https://new.kenyalaw.org/akn/ke/judgment/keelrc/2026/1569

Mahondo v Craft Silicon Limited Little Limited & another (Employment and Labour Relations Cause 453 of 2020) [2026] KEELRC 1569 (KLR) (5 June 2026) (Ruling) Neutral citation: [2026] KEELRC 1569 (KLR) Republic of Kenya In the Employment and Labour Relations Court at Nairobi Employment and Labour Relations Cause 453 of 2020 JW Keli, J June 5, 2026 Between Ronald Otieno Mahondo Claimant and Craft Silicon Limited Little Limited 1st Respondent Little Limited 2nd Respondent Ruling 1.The applicant was the judgment debtor and filed an application by way of notice of motion dated 13th November 2025 brought under (Rule 73 (2) of the Employment and Labour Relations Court (Procedure) Rules 2024 and Order 42 Rule 6 of the Civil Procedure Rules, 2010 for orders that:-a.Spentb.Pending the hearing and determination of the application, or further orders of the court, there be a stay of execution of the judgment delivered by the Honourable Justice Mathews Nduma delivered on 23rd October 2025.c.Pending the hearing and determination of the intended appeal, there be a stay of execution of the judgment of 23rd October 2025 delivered by the Honourable Justice Mathews Nduma.d.The costs of this application be provided for. Grounds of the application 2.On 23rd October 2025, this court delivered a judgment in favour of the claimant against the respondent for a sum of Kshs.97,920,000/- comprising of 1% value of the respondents' company and compensation for unlawful termination. The court also awarded the claimant costs of the case and interest. 3.The court granted the respondents a stay of execution of 30 days which lapses on 23rd November 2025. 4.Aggrieved by the judgment of the court, the respondents have filed a Notice of Appeal and have requested for typed proceedings for purposes of the appeal. 5.The appeal has reasonable prospects of success. Unless stay of appeal is granted, the respondents' intended appeal will be rendered nugatory as there is an imminent threat of execution. If execution proceeds immediately, the respondents will suffer irreparable loss that cannot be remedied by damages even if the appeal succeeds. The decretal sum of Kshs. 97,920,000 is substantial and its payment would deplete working capital, disrupt operations, and divert funds meant for payroll, suppliers, leases, and statutory obligations. Once paid, the funds cannot be restored in a manner that reverses the operational and reputational harm caused by forced execution. 6.Execution would also cause disproportionate prejudice to third parties and the public. The 2nd respondent, which operates the Little Cab service, would face serious disruption to operations, loss of contracts, and possible job losses, with lasting reputational impact even if the appeal ultimately succeeds. Permitting execution would render the intended appeal nugatory. The respondents' losses would be permanent, while the claimant's interest in the decretal sum can be safeguarded through appropriate security. 7.The balance of convenience therefore favours granting a stay pending appeal. 8.The respondents are willing to deposit an insurance bond for a portion of the judgment sum as security for stay of execution pending appeal. 9.The application has been made without unreasonable delay. 10.It is in the interests of justice that the orders sought be granted. 11.The application was supported by affidavit sworn by Kamal Budhabhatti o the 16th November 2025 where he annexed the Notice of appeal, and the statement of audited accounts for the 2nd respondent for the years 2023 and 2024. The deponent offered to deposit security of the compensation amount in a joint interest-earning account or provide an insurance bond of 1/3 of the judgment sum. Response 12.In response to the Respondents’ abovementioned Application, the Claimant/ judgment holder filed a Notice of Preliminary Objection dated 27th November 2025 and a Replying Affidavit sworn on 30th March 2026. The notice of preliminary objection dated 27th November 2025 raised the following grounds-a.The Honourable Court lacks jurisdiction to entertain, hear and determine and/or grant orders sought in the application.b.The Respondent’s Application as filed is bad in law and offends the mandatory provisions of Rule 21(2) of the Employment and Labour Relations Court Procedure Rules 2024.c.The Application as filed is incompetent and incurably defective as the Honourable Court is divested of the jurisdiction to grant the orders sought therein as held in University of Nairobi v M (Employment and Labour Relations Appeal E071 of 2025) [2025] KEELRC 2031 (KLR) (4 July 2025).d.The Application is misconceived, frivolous, vexatious and an abuse of the due process of this Honourable Court and ought to be struck out and/or dismissed with costs to the Claimant. Determination 13.The application and the notice of preliminary objection were canvassed together by way of written submissions filed by both parties. Decision on the preliminary Objection 14.The claimant/respondent submitted that his Preliminary Objection challenges the jurisdiction of this Honourable Court on the ground that the Respondents’ subject Application for stay of execution violates the mandatory provisions of Rule 21 (2) of the Employment and Labour Relations Court ELRC (Procedure) Rules 2024 which reads thus: -“ 21.Stay of execution in case of appeal (1)Where an application for stay of execution pending appeal has been lodged, the applicant shall, in the supporting affidavit, declare whether a similar application has been filed in any other court. (2)An application for stay of execution pending appeal shall be filed in the appeal file.” Rule 21 (2) of the ELRC (Procedure) Rules 2024 provides in mandatory terms that any stay of execution in case of appeal must be filed in the appeal file. Consequently, the jurisdictional foundation of the Respondents’ subject Application, which has been filed in the original file instead of the appeal file, is fundamentally flawed and ought to be struck out. That there is a purpose behind the wording of Rule 21 (2) of the ELRC (Procedure Rules) and the said purpose was explicated upon by a five – judge bench in William Odhiambo Ramogi & 2 Others vs the Honourable Attorney General & 3 Others [2019] eKLR thus: - “…the principles for the grant of stay of proceedings pending the hearing and determination of an appeal are as follows: a. First, there must be an appeal pending before the higher Court; b. Second, where such stay is sought in the Court hearing the case as opposed to the higher Court to which the Appeal has been filed and there is no express provision of the law allowing for such an application, the Applicant should explain why the stay has not been sought in the higher Court. This is because, due to the potential of an application for stay of proceedings to inordinately delay trial, there is a policy in favour of applications for stay being handled in the Court to which an appeal is preferred because such a Court is familiar with its docket and is therefore in a position to calibrate any order it gives accordingly; c. Third, the Applicant must demonstrate that the appeal raises substantial questions to be determined or is otherwise arguable; d. Fourth, the Applicant must demonstrate that the Appeal would be rendered nugatory if the stay of proceedings is not granted; e. Fifth, the Applicant must demonstrate that there are exceptional circumstances which make the stay of proceedings warranted as opposed to having the case concluded and all arising grievances taken up on a single appeal; and f. Sixth, the Applicant must demonstrate that the application for stay was filed expeditiously and without delay.” In the matter herein, the Respondents have not even bothered to explain why they have not sought stay in the Court of Appeal neither have they deemed it necessary to address their brazen violation of Rule 21 (2) of the ELRC (Procedure) Rules 2024. In the premises, it is the Claimants submissions that its Preliminary Objection dated 27th November 2025 is merited and the Respondents’ Application herein is ripe for striking out. 15.Conversely, the respondent submitted that this court has jurisdiction to grant a stay of execution pending appeal. The respondents acknowledge that rule 5(2) (b) of the Court of Appeal Rules also vests similar jurisdiction in the Court of Appeal. Both this court and the Court of Appeal have concurrent jurisdiction to entertain applications for stay of execution. 7. The respondents submit, however, that this court is the most appropriate forum to hear and determine the present application. In Madhupaper International Limited v Kerr, Civil Application No. Nai 116 of 1985, Kneller, Nyarangi, and Gachuhi JJA set out the rationale for preferring the High Court as the proper court to consider an application for an injunction pending appeal, stating as follows: "It is preferable for the High Court to deal with such an application, in any event, not so much as to protect this court from a sudden inconvenient dislocation of its lists but more cause this court would have the distinct advantage of seeing what the judge made of it. The learned judges of the High Court should take note of this concurrent jurisdiction which the two courts have and exercise theirs... There are cases, however, where it would be wrong to grant an injunction pending appeal. These would include where the appeal is frivolous or to grant it would inflict greater hardship than it would avoid." 16.The issue before the court concerns stay of execution of the court’s own judgment. The claimant in his objection relies on rule 21 of the Court rules, to wit-‘ 21. Stay of execution in case of appeal(1)Where an application for stay of execution pending appeal has been lodged, the applicant shall, in the supporting affidavit, declare whether a similar application has been filed in any other court.(2)An application for stay of execution pending appeal shall be filed in the appeal file.’’ 17.The court finds that this rule applies to appeals from lower courts, not to decisions of this court. The applicant seeks stay of the judgment of the court. Rule 73(2) of the court rules applies to wit- ‘2)Rules on execution or stay of execution of an order or decree of the Court shall be in accordance with the Civil Procedure Rules.’ The relevant Civil Procedure Rule is Order 42 Rule 6 to wit –‘6. Stay in case of appeal [Order 42, rule 6](1)No appeal or second appeal shall operate as a stay of execution or proceedings under a decree or order appealed from except in so far as the court appealed from may order but, but the court appealed from may for sufficient cause order stay of execution of such decree or order,’’Applying the foregoing, the court holds that it has jurisdiction to stay its own decision; thus, the notice of preliminary objection lacks merit. Whether the application for stay of execution is merited. 18.Rule 73 of the Employment and Labour Relations Court Rules of 2024 provides as follows:- ‘(2)Rules on execution or stay of execution of an order or decree of the Court shall be in accordance with the Civil Procedure Rules.’’ The relevant rule under the Civil Procedure Rules is Order 42 Rule 6 to wit- ‘6. Stay in case of appeal [Order 42, rule 6](1)No appeal or second appeal shall operate as a stay of execution or proceedings under a decree or order appealed from except in so far as the court appealed from may order but, the court appealed from may for sufficient cause order stay of execution of such decree or order, and whether the application for such stay shall have been granted or refused by the court appealed from, the court to which such appeal is preferred shall be at liberty, on application being made, to consider such application and to make such order thereon as may to it seem just, and any person aggrieved by an order of stay made by the court from whose decision the appeal is preferred may apply to the appellate court to have such order set aside.(2)No order for stay of execution shall be made under subrule (1) unless—(a)the court is satisfied that substantial loss may result to the applicant unless the order is made and that the application has been made without unreasonable delay; and(b)such security as the court orders for the due performance of such decree or order as may ultimately be binding on him has been given by the applicant.’’ 19.The court established that there was no unreasonable delay in filing the application. The impugned decision (judgment) is dated 23rd October 2025, and the instant application was filed on 17th November 2025, which the court found was brought without inordinate delay. 19.On substantial loss, this being a money decree, the loss is disclosed as the respondent did not demonstrate capacity to repay the money in the event of a successful appeal by filing an affidavit of means. 19.The deposit of security for performance of the decree is a mandatory condition under section 42(6) of the Civil Procedure Rules. The applicant stated it was willing to deposit the compensation award in a joint interest-earning account or issue an insurance bond of 1/3 of the judgment sum. 19.The court finds that the application is merited and meets the conditions for the grant of a stay of execution under Order 42, Rule 6 of the Civil Procedure Rules. The court is guided by decision in Butt v Rent Restriction Tribunal [1979] KECA 22 (KLR) where the Court of Appeal gave guidance on how a Court should exercise discretion in an application for a stay of execution, that: -‘If there is no other overwhelming hindrance, a stay ought to be granted so that an appeal, if successful, may not be nugatory. A stay which would otherwise be granted ought not to be refused because the judge considers that another, which in his opinion will be a better remedy, will become available to the applicant at the conclusion of the proceedings.It is in the discretion of the court to grant or refuse a stay but what has to be judged in every case is whether there are or not particular circumstances in the case to make an order staying execution. It has been said that the court as a general rule ought to exercise its best discretion in a way so as not to prevent the appeal, if successful from being nugatory, per Brett, LJ in Wilson v Church (No 2) 12 Ch D (1879) 454 at p 459. In the same case, Cotton LJ said at p 458:“I will state my opinion that when a party is appealing, exercising his undoubted right of appeal, this court ought to see that the appeal, if successful, is not nugatory.” The application is merited, the applicant having complied with the provisions of Order 42 Rule 6 of the Civil Procedure Rules and, allowed in order to prevent the appeal, if successful, from being nugatory. 19.The Application dated 13th November 2025 is allowed as follows:a.The Honourable Court is pleased to issue an order of Stay of execution of the judgment of Honourable Justice Mathews Nduma delivered on 23rd October 2025 and consequential orders pending hearing and determination of the intended appeal, on condition that the applicant deposits Kshs. 1,020,000 in a joint interest-earning account held between the advocates of the parties within 30 days.b.Costs of the application to the respondent. 19.The Notice of preliminary objection lacks merit and is dismissed with no order as to costs. 19.It is so Ordered. DATED, SIGNED, AND DELIVERED IN OPEN COURT AT NAIROBI THIS 5TH JUNE, 2026.JEMIMAH KELI,JUDGE.In The Presence Of:Court Assistant: OtienoApplicant: Ms MuthianiRespondent-Nyakiti h/b Kamande