[2017] KEELRC 371 (KLR)

REPUBLIC OF KENYA

IN THE EMPLOYMENT AND LABOUR RELATIONS COURT OF KENYA AT NAIROBI

CAUSE NO.1898 OF 2016

FARIDA NAKAWOOYA ……………………….……. CLAIMANT

VERSUS

BAKER HUGHES EHO LIMITED………………...RESPONDENT

RULING

1. The claimant, by application and Notice of Motion dated 3rd November, 2016 is seeking for orders that;

The respondent do furnish security for the likely award in the claim by depositing the sum of Kshs.11, 494,138/= in court within 7 days.

In default Warrant be issued to an Auctioneers to execute against the respondents to recover the sum of Kshs.11, 494,138/= and deposit the said monies in court pending the full and final hearing of this case.

The respondent do bear costs of this application.

2. The application is supported by the claimant’s affidavit and on the grounds that the respondent is being acquired by General Electric Company and will cease operating in the country. The respondent is in the process of shipping off its assets and abandoning operation in Kenya and there is reliable information that where the respondent is allowed to close and ship out its assets, and its directors being foreigners they will leave jurisdiction and evade justice in this case.

3. In the affidavit the claimant avers that on 1st June, 2011 was employed as a field engineer-Drill Bit Systems and was terminated from the employment on 31st May, 2016 without a justifiable cause. Being aggrieved the claimant filed claim herein. Since, the claimant has read in the Wall Street Journal and Bloomberg.com that the respondent has entered into an agreement with General Electric Company to acquire its oil and gas business. This case is being intentionally delayed to defeat justice.

4. The claimant also avers that in September, 2016 the respondent began shipping its drilling equipment out of the country with intention to close down operations in the country. Some current staff have been called for computation of their final dues before close down. The current employees are not at work on daily basis as the respondent are preparing for exit.

5. The claimant was unfairly declared redundant and terminal dues not computed correctly. The respondent has not replied to the memorandum of claim and with knowledge of on-going efforts to leave the jurisdiction of the court, the orders sought should issue.

6. In reply the respondent filed Replying Affidavit sworn by Azeez Rilwan Adetokunboh and dated 2nd December, 2016. Azeez avers that as the Country Operations manager for the respondent is aware that the respondent is incorporated in Bermuda and registered in Kenya as a foreign company with a local branch under section 366 of the Companies Act. The major shareholder is Baker Hughes Nederland’s BV whose major shareholder is Baker Hughes Incorporated.

7. The respondent commenced operations in Kenya in 2013 and has long term goals and commitments in Kenya and has no intention of winding up. There is a renewal lease between Horizons Group Limited and Baker Hughes Eho Ltd until 30th June, 2017 and an on-going contract for provision of casing and tubular running services. The respondent owns assets worth of millions in Kenya. The averments that the respondent is secretly shipping out its assets are without basis. The respondent having a global network uses the same equipment for its related entities across the globe and from time to time ships out equipment to other Baker Hughes entities for use for other customers where needed. This is normal and ordinary in oil drilling, production, test pumping and related services.

8. The transactions between Baker Hughes Incorporated and the merger between General Electric and Baker Hughes incorporated are of no consequence to the respondent whose major shareholder is Baker Hughes Nederlands BV which remains operational and has not sold or merged with any company. The defence by the respondent herein is not affected. Mergers are supposed to strengthen a company as against a takeover. In this case the respondent has not changed.

9. The respondent has in the last year settled related claims and made payments of Kshs.5,809,663. 86 and Kshs.5,672,083. 00 in ELRC.No.1769 of 2015 and ELRC No.2245 of 2015 respectively and following out of court settlements in good faith.

10. Azeez also avers that due to global meltdown in oil prices, the respondent was forced to scale down their operations globally. As a result the respondent was forced to declare some employees redundant including the claimant to be able to sustain on-going operations. The respondent has fully paid the claimant all terminal dues being salary for 2 months’ notice at kshs.960, 000. 00; severance pay for 15 for 5 years worked at kshs.952, 000. 00; 8 days leave pay at Kshs.177, 526. 16. Relocation allowance of Kshs.380, 000. 00 claimed was duly settled by the respondent in November, 2015 and the claim is thus vexatious.

11. The claimant has not made a good case to warrant the orders sought. The claim for Kshs.11, 494,138. 00 is exaggerated and with the aim of forcing the respondent into a settlement. The application should be dismissed with costs.

12. The claimant filed a Further Affidavit dated 13th January, 2017 and avers that in the reply by the respondent there is confirmation that the respondent is fully foreign and the lease coming to an end on 30th June, 2017 which is not evidence of its long term commitment to stay within jurisdiction. There is evidence of the respondent ending other leases and currently is on a shorter lease than in other cases of 5 years. All material presented to show long term commitment is contradictory.

13. The respondent has not denied they are shipping equipment’s out of the country and this conforms that where the claim is successful, of the respondent within the jurisdiction of the court. By delinking the respondent from other companies does not confirm there will be post-merger control in the respondent entity by the current shareholder. Where the orders sought are not allowed, any judgement herein will be rendered nugatory.

14. Both parties filed written submissions and list of authorities.

15. I have put into account the application dated 3rd November 2016, the replying affidavit by the respondent, further affidavit by the claimant and the written submissions in the analysis of the matters set out by the parties.

16. Claimant avers that the respondent has not filed a Reply to the Claim. The respondent has since filed the same on 8th November, 2016.

17. In addressing the question as to whether a party should be ordered to deposit security for the likely award of Kshs.11,494,138. 00 the court is guided by principles laid out by the Court of Appeal in Shah versus Shah (1982) KLR 95 where the court held as follows;

The general rule is that security is normally required from Plaintiffs resident outside the jurisdiction; however a court has a discretion to be exercised reasonably and judicially to refuse to order that security be given.

…

The test on an application for security for costs is not whether the Plaintiff has a prima facie case but whether the defendant has shown a bona fide defence.

18. The other aspects the court must put into account is whether the respondent has evidence of ownership of assets within the jurisdiction of the court which assets would be sufficient to satisfy the judgement amount where awarded as held inCosmos Holidays PLC versus Dhanjal Investments Ltd, HCCC No.112 of 2012that;

Next issue arising is whether Cosmos has any known assets or place of business in Kenya upon which execution for recovery of costs can be levied. From the material placed before the court, there is no evidence of ownership of assets by Cosmos Holding nor existence of a place of business in Kenya. Recovery of such costs would require execution against Cosmos; a company domiciled in the United Kingdom. This would be, as observed above, uneconomical, inconvenient and time consuming given the amounts entailed.

19. In this case the claimant does not contest that upon termination of her employment with the respondent on 31st May, 2016 on account of redundancy was paid salary for 2 months’ notice at kshs.960, 000. 00; severance pay for 15 for 5 years worked at kshs.952, 000. 00; 8 days leave pay at Kshs.177, 526. 16. The fact of a relocation allowance amounting to Kshs. 380,000. 00.

20. In the Memorandum of Claim dated 4th September, 2016 the prayers made is for judgement for among others the payment of;

a) Payment of notice of one month, Kshs.480, 000. 00;

b) Severance at 15 days for each years of service Kshs.1, 803,000

c) Service pay Kshs.1, 109,538

d) Relocation allowance Kshs.380, 000

e) Two months’ salary for unnecessary stay in Kenya Kshs.961, 000

f) Compensation for 12 months Kshs.5, 760,000

g) General damages for psychological, emotional and mental torture Kshs.1, 000,000

h) Costs of the claim

21. With the reply and fact of major parts of the claims thus challenged and the claimant who filed a Further Affidavit having failed to contest that such payments were not effected, the court is bound to look at the merits of the claims for irregular, unfair, unlawful and unconstitutional claims on their merits before placing a sanction for a security deposit by the respondent.

22. However, noting the assertions by the respondents that they are scaling down operations and have as a result been forced to declare various positions redundant and laid off a number of employees, to ensure that there is no delay in hearing the claims made by the claimant; reason demands that the claim be heard on priority.

23. The respondent is bound as an entity and enjoying legal representation to bring to the attention of the court any changing circumstances that may render orders made herein academic. Where the respondent is to close down operations before the conclusion of proceedings herein, counsel and client have a duty to inform the court.

The application by the claim dated 3rdNovember, 2016 is declined noting paragraph 21 and 22 above. Costs in the cause.

Place file with Deputy Registrar for allocation of a hearing date on priority basis.

Delivered in open court at Nairobi this 7th day of November, 2017.

M. MBARU JUDGE

In the presence of:

David Muturi & Nancy Bor – Court Assistants

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