[2020] KEELRC 315 (KLR)
The court found that the claimant had not demonstrated compliance with section 560(1)(d) of the Insolvency Act, which restricts the commencement or continuation of legal proceedings against a company under administration without the consent of the administrator or court approval. Since the respondent was under...
Source-derived case information.
- Citation
- [2020] KEELRC 315 (KLR)
- Parties
- Claimant: Clement Nderitu; Respondent: ARM Cement Limited
- Court
- Employment and Labour Relations Court
- Court Station
- Employment and Labour Relations Court at Nairobi
- Jurisdiction
- Kenya
- Case Number
- Cause 1668 of 2015
- Procedural Posture
- Employment Cause / Ruling on Preliminary Objection
- Outcome
- preliminary objection upheld; proceedings stayed
- Judges
- MSA Makhandia
- Legal Topics
- Unfair Termination, Insolvency Proceedings, Stay of Proceedings
- Source Language
- en
Source-derived case record
Summary, issues, holding and outcome
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Parties
Clement Nderitu
Claimant
ARM Cement Limited
Respondent
Procedural Posture
Employment Cause / Ruling on Preliminary Objection
Legal Issues
- 1 Whether the proceedings against a company under administration can continue without the consent of the administrator or approval of the court.
- 2 Whether the claimant complied with section 560 of the Insolvency Act before continuing with the proceedings.
Ratio Decidendi
The court found that the claimant had not demonstrated compliance with section 560(1)(d) of the Insolvency Act, which restricts the commencement or continuation of legal proceedings against a company under administration without the consent of the administrator or court approval. Since the respondent was under administration and the claimant had neither sought nor obtained the required consent or approval, the court upheld the preliminary objection and ordered a stay of proceedings until further directions are given.
Court Disposition
preliminary objection upheld; proceedings stayed
Orders
- The cause herein be stayed until further directions are given.
- Parties at liberty to apply.
Full Case Text
Judgment text and source record
27 paragraphs
REPUBLIC OF KENYA
IN THE EMPLOYMENT AND LABOUR RELATIONS COURT AT NAIROBI
CAUSE NO. 1668 OF 2015
CLEMENT NDERITU....................................CLAIMANT
VERSUS
ARM CEMENT LIMITED.........................RESPONDENT
RULING
1. Clement Nderitu (Claimant) instituted these legal proceedings against ARM Cement Ltd (Respondent) on 21 September 2015 and he stated the Issue in Dispute as
Unfair and unlawful termination of employment of Clement Nderitu.
2. On 17 August 2018, the Respondent was placed under administration by dint of section 560 of the Insolvency Act.
3. The Respondent thereafter filed a Notice of Preliminary Objection dated 29 June 2020 seeking that the Cause be stood over until compliance with the requirements of section 560 of the Insolvency Act.
4. Pursuant to directions issued by the Court on 30 June 2020, the Respondent filed submissions on the Objection on 24 August 2020 (should have been filed before 3 July 2020) while the Claimant’s submissions were not on record by 10 July 2020 as directed.
5. The Court has considered the objection and the submissions.
6. Section 560(1)(d) of the Insolvency Act provides that
A person may begin or continue legal proceedings (including execution and distress) against the company under administration or the company’s property only with the consent of the administrator or with the approval of the court.
7. The Claimant did not deny that he had been alerted that the Respondent was placed under administration. He has not demonstrated that he has or had attempted to utilise the aforesaid provision of law which places a restriction in continuing legal proceedings against a company under administration.
8. The Court consequently upholds the Notice of Preliminary Objection and orders
(a) The Cause herein be stayed until further directions are given.
(b) Parties at liberty to apply.
9. Costs in the cause.
Delivered through Microsoft teams, dated and signed in Nairobi on this 2nd day of October 2020.
Radido Stephen
Judge
Appearances
For Claimant Kiarie, Kabita, Kihunyu & Associates Advocates
For Respondent Andrew & Steve Advocates
Court Assistant Judy Maina