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ELRCPartially AllowedNot stated in the ruling

Marango & 122 others v Kedong Ranch Limited (Petition E009 of 2020) [2022] KEELRC 4144 (KLR)

Employment and Labour Relations Court of Kenya at Nakuru
29 September 2022
2,923 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~12 min to read original · ~4 min brief

The bottom line

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A Kenyan employer won a pause on paying a Kshs 3.5 million judgment, but only if it deposits the full amount in a joint interest-earning account within 60 days.

What this practically means

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Executive summary

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This is a ruling by Hon. Lady Justice Hellen Wasilwa of the Employment and Labour Relations Court at Nakuru on a Notice of Motion dated 13th June 2022 by the respondent in the underlying suit, seeking stay of execution of a judgment delivered on 31st May 2022 in which the court granted the petitioners a permanent injunction restraining the respondent from converting their permanent contracts to term contracts, ordered payment of unpaid house allowance of Kshs 3,549,270/-, and awarded costs and interest. The applicant, intending to appeal to the Court of Appeal, relied on Order 42 rule 6 and Order 51 rule 1 of the Civil Procedure Rules and sections 1A, 1B and 3A of the Civil Procedure Act, arguing no delay, substantial loss because the petitioners were men of straw, and offering a bank guarantee as security. The petitioners opposed, contending the application was an afterthought, that they were not housed by the applicant, and that none of the stay conditions were met. The court found the application was filed without delay, but rejected the substantial loss argument since the respondents remained employees of the applicant and could be recovered from if the appeal succeeded. Balancing the interests and noting the applicant's willingness to provide security, the court allowed stay of execution conditionally: the applicant to deposit the entire decretal sum in an interest-earning account in the joint names of counsel within 60 days, failing which execution may proceed. No costs order was made. All authorities cited were relied on by the parties, not adopted by 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 application for stay of execution was filed without inordinate delay
  2. 2.Whether the applicant stands to suffer substantial loss if stay is not granted
  3. 3.Whether the applicant is willing to provide security for the due performance of the decree
  4. 4.Whether the intended appeal is arguable and whether stay should issue on conditions

Key legal issues

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01

Whether the three conditions for stay under Order 42 rule 6(2) were satisfied

Holding

Delay was not demonstrated; substantial loss was not convincingly shown but security was offered, so stay was granted conditionally

Reasoning

The court restated the three Order 42 rule 6(2) conditions: absence of delay, demonstration of substantial loss, and security. The applicant filed the application within days of judgment and notice of appeal, so no delay. The claim that respondents were men of straw failed because they remain employees from whom the applicant could recover. The applicant's offer of security persuaded the court to grant a conditional stay balancing the parties' interests.

p. 6
02

Whether the applicant would suffer substantial loss if execution proceeds

Holding

The substantial loss argument was rejected on the facts, as the respondents are employees of the applicant

Reasoning

The applicant argued the Kshs 3,549,270/- decretal sum was colossal and the petitioners were men of straw unable to refund. The court held this was not a good argument given the continuing employment relationship, meaning the applicant could recover any sums paid should the appeal succeed. Substantial loss was therefore not squarely established, though the court tempered this by requiring a deposit as security.

p. 6

Legal principles established

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  • Stay of execution pending appeal may be granted conditionally upon deposit of the decretal sum as security, with execution to proceed in default
  • Where the decree holders are employees of the applicant, allegations that they are men of straw who cannot refund the decretal sum are weak grounds for stay

Court orders

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  1. 1.Stay of execution of the judgment delivered on 31st May 2022 by Hon. Lady Justice H. Wasilwa is granted on condition that the applicant deposits the entire decretal sum in an interest earning account held in the joint names of counsel on record within 60 days
  2. 2.In default of the deposit, execution may proceed

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 and Order 51 rule 1 of the Civil Procedure Rules 2010; sections 1A, 1B and 3A of the Civil Procedure Act, cap 21

Relief refused

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Unconditional stay of execution pending appeal

Stay granted only conditionally; the respondents are employees of the applicant and can be recovered from, so unconditional stay was not warranted

p. 6

Costs of the application (not expressly awarded to either party)

The ruling makes no provision for costs of the application

Costs

No costs order made; the ruling is silent on costs

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.

i will allow stay of execution on the condition that the applicants deposits the entire decretal sum in an interest earning account held in joint names of counsels on record within 60 days.
p. 6Final orders - conditional stay of execution
In default execution may proceed.
p. 6Final orders - default position on failure to deposit security
Under order 42 rule 6(2) of the CPC stay orders are granted based on satisfying 3 conditions first being no delay, secondly in demonstrating that if the application is not allowed the applicants stand to suffer. Lastly the issue of security for Judgment is important.
p. 6Conditions for stay of execution pending appeal
This per se is not a good argument given that the respondents are all employees of the applicant and so the applicants are still in a position to recover what they are owed if the appeal succeeds.
p. 6Substantial loss - men of straw allegation rejected

Issues in the judgment

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minor

The ruling refers to the same parties inconsistently - the respondent company is called both 'respondent/applicant' and 'applicant', while the petitioners are called both 'petitioners' and 'respondents', creating potential confusion over roles

minor

The case number and the names of the parties are not stated anywhere in the ruling, limiting identification of the underlying suit

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, "Marango & 122 others v Kedong Ranch Limited (Petition E009 of 2020) [2022] KEELRC 4144 (KLR)", Case Analysis (2022). Not stated in the ruling. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2022/4144/eng@2022-09-29

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