELRC 654 (KLR)
The bottom line
#166 former steel workers can pursue their company for unpaid dues, but not the receiver it had appointed — and the case is paused until a government investigation report is out.
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 Claim against the 2nd Respondent (Receiver/Manager) was bad in law, misconceived and did not disclose a cause of action
- 2.Whether the 2nd Respondent could be sued in its capacity as Receiver/Manager or whether proceedings must be against the company in receivership
- 3.Whether the Cause was time barred by virtue of the Limitation of Actions Act
- 4.Whether the interplay between the repealed Trade Disputes Act and the Limitation of Actions Act barred the claim
- 5.Whether the Cause was scandalous, frivolous or vexatious
Key legal issues
#Capacity of a Receiver/Manager to be sued
The claim against the 2nd Respondent was incompetent; the Receiver on appointment becomes agent of the company placed under receivership, not of any other company, and the claim against the Receiver was dismissed.
Applying Lochab Brothers, the court held that receivers may sue and be sued only in connection with the company under receivership. The Receivers appointed by debenture holders became agents of Kenya United Steel Co. Ltd. Whether that company changed name or transferred ownership to the 1st Respondent was a matter of evidence. Joining the Receiver was therefore improper joinder, though the Cause could proceed against the principal.
Limitation of trade disputes
The Limitation of Actions Act did not apply to trade disputes under the repealed Trade Disputes Act; the second ground of objection failed.
The court noted that the Trade Disputes Act had its own timelines, was not among statutes expressly excluded under Part V of the Limitation of Actions Act, but that section 14(9)(b) and (c) barred the Industrial Court from taking cognizance of a dispute under settlement or investigation. Since this dispute was reported to the Minister and investigated, limitation under the Limitation of Actions Act was inapplicable, but the Cause had to await release of the investigators' report.
Scandalous, frivolous or vexatious ground
The court declined to determine this ground as academic in light of its findings, leaving serious legal and employment rights issues for determination on merit.
Because the claim against the 2nd Respondent had been dismissed and the Cause stayed pending release of the investigation report, determining the section 345 Companies Act argument would serve no useful purpose. The court noted the Cause raised serious employment rights issues requiring determination on the merit if it proceeded.
Legal principles established
#- A receiver is authorised to take proceedings only in the name of the company whose agent it is and cannot sue in its own name; the same principle applies to suing a receiver.
- The Limitation of Actions Act was inapplicable to trade disputes envisaged under the repealed Trade Disputes Act.
- Where an employee predicates a claim on ordinary law of contract before the Employment Act, 2007, the Limitation of Actions Act applies; after commencement, section 90 of the Employment Act applies.
- The Industrial Court could not take cognizance of a trade dispute which was in the process of settlement, investigation or determination by other lawful means.
Court orders
#- 1.Dismissal of the claim against the 2nd Respondent (Price Water Coopers) for incompetence of capacity and improper joinder
- 2.The Cause to proceed as against the 1st Respondent
- 3.The Claimants' Advocate to serve the ruling upon the Minister/Cabinet Secretary for Labour and the Investigator
- 4.The Cause stayed pending/until the release of the Investigations report as envisaged under the Trade Disputes Act
- 5.Liberty to apply
- 6.No order as to costs
The bench
#One judgment of the whole court — no separate or dissenting opinions.
Wrote the judgment
- Jurisdiction invoked
- Industrial Court jurisdiction under the repealed Trade Disputes Act
Relief refused
#Claim against the 2nd Respondent
A Receiver/Manager cannot be sued personally; joinder of Price Water Coopers was improper
Costs
There will be no order as to costs.
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.
I do order that this ruling be served upon the Minister/Cabinet Secretary for Labour and the Investigator by the Claimants' Advocate on record and that this Cause be stayed pending/until the release of the Investigations report as envisaged under the Trade Disputes Act.
In conclusion I do find and hold that it was incompetent for the Claimants' to bring proceedings against the 2 nd Respondent and do dismiss the claim against and further hold the Industrial Court could not take cognizance of a trade dispute which was under settlement or investigations and therefore the Limitation of Actions Act is/was inapplicable.
There will be no order as to costs.
The Receiver becomes on appointment, not the agent of any other company such as the 2 nd Respondent but the company placed under receivership.
In my considered view therefore, the Limitation of Actions Act is/was not applicable to trade disputes as envisaged under the repealed Trade Disputes Act.
Issues in the judgment
#The 2nd Respondent is referred to inconsistently - 'Price Water Coopers' in the body of the judgment, described in submissions as a Receiver/Manager; the judgment also refers to Mr. Dearing as Receiver who was 'a director of the 2nd Respondent' yet the court holds a corporate body is not capable of acting as receiver under section 345 of the Companies Act
The case number of the Cause is not stated in the judgment; it is only described by filing date and parties
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Joseph Ashioya &165; others v Kenya United Steel Co (2006) Ltd & another [2013] KEELRC 654 (KLR)", Case Analysis (2013). Industrial Cause as stated in Memorandum of Claim filed 9 May 2011 (number not stated in judgment). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2013/654/eng@2013-07-26
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.