https://new.kenyalaw.org/akn/ke/judgment/keelrc/2026/1671

**REPUBLIC OF KENYA** **IN THE EMPLOYMENT & LABOUR RELATIONS COURT AT NAIROBI** **CAUSE NO. 1098 OF 2016** **LILIAN WACHORO KARIUKI………CLAIMANT/DECREE HOLDER** **VERSUS** **SUMMIT HEALTH LIMITED……RESPONDENT/JUDGMENT DEBTOR** **AND** **SUMMER HEALTH MEDICAL** **LIMITED ………………………………..AFFECTED PARTY/APPLICANT** **RULING** 1. Before Court is the Applicant/Affected Party’s Motion application dated 6th February, 2026, brought pursuant to Articles 50(1), 159(2)(d) and 165(3) of the Constitution of Kenya, 2010, Sections 1A, 1B and 3A of the Civil Procedure Act (Cap 21), Order 42 Rule 6, Order 45 Rule 1, Order 51 Rule 1 and Order 22 of the Civil Procedure Rules, 2010. The Applicant seeks orders THAT: - 2. Spent 3. This Honourable Court be pleased to enjoin Summer Health Medical Limited in these proceedings as an Affected Party for purposes of the execution dispute and the orders sought herein pursuant to Order 1 Rule 10(2) of the Civil Procedure Rules, 2010. 4. This Honorable Court be pleased to review, vary, and or set aside the order made on 9th April, 2024, to the extent that it directed that the application dated 8th February, 2023, and or execution be pursued against Summer Health Medical Limited, and to substitute therefor an order that execution, if any, shall proceed against the judgment debtor named in the decree, Summit Health Limited. 5. This Honourable Court be pleased to set aside and or recall any warrants of attachment and sale, proclamations, notifications of sale, or any other execution process issued, served, or undertaken against Summer Health Medical Limited, pursuant to and/ or in reliance on the order of 9th April, 2024. 6. Pending the hearing and determination of this application, and without prejudice to the foregoing, this Honourable Court be pleased to issue such further protective orders as are necessary to preserve the tools of trade of Summer Health Medical Limited and its business assets from unlawful execution. 7. Costs of this application be in the cause or as the Court may order. 8. The application is supported by grounds on the face thereof and the affidavit of **BEATRICE WANGARI KARIUKI,** sworn on 6th February, 2024. The Applicant avers that a judgment and decree were issued on 20th July 2018 against Summit Health Limited, and not Summer Health Medical Limited. 9. It avers that Summer Health Medical Limited is a separate legal entity under the Companies Act, 2015, and was not a party to the proceedings, and is therefore not the Judgment Debtor named in the decree. 10. It is the Applicant’s position that the Court order of 9th April 2024 directed that the application dated 8th February 2023 be pursued against Summer Health Medical Limited, and this order is now being relied upon to attach and sell its assets. 11. The Applicant argues that the order of 9th April 2024 should be reviewed or set aside under Order 45 Rule 1 of the Civil Procedure Rules and Section 3A of the Civil Procedure Act to prevent a miscarriage of justice. The Applicant further contends that the sale agreement relied upon to justify proceedings against Summer Health Medical Limited was never completed, no transfer of assets or liabilities occurred, and therefore no legal basis exists to hold Summer Health Medical Limited liable for the decree. 12. The Applicant contends that the factual basis for redirecting execution to Summer Health Medical Limited is erroneous, as there is no evidence that it assumed the assets or liabilities of Summit Health Limited. It is further states that Rose Catherine Muthoni, a Co-director of Summit Health Limited, failed to provide any transaction records or money trail demonstrating transfer of assets or liabilities to Summer Health Medical Limited, thereby leaving her claims unsubstantiated despite the Court issuing orders against Summer Health Medical Limited on that basis. 13. The Applicant also asserts that Rose Catherine Muthoni remains a director of Summit Health Limited and has not exited the company, and the allegations made in her Replying Affidavit were fabricated with the intention of evading liability and maliciously shifting blame to Summer Health Medical Limited following a dispute with her Co-director, Beatrice Wangari Kariuki. 14. The Applicant maintains that it stands to suffer substantial loss within the meaning of Order 42 Rule 6 of the Civil Procedure Rules, 2010, as attachment and execution against its assets would disrupt its business operations and occasion irreparable harm, rendering the application nugatory if execution proceeds. 15. The Applicant states that the application was filed without undue delay immediately upon learning of the execution process and imminent attachment. It further maintains that, in the interests of justice and in line with Articles 48, 50(1), and 159(2)(d) of the Constitution of Kenya, 2010, the Court ought to preserve the subject matter and prevent execution against a party that is not the judgment debtor pending determination of the legality of the orders issued on 9th April 2024. 16. The Claimant/decree holder/Respondent herein opposed the application vide a Replying affidavit dated 10th March, 2026. The deponent states that the application was brought in bad faith, arguing that the Affected Party was aware of the proceedings but deliberately chose not to participate despite being served with summons, mention notices, and hearing notices. 17. She further avers that the Affected Party is acting mischievously and employing tactics intended to frustrate execution of the decree issued in favour of the Claimant. The Claimant/Respondent maintains that the application is frivolous, lacks merit, and is intended solely to waste judicial time. 18. The Claimant therefore urges that the Court dismiss the application in the interests of justice and allow the Claimant to enjoy the fruits of her judgment. **Determination** 1. The issues arising for my determination are: - 2. Whether Summer Health Medical Limited should be joined as an Affected Party. 3. Whether the orders issued on 9th April 2024 are amenable to review, variation, or setting aside 4. Whether execution against Summer Health Medical Limited should be stayed and/or set aside. **Whether Summer Health Medical Limited should be joined as an Affected Party** 1. Order 1 Rule 10(2) of the Civil Procedure Rules grants the Court discretion to add any person whose presence is necessary in order to enable the court effectually and completely adjudicate upon and settle all questions involved in the suit. The Supreme Court in ***Trusted Society of Human Rights Alliance v Mumo Matemu & 5 Others*** ***[2014] KESC 6 (KLR)***, emphasized that joinder is appropriate where a party demonstrates a proximate interest in the matter and where its participation is necessary for complete adjudication of the dispute. 2. The Applicant herein is the entity against which execution is sought to be levied, yet it contends that it is not the judgment debtor named in the decree. 3. On this simple and straight forward reason, the Court is satisfied that the intended execution directly affects its proprietary and business interests, and its participation is therefore necessary to enable the Court conclusively determine the legality of the execution process. 4. Accordingly, the prayer for joinder is found to have merit, and the same is allowed. **Whether the orders issued on 9th April 2024 are amenable to review, variation, or setting aside** 1. On whether the orders of 9th April 2024 ought to be reviewed or set aside, Rule 74 of the Employment and Labour Relations Court (Procedure) Rules of 2024 permits review where there is discovery of new and important matter, an error apparent on the face of the record, or for any other sufficient reason. 2. In ***National Bank of Kenya Limited v Ndungu Njau [1997] KECA 389 (KLR),*** the Court held thatreview may issue where there is a clear error or omission apparent on the face of the record, but not where a party merely seeks to re-argue its case. 3. It is not disputed that the decree on record was issued against Summit Health Limited. The Applicant has placed before Court material asserting that Summer Health Medical Limited is a separate legal entity incorporated under the Companies Act and was not a party to the proceedings culminating in the judgment herein. 4. The principle of separate corporate personality, as established in ***Salomon v A Salomon & Co Ltd [1897] AC 22,*** remains applicable in Kenya and dictates that a company is distinct from its shareholders, directors, or related entities. 5. Execution cannot therefore ordinarily issue against a non-party unless there is a lawful basis for lifting the corporate veil, proof of transfer of liabilities, or evidence establishing successor liability. 6. The material placed before the Court does not demonstrate, on a prima facie basis, that the assets and liabilities of Summit Health Limited were legally transferred to Summer Health Medical Limited. The Applicant disputes the alleged sale agreement and contends that no completion occurred. Further, no documentary evidence, such as transfer instruments, audited accounts, transactional records, or assumption-of-liability agreements, has been exhibited to conclusively demonstrate that Summer Health Medical Limited assumed the liabilities of the judgment debtor. 7. Further, while the Respondent argues that the Applicant was aware of the proceedings and deliberately stayed away, the Court notes that awareness of proceedings alone cannot justify execution against an entity not named in the decree without a proper legal foundation. 8. The Court must guard against execution proceedings that may violate the right to a fair hearing under Article 50(1) of the Constitution. 9. In the premise, I find and hold that the Applicant has shown sufficient reason to justify review of the orders of 9th April, 2024. **Whether execution against Summer Health Medical Limited should be stayed and/or set aside**. 1. On stay of execution, the principles under Order 42 Rule 6 require demonstration of substantial loss, that the application was made without undue delay, and provision of security where appropriate. 1. In ***Butt v Rent Restriction Tribunal [1979] KECA 22 (KLR)***, the Court held that the power to grant stay is discretionary and should be exercised in a manner that prevents an appeal or application from being rendered nugatory. 2. The Applicant herein has demonstrated that attachment and sale of its business assets would disrupt its operations despite it not being the named judgment debtor. If execution proceeds before the legality of the impugned orders is determined, the application may indeed be rendered nugatory. 3. The Court is therefore persuaded that sufficient cause has been shown to warrant protective intervention. Accordingly, the Court makes the following orders: - 4. That Summer Health Medical Limited be and is hereby joined to the suit as an affected party. 5. That the order issued on 9th April 2024, in so far as it directed that execution and/or the application dated 8th February 2023 be pursued against Summer Health Medical Limited, is hereby reviewed and set aside pending proper determination of liability, if any, against the said entity. 6. That any warrants of attachment, proclamations, notifications of sale, or execution processes issued against Summer Health Medical Limited pursuant to the order of 9th April 2024 are hereby recalled and set aside. 7. That a stay of execution is hereby granted against the judgment and decree in this matter as against Summer Health Medical Limited 8. Finally, that execution, if any, shall proceed only against the judgment debtor named in the decree unless otherwise lawfully ordered. 9. I make no orders on costs. 10. It is so ordered. **SIGNED, DATED, AND DELIVERED BY VIDEO-LINK AND IN COURT AT NAIROBI THIS 18TH DAY OF JUNE, 2026.** **C. N. BAARI** **JUDGE** **Appearance:** Mrs. Njau present for the Claimant Mr. Ndirangu present for the Respondent Mr. Okumu present for the Affected Party Ms. Esther S- C/A