Automated Summary
Key Facts
The Employment and Labour Relations Court in Kenya (ELRCA No. E197 of 2025) ruled on an appeal by CALE Infrastructure Construction Co. Ltd seeking a stay of execution pending appeal. The applicant argued it would suffer substantial loss if the 1st Respondent (Francis Onyango Oyiengo) proceeds with public auction of assets, as the respondent lacks sources of income or attachable assets. The court granted the stay, finding the applicant complied with conditions by depositing half the decretal sum as security and that the appeal raises triable issues. The stay remains in effect until the appeal is determined, with a mention date set for November 24, 2025.
Issues
- The court evaluated if the applicant demonstrated substantial loss as required under Order 42 Rule 6(2)(a). The applicant claimed potential irreparable loss if the decree was executed, but the respondent argued this was speculative. The court found the applicant had shown likely substantial loss by depositing half the decretal sum as security, aligning with the guidance in the Butt case.
- The court assessed if the applicant provided security for the decree. The applicant deposited half the decretal sum, which the court accepted as sufficient security under the Civil Procedure Rules, fulfilling the mandatory requirement for the stay.
- The court determined the arguability of the appeal. The memorandum of appeal raised triable issues regarding a fair hearing in the lower court. The court, guided by the Butt case, concluded the appeal was arguable enough to prevent it from being nugatory if not stayed.
Holdings
- The court held that the applicant failed to demonstrate substantial loss under Order 42 Rule 6(2)(a) but found the respondent did not prove their financial ability to refund the decretal sum. The court emphasized that the applicant's lack of clean hands, due to unsubstantiated allegations against the respondent, did not outweigh the need to preserve the appeal's viability.
- The court determined that the applicant had complied with the mandatory condition of providing security by depositing half of the decretal sum in court as required under Order 42 Rule 6 of the Civil Procedure Rules. The court found that the memorandum of appeal raised triable issues concerning a fair hearing before the lower court, supporting the applicant's right to pursue the appeal without being denied access. The court allowed the application for a stay of execution of the judgment dated 1st October 2024 and all consequential orders, pending the hearing and determination of the appeal, citing the need to prevent the appeal from being nugatory.
Remedies
- The court upheld the deposited ½ decretal sum as security for the stay of execution, as required under the Civil Procedure Rules.
- The court ordered a mention before the Court Hon Deputy Registrar on 24th November 2025 for the purpose of monitoring the filing of a record of appeal.
- The court allowed the application and issued an order of stay execution of the judgment entered on 1st October 2024 and all consequential orders thereto, pending the appeal's determination.
Legal Principles
- The principle of 'clean hands' was applied, requiring the applicant to approach the court with good faith. This was referenced in Econet Wireless Kenya Ltd v Minister for Information & Communication & Another (Nairobi Civil Application No. 28 of 2018), where unsubstantiated allegations against the respondent were deemed scandalous and disentitled the applicant to relief.
- The standard of proof required for granting a stay of execution was outlined as needing concrete evidence of harm. The court cited cases such as G. N. Muema C.B.K v Samuel Kamau Macharia & Another [2012] eKLR, where vague assertions were deemed insufficient to meet the legal threshold.
- The court emphasized that the applicant must bear the burden of proving substantial loss and the respondent's inability to refund the decretal sum. This was highlighted in cases like James Wangalwa & Another v Agnes Naliaka Cheseto [2012] eKLR and Tropical Africa Co. Ltd v J. K. Limited [1986] KLR 410, where the applicant must demonstrate specific harm rather than mere speculation.
Precedent Name
- Mrao Ltd v First American Bank of Kenya Ltd & 2 Others
- Tropical Africa Co. Ltd v J. K. Limited
- Catherine Wanjiru Karanja & 2 Others v James Kiarie Githinji
- Century Oil Trading Company Ltd vs. Kenya Shell Limited
- James Wangalwa & Another v Agnes Naliaka Cheseto
- National Industrial Credit Bank Ltd vs Aquinas Francis Wasike and Another
- Victoria Commercial Bank Ltd v Jagjit Singh Kalsi & Another
- Butt vs Rent Restriction Tribunal
- Kenya Shell Ltd v Kibiru & Another
- Chandaria v Mungai
- Arun C. Sharma v Raikundalia & Co. Advocates & 2 Others
- G. N. Muema C.B.K v Samuel Kamau Macharia & Another
- Mohsin Ali Naurashi v Kharidini (K) Limited
- Mercury Capital Partners II LP & another v 4G Capital Limited & 4 others
Cited Statute
- Employment and Labour Relations Court (Procedure) Rules
- Evidence Act, Chapter 80
- Civil Procedure Act and Rules
Judge Name
Lady Justice J.W. Keli
Passage Text
- The court found the applicant had already complied with the interim order on the deposit of ½ of the decretal sum in court as security under section 42(6) of the Civil Procedure Rules a mandatory condition for grant of stay of execution order.
- The court for the foregoing reasons, allows the application. That this Honourable Court be pleased to issue order of stay execution of the judgement entered on 1st October 2024 and all other consequential orders thereto pending the hearing and determination of the intended Appeal.
- Where execution of a money decree is sought to be stayed, in considering whether the applicant will suffer substantial loss, the financial position of the applicant and that of the respondent becomes an issue. The court cannot shut its eyes where it appears the possibility is doubtful of the respondent refunding the decretal sum in the event that the applicant is successful in his appeal.