https://new.kenyalaw.org/akn/ke/judgment/keelrc/2026/1921

Macharia v Guaranty Trust Bank (Kenya) Ltd & 3 others (Petition E050 of 2025) [2026] KEELRC 1921 (KLR) (3 July 2026) (Ruling) Neutral citation: [2026] KEELRC 1921 (KLR) Republic of Kenya In the Employment and Labour Relations Court at Nairobi Petition E050 of 2025 JW Keli, J July 3, 2026 Between Charles Macharia Petitioner and Guaranty Trust Bank (Kenya) Limited Respondent and Jubril Adenji 1st Intended Contemnor Milkah Wamae 2nd Intended Contemnor Caroline Tegek 3rd Intended Contemnor Ruling 1.The applicant filed application by way of Notice of Motion dated 17th April 2026 brought under Articles 159 of the Constitution of Kenya; Sections 1A, 1B, 3A, and 12 of the Civil Procedure Act; Rule 45, 47 and 74 of the Employment and Labour Relations Court (Procedure) Rules; Order 51 of the Civil Procedure Rules 2010; and all other enabling provisions of the law seeking for the following orders-a.That this application be certified urgent and be heard on a priority basis, and that service be dispensed with in the first instance.b.That this Honourable Court do issue a temporary injunction restraining the Respondent from whether by himself, his agents, or servants, or Auctioneers from, auctioning, selling, evicting the Petitioner, exercising statutory power of sale, harassing, intimidating and or interfering with the Plaintiff’s quiet and peaceful occupation and ownership on the property, being Ruiru/Kiu Block 2/6616 pending the hearing and determination of this Application.c.That this Honourable Court do issue a temporary injunction restraining the Respondent from whether by himself, his agents, or servants, or Auctioneers from, auctioning, selling, evicting the Petitioner, exercising statutory power of sale, harassing, intimidating and or interfering with the Plaintiff’s quiet and peaceful occupation and ownership on the property, being Ruiru/Kiu Block 2/6616 pending the hearing and determination of this Petition.d.That this Honourable Court be pleased to set aside, vary, and declare void the purported consent order recorded on 20th May 2025 on the grounds that it was not the product of any genuine discussion, negotiation, or mutual agreement between the parties, was recorded suo motu by the court in the absence of any bilateral compromise between the parties, and does not constitute a valid consent order in law.e.That consequent upon the setting aside of the purported consent order in prayer 5 above, this Honourable Court be pleased to declare that the conservatory orders of 2nd April 2025 stand in their original, full, and unqualified terms, and that the termination of the Petitioner's employment on 30th May 2025 was in direct contempt of those orders.f.That the costs of this application be provided for.g.That this Honourable Court be pleased to grant any such further or other relief as it may deem just and appropriate in the circumstances. Grounds of the application 2.The Respondent employed the Petitioner as the Team Leader, Corporate Banking on 1st February 2023. 3.The Petitioner was subjected to various constitutional violations by the Respondent, which prompted the Petitioner to file the present Petition and secured Conservatory Orders dated 2nd April 2025 which stated as follows; “That pending the hearing of this application inter parties and so as to preserve the subject of the Petition, this court be pleased to issue conservatory orders restraining the Respondent from harassing/further harassing/ discriminating, further discriminating or in any manner whatsoever interfering with the Claimant’s employment as Team Leader, Corporate Banking.” 4.The Respondent wilfully disobeyed the court orders and proceeded to dismiss the Petitioner from employment on 30th May 2025, which prompted the Petitioner to file the first contempt application dated 2nd May, 2025. 5.However, vide the Ruling dated 18th December 2025, this Honourable Court determined that the Petitioner's contempt application was procedurally defective for failure to first seek leave to lift the corporate veil before citing the individual officers of the Respondent. 6.Further, this Honourable Court stated that the orders of 2nd April 2025 were allegedly reviewed with the order dated 20th May 2025 which states as follows; “By consent of the parties, the understanding is that the orders of 2nd April, 2025 does not amount to suspension of the contract of employment between the parties and the terms and conditions of service therein.” 7.The Respondent as well as the contemnors were aware of the Orders of 2nd April, 2025 and they knowingly and intentionally disobeyed the conservatory orders thereof. 8.The Petitioner avers that he was not involved with entering into consent with the Respondent on the orders dated 20th May 2025. The petitioner states that the consent order was not a product of any prior discussion, negotiation or mutual agreement between the parties and the orders were recorded suo motu by the Court based on counsel’s oral response to a judicial question without a meeting of the minds. 9.Furthermore, without prejudice to the foregoing, even if the consent order dated 20th May 2025 were valid, it was inherently incapable of practical implementation. The order was recorded on 20th May 2025, which was the final day of the PIP period, and could not retroactively revive or extend a process that had already concluded. 10.At the material time, no formal disciplinary process had commenced, yet the Respondent invoked managerial prerogative to justify the continuation of a disciplinary process that, in fact, had not even begun. 11.This demonstrates that the disciplinary measures ultimately taken which led to termination of the Petitioner’s employment on 30th May, 2025 were predetermined and premeditated rather than arising from a fair and lawful process, rendering reliance on the consent order as a justification for those measures particularly unjust. 12.The predetermined nature of the outcome is further evidenced by the termination letter being emailed to the Petitioner at 9:57 PM on the very same day as the disciplinary hearing, leaving no time for genuine deliberation as required by principles of procedural fairness and natural justice. 13.A decision of such gravity, finalizing a complete disciplinary process with the Managing Director’s approval, could not credibly have been formulated and communicated in mere hours following the hearing unless it was already decided beforehand. 14.The Petitioner has suffered and continues to suffer grave, documented, and worsening harm to his health as a direct and foreseeable consequence of the Respondent's unlawful conduct. It is medically crucial that he receives continued medical care without interruption to avoid further and potentially irreversible deterioration of his health. 15.The Respondent's abrupt cancellation of the Petitioner's medical insurance cover immediately following his unlawful dismissal, before his right of appeal had even lapsed, denied him access to treatment for conditions caused by the Respondent's own acts, in direct violation of Article 43 of the Constitution. 16.The Petitioner’s current unemployment, which directly results from the Respondent’s unlawful and contemptuous termination, has severely hindered his ability to access and afford the ongoing medical care that is urgently necessary for his well-being. 17.Prior to the Petitioner’s dismissal from employment, the Respondent granted the Petitioner a loan over the charged property known as Ruiru/Kiu Block 2/6616. 18.The termination of employment has financially crippled and encumbered the Petitioner, hence making it strenuous to service the loans and has fallen into arrears as expected and any further demand will highly prejudice him. 19.The Respondent has issued the petitioner with a statutory notice dated 19th January, 2026 which is expected to lapse on or about 19th April, 2026. 20.Without interim relief, his health will continue to deteriorate with potentially irreversible consequences. This court has jurisdiction under Article 43 of the Constitution, Article 23(3) of the Constitution, and Section 12 of the Employment and Labour Relations Court Act to grant interim protective relief to safeguard the Petitioner's constitutional right to health pending final determination of the petition. 21.The Petitioner faces irreversible deterioration of health and difficulty in meeting basic subsistence needs that are themselves a direct consequence of the impugned order of 20th May, 2025. 22.The applicant filed an affidavit in support of the application, rating the grounds outlined above. He annexed as evidence the court order dated 2nd April 2025, the court order dated 20th May 2025, a copy of the ruling dated 18th December 2025, the show cause dated 22nd May 2025, a copy of the minutes, the termination letter, a copy of the statutory notice of sale, and a copy of the medical report. 23.In response to the application, the respondent filed a Notice of Preliminary Objection dated 28th April 2026, as follows-I.The Interlocutory Prayers sought are not anchored in the main Petition.It is a settled legal principle that an interlocutory prayer for an order ought to be anchored in a claim as set ought in the main suit or petition. Prayers Nos.2 and 3 of the application that seeks a temporary injunction restraining the Respondent from exercising its statutory power of sale, auctioning, selling, or otherwise dealing with the charged property known as Ruiru/Kiu Block 2/6616 is not anchored in the main Petition.In Yang Guang Property Design & Manufacturing Limited v China Wa Yi Company (K) Limited [2021] eKLR, the court held:-"..it is now well settled that for a litigant to seek a temporary injunction as an interim relief, the Applicant must have included a substantive prayer for permanent injunction or similar relief in the plaint." The court went on to seek guidance in the case of John Kubai M'eringa v Fredrick Ntongai M'eringa [2009] eKLR, where it was held:-"Considering those words in the case of Winstone v Winstone [1959]3 ALL ER 580 Winn J. sald:-" in my view these words are to be construed and understood as limited to the granting of an injunction ancillary to and comprised within the scope of the substantive relief sought in the proceedings in which the application for injunction is made" Additionally, the above position was well stipulated in the case of Kariuki v Paramount Bank Limited [2024] KEHC 2288 (KLR) where the court affirmed that an interlocutory injunction must be anchored in the substantive prayers sought in the main suit and where such relationship doesn't exist, then the application as filled is fatally defective.II.There is no prayer for permanent injunction restraining the Respondent from exercising its statutory power of sale in the Amended Petition dated 30 September 2025, and thus, application is fatally defective and Court should not grant the orders sought. This Honorable Court does not have jurisdiction to determine the legal issues and grant the orders sought in the Application because-(a)The Applicant seeks for an injunction restraining the Respondent from exercising its statutory power of sale. The jurisdiction of the Employment and Land Court flows from Article 162 of the Constitution of Kenya. The Court has jurisdiction to determine disputes relating employment and labour relations and further provides that Parliament shall determine the jurisdiction and functions of the specialized Courts established under the Constitution.(b)Section 12 of the Employment and Labour Relations Act, as read together with Article 162(2)(A) of the Constitution of Kenya, does not confer jurisdiction upon the ELRC to adjudicate matters relating to legal charges.(c)Charges are contractual in nature and do not fall within the purview of Section 12 of the Employment and Labour Relations Act. The dispute is a commercial matter involving security to which this Honorable Court lacks jurisdiction as loan Agreements are commercial agreements and/or contracts which are separate and distinct from the contract of employment.(d)Any dispute relating to charged property can only be dealt with by the High Court pursuant to Article 165 of the Constitution of Kenya.(e)The Supreme Court in Albert Chaurembo Mumba & 7 others v Maurice Munyao & 148 others [2019] eKLR was of the opinion that a Court of law can only exercise jurisdiction as conferred by the Constitution or other written law. It cannot arrogate to itself jurisdiction exceeding that which is conferred upon it by law. The Court held thus [Paragraph 135 & 137]:-"By jurisdiction, it is clearly meant the authority which a court has to decide matters that are litigated before it or to take cognisance of matters presented in a formal way for its decision. The limits of this authority are imposed by the statute, charter or commission under which the court is constituted, and may be extended or restricted by like means. If no restriction or limit is imposed the Jurisdiction is said to be unlimited. A limitation may be either to the kind and nature of the actions and matters of which the particular court has cognizance, or as to the area over which jurisdiction shall extend, or it may partake both these characteristics. If for example, the jurisdiction of an inferior court depends on the existence of a particular state of facts, the court must inquireInto the existence of the facts in order to decide whether it has jurisdiction. Where a court takes it spon itself to exercise a jurisdiction which it does not possess, is decision amounts to a muliny. Jurisdiction, therefore, must be acquired before judgment is given, to give a prescriptive answer to the jurisdictional question, the first port of call is to determine the nature of the dispute, Whether in the circumstances of the case, it is a dispute contemplated to be adjudicated by the High Court under Article 165 of the Constitution or it revolves around those disputes reserved for resolution by the Employment and Labour Relations Court pursuant to Article 162(2) and Section 12 of the Employment and Labour Relations Court"(f)The jurisdictional dichotomy on which court ought to hear disputes where charged property was concerned was laid to rest in Co-operative Bank of Kenya Limited v Patrick Kang'ethe Njuguna & 5 others [2017] eKLR where the Court held thus [Paragraph 41]:"Furthermore, the jurisdiction of the ELC to deal with disputes relating to contracts under Section 13 of the ELC Act ought to be understood within the context of the court's jurisdiction to deal with disputes connected to 'use of land as discussed herein above. Such contracts, in our view, ought to be incidental to the 'use' of land; they do not include mortgages, charges, collection of dues and rents which fall within the civil jurisdiction of the High Court"(g)This was further reiterated by the Court of Appeal in Bank of Africa Kenya Limited & Another-vs-TSS Investment Limited & 2 Others-Civil Appeal No. E055 of 2022 wherein the Court held:"We form this view taking to mind this Court's decision in the afore-cited case of Co-operative Bank of Kenya Limited vs. Patrick Kangethe Njuguna & 5 others (supra) where it was held that the ELC only has jurisdiction to deal with disputes connected to "use" of land and contracts incidental to the "use" of land, which do not include mortgages, charges, collection of dues and rents which fall within the civil 16 jurisdiction of the High Court. Moreover, a charge is a disposition that has no direct contractual relation to "use" (by a tenant or licensee) as in this case, of a chargor's land. In view of the foregoing, we agree with learned counsel for the appellants that the learned Judge had no jurisdiction to entertain the respondents' suit as pleaded. The subject matter of prayer 4 and 5 are res judicata. The present application is a direct attempt to relitigate the very same issues in the same proceedings between the same parties before the same court. Prayer 4 of the application seeks to set aside the consent order recorded on 20th May 2025, which has been conclusively determined by this Honourable Court. The Court pronounced itself on its ruling of 18th of December 2025 where the court expressly and finally determined that "the consent order of 20 May 2025 'varied and substituted the original order of 2nd April 2025 and that the Respondent was not in contempt of the orders of 2nd April 2025 as varied by the consent of 20 May 2025" and as such, this Honourable Court cannot seat on appeal on its own decision as it is functus officio in so far as prayer 4 and 5 raised in the present Application. In TSS Investment Limited v National Bank of Kenya Limited & 2 others (Commercial Civil Suit 86 of 2016) [2022) KEHC 11 (KLR) the Court held that: "for a judicial tribunal to become functus officio, it must have delivered a valid judgment, decree or order of a final and conclusive nature and res judicata must have come into existence. The High court pronounced itself on 27th April 2018 on the issues raised in the instant application. This court is being invited to sit on appeal on its own decision. Its functus officio on the issues raised in the instant application touching on the injunction sought. 9.Suffice to add, no legal basis has been laid for the Court to vary the consent order recorded on 20th May 2025, which order was recorded after Court heard submissions. The Counsel attended the hearing on the said date and as an agent of the Petitioner, had the right to consent to the orders in question. In Okero Nyamira County Assembly & another (Petition E007 of 2026) [2026] KEELRC 988 (KLR) (22 April 2026) (Ruling), the Court held inter-alia: A consent order/judgement is a binding contract that can only be set aside on limited grounds, such as fraud, collusion, or misapprehension of material facts. A consent made by counsel is binding on parties, and a court will not vary it unless the grounds for rescinding a normal contract exist per Law AG. Ja in Brooke Bond Liebig (T)Brooke Bond Liebig (1) Limited v Mallya (1975) E.A. 266. The consent order/Judgment between the parties is one that cannot be vitiated and the effort this time round must fall. In addition to the above, in Teachers Service Commission v Kenya National Union of Teachers (KNUT) & 3 others [2015] KEELRC 863 (KLR) the Court held inter-alia: The Court set out grounds upon which a consent Judgment could be reviewed or set aside to include:I.the consent having been obtained by fraud or collusion or by an agreement contrary to the policy of the Court.II.the consent having been given without sufficient material facts or in misapprehension or in ignorance of material facts; or generally for a reason which would enable the Court to set aside the agreement. None of the above grounds were available to the Petitioner/Applicant. The facts and circumstances under which the consent was arrived at were well documented in open Court. The parties fully participated in the process that culminated in the consent order and undertook fully to abide by the terms of the consent. The Application to set aside the consent and open up the Petition was merely an after thought the Applicant having fully benefited from the consent order which brought to an end a national wide strike of its employees. The Applicant was in law and fact estopped from reneging on the consent it had fully participated in crafting and having enjoyed the fruits of the consent order."III.The Application seeks substantive reliefs which are a preserve of the main Petition. Prayer No.5 seeking a declaration that the termination of the Petitioner was contemptuous, constitute final reliefs that are a preserve of the main hearing of the Petition and cannot properly be granted by way of an interlocutory application. In Catherine Wambui Gatebi vs Savannah Brands Company Ltd (Cause E650 of 2022) [2023] KEELRC 600 (KLR) the Court pronounced itself as follows;-"Finally, and needless to be labour, the orders sought in the application are similar to the orders sought in the memorandum of claim dated 15th September 2022 and the court cannot issue such orders at interlocutory stage as it would be contrary to the provision of Article 50 of the Constitution of Kenya and all other provisions of law on fair hearing. It is essential that the court analyses the evidence adduced by the parties before arriving at a just determination of the issues before it. Ultimately, the instant Application is jurisdictionally flawed and improper and whose remedy can only be dismissing the said application with costs to the Respondent.’’ 24.The court directed the Notice of Preliminary Objection be canvassed first by way of written submissions and both parties complied. 25.The respondent’s submissions in support of the Notice of Preliminary Objection were similar to the objection above; there is no need to reproduce the same. The petitioner’s submissions in opposition to the Notice of Preliminary Objection 26.Whether the Respondent's Preliminary Objection meets the legal threshold of a valid Preliminary Objection- the law governing Preliminary Objections is settled and authoritatively stated in Mukhisa Biscuit Manufacturing Co. Ltd v West End Distributors Ltd [1969] EA 696 the Court stated as follows:- ‘"A preliminary objection is in the nature of what used to be a demurrer. It raises a pure point of law which is argued on the assumption that all the facts pleaded by the other side are correct. It cannot be raised if any fact has to be ascertained or if what is sought is the exercise of judicial discretion." 27.The Respondent's Preliminary Objection challenges whether the interlocutory prayers are anchored in the Petition, whether the reliefs sought are substantive and whether the Court lacks jurisdiction. 28.Each of these objections requires the Court to examine the Petition, examine the Notice of Motion and evaluate the relationship between the pleadings and the reliefs sought. 29.That exercise necessarily involves ascertainment of facts and interpretation of pleadings, and therefore falls squarely outside the scope of a Preliminary Objection as defined in Mukisa Biscuit (Supra). 30.In the case of n the case of Oraro v Mbaja [2005] 1 KLR 141 the court held as follows: "...A "preliminary objection" correctly understood, is now well defined as, and declared to be, a point of law which must not be blurred with factual details liable to be contested and in any event, to be proved through the process of evidence. Any assertion, which claims to be a preliminary objection, yet it bears factual aspects calling for proof or seeks to adduce evidence for its authentication is not, as a matter of legal principle, a true preliminary objection which the court should allow to proceed. Where a court needs to investigate facts, a matter cannot be raised as a preliminary point....Anything that purports to be a preliminary objection must not deal with disputed facts, and it must not itself derive its foundation from factual information which stands to be tested by normal rules of evidence...." (Emphasis added). That the Respondent's Preliminary Objection falls squarely within the category condemned in the above case law. The issues raised anchorage of prayers, the nature of the reliefs, res judicata and jurisdiction require examination of pleadings, prior proceedings and the exercise of judicial discretion, and therefore do not constitute pure points of law. Decision on the Notice of Preliminary Objection 31.The threshold of a proper Notice of Preliminary Objection was settled in Mukhisa Biscuit Manufacturing Co. Ltd v West End Distributors Ltd [1969] EA 696 the Court stated as follows:- ‘"A preliminary objection is in the nature of what used to be a demurrer. It raises a pure point of law which is argued on the assumption that all the facts pleaded by the other side are correct. It cannot be raised if any fact has to be ascertained or if what is sought is the exercise of judicial discretion." 32.Upon review of the Notice of Preliminary Objection and the submissions of the parties, it appeared to the court that the Notice could not be decided without examining the pleadings and the evidence from both sides. The facts were not settled. Even the issue of jurisdiction based on the notice of sale could not be determined without the court reading the loan agreement to establish whether the dispute fell within the court's jurisdiction. The application is made during a pending hearing of the petition, where the court has already assumed jurisdiction and has issued several decisions, some of which are now challenged in the application. The grounds in the objection are not clear enough to be decided in limine. The application fails the threshold of Mukhisa Biscuit Manufacturing Co. Ltd v West End Distributors Ltd [1969] EA 696(supra). The objection does not raise pure points of law. The facts must be ascertained. The court finds the Notice of Preliminary Objection to be improper and premature. The parties should seek directions on the hearing of the application, where all issues raised in the objection can be addressed on their merits, including whether or not the court has jurisdiction over the loan. 33.The Notice of Preliminary Objection dated 28th April 2026 is dismissed with costs to the petitioner in the cause. The respondent is granted leave of court to file a response to the applications made by the petitioner by way of Notice of Motions dated 17th April 2026 and 20th April 2026. Hearing scheduled for 20th July 2026. 34.It is so Ordered. DATED, SIGNED, AND DELIVERED IN OPEN COURT AT NAIROBI THIS 3RD DAY OF JULY, 2026.JEMIMAH KELI,JUDGE.IN THE PRESENCE OF:Court Assistant: OtienoPetitioner - SombaRespondent – Ochieng h/b Kigatta