[2022] KEELRC 781 (KLR)
The Court found that there was no executed renewed contract between the parties at the time the Claimant obtained the ex parte orders. The Claimant was aware that only a recommendation for renewal existed, and that the full Board had resolved not to renew his contract prior to his application for injunctive relief....
Source-derived case information.
- Citation
- [2022] KEELRC 781 (KLR)
- Parties
- Applicant: Dr. Charles Kirimi Mbui; Respondent: Kenya Tea Development Agency Holdings Limited
- Court
- Employment and Labour Relations Court
- Court Station
- Employment and Labour Relations Court at Nairobi
- Jurisdiction
- Kenya
- Case Number
- Cause E809 of 2021
- Procedural Posture
- Employment Cause / Ruling on Interlocutory Injunction and Application to Set Aside Ex Parte Orders
- Outcome
- Application declined; ex parte orders discharged.
- Judges
- J Rika
- Legal Topics
- Contract Renewal, Legitimate Expectation, Injunctive Relief, Board Resolutions
- Source Language
- en
Source-derived case record
Summary, issues, holding and outcome
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Parties
Dr. Charles Kirimi Mbui
Applicant
Kenya Tea Development Agency Holdings Limited
Respondent
Procedural Posture
Employment Cause / Ruling on Interlocutory Injunction and Application to Set Aside Ex Parte Orders
Legal Issues
- 1 Whether the Claimant had an enforceable renewed contract as Managing Director as of 8th June 2021.
- 2 Whether the Claimant was entitled to interim injunctive relief restraining termination and recruitment of a new Managing Director.
- 3 Whether the Claimant made full disclosure of material facts when seeking ex parte orders.
Ratio Decidendi
The Court found that there was no executed renewed contract between the parties at the time the Claimant obtained the ex parte orders. The Claimant was aware that only a recommendation for renewal existed, and that the full Board had resolved not to renew his contract prior to his application for injunctive relief. The Claimant failed to make full disclosure of these material facts to the Court. The recommendations of the Board Nomination and Remuneration Committee did not bind the full Board, and no contract renewal document was offered or executed. The Claimant's recourse, if any, lies in pursuing a claim for legitimate expectation or damages, not in restraining the Respondent from...
Court Disposition
Application declined; ex parte orders discharged.
Orders
- The Application by the Claimant filed on 29th September 2021 is declined and the orders issued on 29th September 2021 discharged.
- No order on the costs.
Full Case Text
Judgment text and source record
33 paragraphs
REPUBLIC OF KENYA
IN THE EMPLOYMENT AND LABOUR RELATIONS COURT
AT NAIROBI
CAUSE NO. E809 OF 2021
BETWEEN
DR. CHARLES KIRIMI MBUI..................................................................................CLAIMANT
VERSUS
KENYA TEA DEVELOPMENT AGENCY HOLDINGS LIMITED................RESPONDENT
RULING
1. The Claimant obtained an order of interim injunction, on 29th September 2021, restraining the Respondent from terminating the Claimant’s contract as the Managing Director of the Respondent, ‘’ which was renewed on 8th June 2021,’’
2. Pending hearing inter partes, the Respondent was barred from recruiting a new Managing Director.
3. The Application is supported mainly by the Minutes of Respondent’s Board Nomination and Remuneration Committee Meeting, held on 8th June 2021. Min: 08/2021 indicates the subject of the Claimant’s contract renewal was discussed at length, with the recommendation that: -
§ The Claimant will attain mandatory retirement age of 60 years on 15th September 2025.
§ In light of this it is hereby recommended that his contract be renewed for a further period of 3 years and 11 months [1st October 2021 to 15th September 2025]. His terms and conditions of employment remain the same.
4. The Respondent immediately filed an Application under Certificate of Urgency on 18th October 2021 asking the Court to set aside the ex parte orders issued on 29th September 2021. The Respondent also filed a Replying Affidavit, sworn by Group Company Secretary Patrick Ngunjiri, on 18th October 2021.
5. The Application by the Respondent, and the Replying Affidavit are essentially a response to the initial Application by the Claimant.
6. The Court directed that the Parties file Written Submissions, with a Ruling to be delivered on 18th February 2022.
7. Submissions are confirmed to have been filed and served.
The Court Finds: -
8. There was no renewed contract executed between the Parties, at the time the Claimant obtained the orders on 29th September 2021, alleging the contract was renewed on 8th June 2021.
9. There was only in place, a recommendation of the Board Nomination and Remuneration Committee, dated 8th June 2021, for renewal of the contract for a further period of 3 years and 11 months.
10. The Claimant was aware there was no renewal at the time he came before the Court, but only a recommendation for renewal. On 6th September 2021, about 2 weeks before he approached the Court, he wrote an Internal Memo to the Respondent’s Chair, stating that the Nomination and Remuneration Committee, had considered and approved renewal of his contract. He asked the Chair, to have contract renewal documents processed and availed to him for his execution. Quite clearly, no renewal had been granted, at the time the Claimant claimed it had been, 8th June 2021.
11. He was aware at time of writing his Internal Memo of a letter dated 3rd September 2021 from the Respondent to him, advising that the full Board met on 31st August 2021, and resolved not to renew his contract. He was advised that his contract dated 2nd August 2018, would expire on 31st September 2021, and that he would be paid his dues, up to and including this date.
12. The Claimant was aware that the Board, did not go by the recommendations of the Nomination and Remuneration Committee. He has not shown that the Board was bound by those recommendations. He was not offered a contract document on renewal and did not execute any such document.
13. At most the recommendations would found a Claim for legitimate expectation of renewal. It is one thing to legitimately expect renewal of a contract, and quite another, to have renewal of a contract. The Claimant gives particulars of legitimate expectation at paragraph 11 of his Statement of Claim. He pleads special loss and damages. These are avenues he can pursue, without seeking to impose fresh contractual obligations on the Parties, or restraining the Respondent from moving on, and filling the crucial docket of its Managing Director.
14. Why a Committee comprising top echelons of the Respondent’s Board, would recommend renewal of the contract, only to be overruled by the full Board, is indicative of internecine strife within the Respondent. Wilson G. Muthaura for example, sat in the Nomination and Remuneration Committee on 8th June 2021, which recommended renewal of the contract, and is the same Officer who wrote to the Claimant on 13th September 2021, advising the Claimant that his contract would not be renewed. The Respondent appears to be in the grip of internecine strife, but this is not for the Court to adjudicate for now.
15. The Court is satisfied that the orders of 29th September 2021, issued against the background of failure by the Claimant to make full disclosure of material facts.
IT IS ORDERED: -
a. The Application by the Claimant filed on 29th September 2021 is declined and the orders issued on 29th September 2021 discharged.
b. No order on the costs.
DATED, SIGNED AND RELEASED TO THE PARTIES ELECTRONICALLY AT NAIROBI, UNDER THE MINISTRY OF HEALTH AND JUDICIARY COVID-19 GUIDELINES, THIS 18TH DAY OF FEBRUARY 2022.
JAMES RIKA
JUDGE