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ELRCPartially AllowedPetition (stay application in respect of Judgment of 7th August 2020); intended appeal Civil Appeal No. E286 of 2020

Paul Kipsang Kosgei v National Industrial Training Authority & another; Cabinet Secretary, Ministry of Labour & Social Services (Interested Party) [2021] KEELRC 1286 (KLR)

Employment and Labour Relations Court
9 July 2021
6,035 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~24 min to read original · ~4 min brief

The bottom line

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Kenya's employment court paused a Kshs.27.6 million judgment against NITA pending appeal, but only on condition that Kshs.5 million be paid to the winner within 30 days.

What this practically means

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Executive summary

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This is a ruling by Maureen Onyango J of the Employment and Labour Relations Court at Nairobi on the Respondents' Notice of Motion dated 3rd September 2020 seeking a stay of execution of the judgment and decree of 7th August 2020, which awarded the Petitioner general damages of Kshs.27,600,000 for violations of Articles 41, 47, 50 and 236 of the Constitution and breach of legitimate expectation, with the 2nd Respondent ordered to personally bear the costs. The Applicants, who had lodged Civil Appeal No. E286 of 2020 in the Court of Appeal, argued they would suffer substantial loss as the Petitioner was a man of unknown means, that they had filed timeously, and that as a State Corporation funded from the Exchequer they were exempt from security under Order 42 Rule 8. The Petitioner opposed, contending inordinate delay, failure to attach a draft memorandum of appeal, no evidence of inability to refund, and that he was a man of means holding valuable land. The court found the application timeous, but held the Applicant failed to demonstrate substantial loss since the Petitioner owned valuable land and could refund the decretal sum if the appeal succeeded. On security, the court held that Order 42 Rule 8 does not exempt a State Corporation, which is a body corporate capable of suing and being sued and cannot hide behind its governmental character, following Midrocwater Drilling and Kimoi Ruto. However, taking judicial notice of the 1st Respondent's public character and balancing the parties' interests, the court stayed execution pending appeal on condition that Kshs.5,000,000 be paid to the Petitioner within 30 days. Costs of the application were ordered to abide the outcome of the appeal.

Questions the Court framed

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

  1. 1.Whether the application was filed without inordinate delay
  2. 2.Whether the Applicant demonstrated substantial loss that it would suffer if stay is not granted
  3. 3.Whether the Applicant was required to deposit security for the due performance of the decree

Key legal issues

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01

Whether the stay application was filed without unreasonable delay

Holding

The application filed on 4th September 2020 following judgment of 7th August 2020 was timeous.

Reasoning

The Respondent alleged the motion was filed 54-56 days after judgment, constituting inordinate delay. The court found the application was dated 3rd September 2020 and filed on 4th September 2020, barely a month after judgment, and was considered ex parte on 4th September 2020. The Applicants were therefore not guilty of delay.

p. 5
02

Whether the Applicant demonstrated substantial loss

Holding

The Applicant failed to demonstrate substantial loss because the Petitioner, who owns valuable land, is not a man of straw and any decretal sum paid would be recoverable if the appeal succeeds.

Reasoning

Substantial loss on a money decree lies in the inability of the decree-holder to refund. The Applicant relied on the Petitioner's alleged unknown means, but the court found the Petitioner owned substantial land as evidenced by the title deed produced, so the decretal sum would be recoverable and the appeal would not be rendered nugatory.

p. 6
03

Whether the Applicant is exempt from depositing security under Order 42 Rule 8 as a State Corporation

Holding

Order 42 Rule 8 does not exempt a State Corporation which is a body corporate distinct from Government; however, the court in its discretion conditioned the stay on a part-payment rather than a deposit of security.

Reasoning

The 1st Respondent is established under the Industrial Training Act as a body corporate with capacity to sue and be sued and own property, funded not only by Parliament but also by levies and fees. Relying on Midrocwater Drilling and Kimoi Ruto, the court held state corporations are not 'Government' under the Government Proceedings Act. Taking judicial notice of its public character, the court nevertheless exercised discretion to condition the stay on payment of Kshs.5,000,000 to the Petitioner.

p. 7

Legal principles established

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  • A state corporation established under an Act of Parliament is a body corporate capable of suing and being sued and is not exempt from security requirements merely because it is funded from public funds

Court orders

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  1. 1.Stay of execution of the judgment and decree issued on 7th August 2020 pending hearing and determination of Civil Appeal No. E286 of 2020, National Industrial Training Authority & Another v Paul Kipsang Kosgei & Others
  2. 2.Stay conditional upon payment of Kshs.5,000,000.00 to the Petitioner within 30 days from the date of the ruling
  3. 3.Costs of the application to abide the outcome of the appeal

The bench

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One judgment of the whole court — no separate or dissenting opinions.

majority

Wrote the judgment

Jurisdiction invoked
Order 42 Rule 6 of the Civil Procedure Rules, 2010; Sections 1A, 1B and 3A of the Civil Procedure Act

Relief refused

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Stay granted without any condition or security

Although the court found Order 42 Rule 8 does not exempt the State Corporation, it declined to require full security but conditioned the stay on a part-payment to the Petitioner

p. 7

Costs

The costs of the application shall abide the outcome of the appeal.

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.

An order be and is hereby issued staying execution of the judgment and decree issued by this court on 7 th August 2020 (and not 7th August 2019 as stated in prayers 2 and 3 of the Applicant’s application herein) pending hearing and determination of Civil Appeal No. E286 of 2020, National Industrial Training Authority & Another v Paul Kipsang Kosgei & Others on condition that Kshs.5,000,000.00 is paid to the Petitioner within 30 days from the date of this ruling.
p. 8Final orders - conditional stay of execution
A person who owns as much land as is reflected in the title deed produced by the Respondent cannot therefore be a man of straw.
p. 6Substantial loss - ability to refund decretal sum
It cannot hide under the guise of being a Government Corporation to cushion it against execution.
p. 7State corporations not exempt from execution as Government
The ordinary principle is that a successful party is entitled to the fruits of his judgement or of any decision of the court giving him success at any stage.
p. 8Balancing appellant's right of appeal against decree-holder's rights
Judgment having been delivered on 7 th August 2020, I find that the application for stay was filed timeously and that the Applicants are not guilty of delay in filing the same.
p. 5No inordinate delay in filing stay application

Issues in the judgment

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minor

The motion's prayers refer to judgment of 7th August 2019 whereas the grounds and the ruling refer to 7th August 2020; the court corrected this in its orders

minor

Conflicting accounts of the filing date/delay: Respondent asserted 54-56 days delay; the Applicant asserted filing on 3rd September 2020; the court found filing on 4th September 2020

minor

Inconsistent counsel attribution: authorities relied on by the Applicant are repeatedly introduced as 'The Respondent submits/submitted' in the analysis section

minor

Ground (a) of the motion dates the judgment as 7th August 2020 while prayers 2 and 3 date it 7th August 2019

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, "Paul Kipsang Kosgei v National Industrial Training Authority & another; Cabinet Secretary, Ministry of Labour & Social Services (Interested Party) [2021] KEELRC 1286 (KLR)", Case Analysis (2021). Petition (stay application in respect of Judgment of 7th August 2020); intended appeal Civil Appeal No. E286 of 2020. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2021/1286/eng@2021-07-09

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