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ELRCPartially AllowedEmployment and Labour Relations Cause E003 of 2023· [2026] KEELRC 2601 (KLR)

Dunman v Athi Stores Limited

Employment and Labour Relations Court of Kenya
25 September 2026
HWHS WASILWA
2,526 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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A Kenyan employment court set aside a Kshs. 3.95 million default judgment against a company, but only on strict payment conditions.

What this practically means

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Executive summary

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In this ruling, the Employment and Labour Relations Court at Machakos (Wasilwa J) determined a Notice of Motion dated 16th March 2026 by Athi Stores Limited seeking to set aside an ex parte interlocutory and final judgment of 19th December 2024, under which it was condemned to pay Charles Dunman Kshs. 3,950,000 with interest. The Applicant contended it was never served with pleadings or summons and learned of the judgment only on 21st May 2025 through WhatsApp, arguing the judgment was irregularly obtained on a false affidavit of service and should be set aside ex debito justitiae, with a stay of execution and leave to file a defence. The Claimant opposed, relying on affidavits of service (CD-1 to CD-10), asserting the judgment was regular, and attacking the applicant's nearly ten-month delay as inordinate and the draft defence as mere denials; he sought dismissal or, alternatively, a conditional setting aside upon deposit of the full decretal sum. Both parties filed extensive submissions citing authorities on setting aside ex parte judgments, including Shah v Mbogo, Patel v EA Cargo Handling, Sebel District Administration and Leiyagu. The court found that the averment of non-service was without proof, the affidavits of service establishing service. Nonetheless, to ensure justice is done and seen to be done and to allow the respondent to defend the case, the court allowed the application and set aside the ex parte judgment on conditions: payment of thrown away costs of Kshs. 100,000 to the claimant and deposit of the awarded amount in a joint interest-earning account in the joint names of counsel within 60 days, failing which the judgment would stand reinstated and execution proceed. Costs were awarded in the cause. The application succeeded conditionally.

Key legal issues

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01

Sufficiency of cause for setting aside the ex parte judgment

Holding

The court exercised its discretion in favour of setting aside notwithstanding its finding that the averment of no service lacked proof

Reasoning

The court found the affidavits of service established service, so the applicant's claim of non-service was unproved. Nonetheless, invoking the interest of justice and natural justice, the court chose to set aside the judgment so the respondent could defend the claim, imposing conditions of thrown away costs and a deposit of the decretal sum within 60 days to protect the claimant.

p. 5
02

Conditional setting aside and reinstatement upon default

Holding

Judgment set aside on condition of thrown away costs and deposit of the decretal amount in a joint interest-earning account within 60 days, failing which the judgment stands reinstated

Reasoning

Balancing the applicant's right to be heard against the claimant's interest in the fruits of judgment, the court attached two conditions: thrown away costs of Kshs. 100,000 and deposit of the awarded sum in a joint interest-earning account in the joint names of counsel within 60 days, with automatic reinstatement of judgment and execution upon default.

p. 5

Legal principles established

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  • A court may set aside an ex parte judgment, even where service is asserted, to ensure justice is done and seen to be done, on conditions protecting the decree holder

Court orders

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  1. 1.Application allowed; the ex parte judgment entered on 19th December 2024 is set aside
  2. 2.Respondent/Applicant to pay the claimant thrown away costs of Kshs. 100,000
  3. 3.Respondent to deposit the amount awarded in a joint interest-earning account in the joint names of counsels on record within 60 days, in default the judgment will stand reinstated and execution may proceed
  4. 4.Costs in the cause

Authorities

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Legislation

  • Employment and Labour Relations Court (Procedure) Rules, 2016Rule 16
  • Employment and Labour Relations Court (Procedure) Rules, 2024Rules 31 and 34
  • Civil Procedure Rules, 2010Order 10 Rule 11
  • Civil Procedure Rules, 2010Order 22 Rules 22 and 25
  • Civil Procedure ActSections 1A and 1B
  • Constitution of Kenya, 2010Article 50

Cases cited (14)

  • John Gachanja Mundia v Francis Muriira Alias Francis Muthika & another
    [2016] eKLR

    Courts should take the wider sense of justice in interpreting prescriptions of law for grant of relief under the overriding objective

  • Victory Construction v BM (a minor suing through next friend one PMM)
    [2019] eKLR

    Weighing proportionality and equality of arms; opting for the lower rather than higher risk of injustice

  • Cecilia Wanja Waweru v Jackson Wainaina Muiruri & another
    [2014] eKLR

    Cited as adopting Leiyagu on the right to a hearing and proportionality

  • Richard Nchapi Leiyagu v Independent Electoral & Boundaries Commission & 2 others
    [2014] eKLR

    Right to hearing is well protected and cornerstone of rule of law; dismissals should protect integrity of court process with proportionality

  • Wachira Karani v Bildad Wachira
    [2016] eKLR

    Discretion to set aside ex parte judgments exists to prevent injustice from excusable mistake or inadvertence

  • CMC Holdings Ltd v James Mumo Nzioki
    [2004] eKLR

    Discretion to set aside ex parte judgment to prevent injustice

  • Sebel District Administration v Gasyali & Others
    [1968] eKLR

    Denying a hearing should be the last resort; party may defend upon payment of costs occasioned by delay

  • Patel v E.A. Cargo Handling Services Ltd
    [1974] EA

    Court will not set aside a regular judgment unless a defence raises a triable issue

  • James Wanyoike & 2 others v C M C Motors Group Limited & 4 others
    [2015] eKLR

    Setting aside regular judgment requires a defence disclosing a prima facie triable issue

  • Shah v Mbogo & Another
    [1967] EA 116

    Discretion to set aside exists to prevent injustice, not to assist a party deliberately obstructing justice

  • Price & Another v Hilder
    [1986] KLR 95

    Affirming Shah v Mbogo principle on setting aside ex parte judgment

  • Njagi Kanyunguti & 4 Others v David Njeru Njogu
    CA No. 181 of 1994

    Affirming Shah v Mbogo principle

  • James Kanyiita Nderitu & another v Marios Philotas Ghikas & another
    [2016] eKLR

    Distinguished on irregular vs regular judgment; sufficient cause required

  • Kenya Commercial Bank Ltd v Nyataige & another
    [1990] KEHC 50 (KLR)

    Judicial discretion ought to be exercised to prevent injustice

Jurisdiction invoked
Inherent jurisdiction of the Employment and Labour Relations Court to set aside ex parte judgment, under the ELRC (Procedure) Rules read with Order 10 Rule 11 of the Civil Procedure Rules

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, "Dunman v Athi Stores Limited", Case Analysis (2026). Employment and Labour Relations Cause E003 of 2023. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2026/2601/eng@2026-09-25

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