https://new.kenyalaw.org/akn/ke/judgment/kemc/2026/788

**REPUBLIC OF KENYA** **IN THE CHIEF MAGISTRATES COURT AT MOMBASA** **MAGISTRATES COURT CIVIL** **MCELRC CAUSE NO. E364 OF 2021** **SIMON MUNAYO & 15 OTHERS...……….….……...………CLAIMANT/RESPONDENT** **VERSUS** **CYKA MANPOWER SERVICES LIMITED..…………………..RESPONDENT/APPLICANT** **RULING** 1. Before this Court is the Respondent/Applicant’s Notice of Motion dated 25th June 2026 seeking, principally, an order of stay of execution of the judgment delivered by this Court on 15th April 2026, together with all consequential decrees and/or orders arising therefrom, pending the hearing and determination of Mombasa ELRC Civil Appeal No. E085 of 2026, Cyka Manpower Services Limited v Simon Munyao & 15 Others. The Applicant also seeks costs of the application to abide the outcome of the appeal. 2. The application is expressed to be brought under Sections 1A, 3A and 34 of the Civil Procedure Act, Order 42 Rule 6 and Order 51 Rule 1 of the Civil Procedure Rules, as well as Article 159 of the Constitution. It is supported by the affidavit of Myra Stephanie Awuor, sworn on 25th June 2026. 3. The application is opposed by the Claimants/Respondents through the Replying Affidavit sworn by Simon Munyao, the 1st Claimant, on 30th June 2026, together with written submissions filed on their behalf. The Applicant equally filed written submissions in support of the application. Background 1. Judgment in this matter was delivered on 15th April 2026 in favour of the 16 Claimants. Upon delivery of judgment, the Court granted a 30-day stay of execution, which expired on 15th May 2026. The Claimants thereafter proceeded with taxation of their Bill of Costs and a ruling on taxation was delivered on 25th June 2026. 2. The decretal amount is stated to be KShs. 3,162,000, while the Claimants have placed the taxed costs at KShs. 240,950. The combined exposure is therefore KShs. 3,402,950. The Applicant apprehends execution of the decree, while the Claimants maintain that they are entitled to enjoy the fruits of their judgment. 3. The Applicant has lodged an appeal against the whole judgment. The Memorandum of Appeal before the Court is dated 14th May 2026. Although the Applicant’s written submissions refer to the Memorandum as having been filed on 14th June 2026, the Memorandum itself bears the date 14th May 2026, and the Claimants’ Replying Affidavit also refers to 14th May 2026. I therefore proceed on the basis of the documentary record before the Court. Applicant’s Case 1. The Applicant contends that it is dissatisfied with the judgment and has preferred an appeal in Mombasa ELRC Civil Appeal No. E085 of 2026. It maintains that the appeal is arguable and raises six substantive grounds concerning, inter alia, the finding that the Claimants were not casual employees, the application of section 37 of the Employment Act, the finding of unlawful and unfair termination, the awards of notice pay, leave pay and damages, the award of costs, and interest on the decretal sums. 2. On substantial loss, the Applicant argues that the decretal sum of KShs. 3,162,000 plus costs is substantial and that the Claimants’ current employment and financial circumstances are unknown. It fears that if the decretal sum is paid out and the appeal subsequently succeeds, it may not be able to recover the money from the Claimants. 3. On security, the Applicant offers to deposit KShs. 1,000,000. It further states in its submissions that it is involved in other employment-related matters in which it has been required to deposit or settle significant sums, namely ELRCA No. E095 of 2025, Cyka Manpower v Peter Nyamai; ELRCA E029, Geoffrey Iteba & 10 Others; and MCELRC/E355/2021, Makau Nzuki & 9 Others. 4. The Applicant further submits that the Claimants have already taxed their costs and therefore there is a real likelihood of execution. It argues that execution before determination of the appeal would prejudice it and potentially render the appeal nugatory. Claimants’ Case 1. The Claimants oppose the application. Simon Munyao first challenges the authority of Myra Stephanie Awuor to swear the Supporting Affidavit, arguing that there is nothing confirming that she is an employee of the Applicant. 2. The Claimants further contend that although a Memorandum of Appeal has been filed, the Record of Appeal has not been filed and served within the prescribed timelines. They argue that the mere filing of a Memorandum of Appeal is not, by itself, a sufficient basis for granting stay. 3. They also dispute that the Applicant has established substantial loss. Their position is that it is incumbent upon the Applicant to prove their inability to refund the decretal sum if the appeal succeeds. 4. The Claimants particularly object to the proposed security of KShs. 1,000,000. They maintain that the Applicant has declined to deposit the full decretal sum of KShs. 3,162,000 plus costs of KShs. 240,950, and contend that this militates against exercise of discretion in its favour. 5. They further argue that the application was brought after inordinate and unexplained delay. They acknowledge, however, that execution had not commenced by the time the Replying Affidavit was sworn, although they maintain that there is nothing preventing them from commencing execution. 6. In their written submissions, the Claimants additionally state that they face a real and apparent danger that the Applicant may “close shop,” thereby leaving all 16 Claimants holding merely a paper judgment and decree. They therefore urge the Court to dismiss the application with costs. Issue for Determination 1. Having considered the application, the Supporting Affidavit, the Replying Affidavit, the respective written submissions and the authorities relied upon, the principal issue for determination is: Whether the Applicant has satisfied the requirements for stay of execution pending appeal under Order 42 Rule 6 of the Civil Procedure Rules. 2. Order 42 Rule 6(2) provides, in material part, that no order for stay shall issue unless the Court is satisfied that substantial loss may result to the Applicant unless the order is made, the application has been made without unreasonable delay, and such security as the Court orders for due performance of the decree has been given by the Applicant. Kenyan courts continue to treat those three requirements as the governing statutory conditions for stay. 3. The power to grant stay is discretionary. That discretion must, however, be exercised judicially and in a manner which balances the successful litigant’s right to the fruits of judgment against the appellant’s right to pursue an appeal without that appeal being rendered nugatory. The Court of Appeal in Butt v Rent Restriction Tribunal emphasized that the discretion should be exercised so as not to prevent an appeal, while still having regard to the special circumstances of each case. Authority of the Deponent 1. I first deal with the preliminary objection regarding the authority of Myra Stephanie Awuor to swear the Supporting Affidavit. In paragraph 1 of the Supporting Affidavit, the deponent states under oath that she is an Advocate of the High Court of Kenya and the Legal and Compliance Officer of Cyka Manpower Services Limited. 2. The Claimants merely contest that assertion on the basis that no document confirming her employment or authority has been produced. They have not placed before the Court evidence showing that she is not the Applicant’s Legal and Compliance Officer or that she acted contrary to the company’s instructions. 3. The jurisprudence on affidavits sworn on behalf of corporations does not support striking out an affidavit merely because a board resolution was not annexed, particularly where the deponent identifies herself as an officer of the corporation and there is no evidential demonstration that she was unauthorized. Courts have cautioned against elevating such an issue into a procedural technicality where no evidence of want of authority has been produced. 4. I am therefore not persuaded that the Supporting Affidavit is incompetent on that ground. The objection fails. Whether There Was Unreasonable Delay 1. Judgment was delivered on 15th April 2026. A 30-day stay was granted and expired on 15th May 2026. The application now before Court is dated 25th June 2026. 2. There was therefore a period of approximately forty-one days between expiry of the initial stay and the filing of the present application. The Applicant has not given an especially detailed explanation for that period. Its written submissions focus largely on the filing of the appeal. 3. Nevertheless, delay must be assessed contextually. The appeal had already been initiated and, significantly, the ruling on taxation of costs was delivered on 25th June 2026, the same date as the present application. The taxation of costs brought the matter closer to actual execution. 4. In those circumstances, while the Applicant could have moved more promptly after expiry of the initial stay, I am not satisfied that the delay was so prolonged or prejudicial as to amount, by itself, to unreasonable delay sufficient to defeat the application. I therefore find that this limb has been substantially satisfied. Substantial Loss and Ability to Refund 1. Substantial loss is ordinarily regarded as the cornerstone of an application for stay. The Applicant must demonstrate that unless stay is granted, it is likely to suffer loss of such nature that the appeal, if successful, would be rendered hollow or nugatory. 2. The decree herein is monetary. Execution of a money decree does not, without more, amount to substantial loss. The Applicant must demonstrate a real risk that recovery of the decretal sum would be difficult or impossible if the appeal succeeds. 3. The Applicant’s concern is that the Claimants’ current financial circumstances and nature of employment are unknown and that it may not be able to recover the decretal sum from them. 4. The Claimants answer that it is for the Applicant to prove their inability to refund. That proposition, however, does not fully reflect the evidential position applicable to such applications. 5. In National Industrial Credit Bank Ltd v Aquinas Francis Wasike & another, the Court of Appeal held that although the legal burden lies on the applicant, it would be unreasonable to require an applicant to know the detailed resources of a respondent. Once a reasonable apprehension as to inability to refund is expressed, the evidential burden shifts to the respondent because his or her resources are matters peculiarly within his or her knowledge. 6. In the present case, the Applicant has expressly raised the concern that it does not know the Claimants’ financial circumstances and may be unable to recover the decretal sum if it pays them and later succeeds on appeal. 7. Simon Munyao’s Replying Affidavit does not disclose his financial means or those of the other 15 Claimants. Neither does it set out assets, income, employment or other resources demonstrating that the Claimants, jointly or individually, would be in a position to refund the sums received if required to do so. 8. Instead, the Replying Affidavit principally maintains that the burden lies upon the Applicant. In light of the principles in National Industrial Credit Bank Ltd v Aquinas Francis Wasike, that response is insufficient once a reasonable apprehension has been raised. More recent decisions have continued to apply the principle that where the respondent’s means remain undisclosed, the risk of non-recovery may amount to substantial loss. 9. The total sum involved is KShs. 3,402,950 inclusive of taxed costs. It is not insignificant. There are also 16 individual decree-holders, such that payment would result in distribution of the award amongst several persons. Recovery from multiple individuals following a successful appeal could, as a practical matter, prove difficult. I am therefore satisfied that the Applicant has demonstrated a sufficient risk of substantial loss. 10. Conversely, I have considered the Claimants’ assertion that there is a danger that the Applicant may “close shop.” That is a serious allegation. However, it appears only in the written submissions. No affidavit evidence, financial record or other material has been placed before Court demonstrating that Cyka Manpower Services Limited is insolvent, closing operations, dissipating assets, or otherwise likely to become incapable of satisfying the decree. 11. Submissions are not a substitute for evidence. I therefore cannot accord that assertion substantial evidential weight. Arguability of the Appeal 1. Both parties devoted considerable argument to whether the appeal is arguable. Strictly speaking, arguability of the appeal is not one of the three express requirements in Order 42 Rule 6(2). This Court must also guard against sitting on appeal over its own judgment or making findings which may embarrass the appellate court. 2. I have nevertheless considered the Memorandum of Appeal only to the limited extent necessary to satisfy myself that an appeal has genuinely been lodged and that the stay application is not being employed merely as a device to delay execution. 3. The six grounds challenge the Court’s findings regarding the Claimants’ employment status, conversion of casual employment under section 37 of the Employment Act, unfair termination, the monetary awards, costs and interest. 4. Without expressing any view whatsoever on whether those grounds will succeed, they are matters which properly fall for consideration by the appellate court. The Court need go no further. Record of Appeal 1. The Claimants have also argued that no Record of Appeal has been filed and served within the necessary timelines. No material before this Court establishes that the appeal has been struck out, withdrawn or otherwise declared incompetent by the appellate court. The Memorandum of Appeal itself is before the Court and the Applicant has identified the appeal as Mombasa ELRC Civil Appeal No. E085 of 2026. 2. Whether the Record of Appeal has been filed within the prescribed period and the consequences, if any, of non-compliance are matters that may properly fall within the procedural jurisdiction of the appellate court. In the absence of an order declaring the appeal incompetent, I decline to determine the stay application on the assumption that the appeal does not exist. Security for Due Performance 1. The third statutory requirement concerns security. The Applicant has offered KShs. 1,000,000. The Claimants contend that the full decretal amount together with taxed costs should be secured. 2. Order 42 Rule 6(2)(b) does not leave the amount or form of security solely to the Applicant. It is such security as the Court orders that must be provided. The Court therefore retains discretion to impose security appropriate to the circumstances. 3. I have considered the Applicant’s assertion in submissions that it has other employment-related decrees and deposits amounting to substantial sums. Those details are contained in submissions rather than in the Supporting Affidavit and are not supported by annexed orders, receipts or deposit documents. I therefore decline to treat them as proved facts capable of reducing the security otherwise appropriate in this matter. 4. The Applicant seeks to stay execution of the entire monetary decree. The Claimants have already obtained judgment and taxed costs and are entitled to protection against the risk that the decree becomes difficult to enforce should the appeal fail. 5. On the other hand, releasing the entire decretal sum to the Claimants at this stage would expose the Applicant to the very recovery risk that has persuaded the Court that substantial loss may occur. 6. In my view, the appropriate balance is therefore not to release the decretal amount to either party, but to preserve it pending appeal in a manner that protects both sides. 7. The Applicant’s proposed security of KShs. 1,000,000 is, in the circumstances, inadequate. The decree and taxed costs presently stand at KShs. 3,402,950. Since the Applicant seeks a stay of the whole decree, justice requires that the whole amount be secured. 8. A deposit of the full decretal sum into a joint interest-earning account ensures that, if the appeal succeeds, the Applicant will not face the difficulty of recovering monies already distributed; and if the appeal fails, the Claimants will have a secured fund against which the decree may be satisfied. Disposition 1. Having carefully balanced the competing rights of the parties, I am satisfied that this is an appropriate case for the Court to exercise its discretion in favour of a conditional stay. 2. Accordingly, the Notice of Motion dated 25th June 2026 is allowed on the following terms: 3. There shall be a stay of execution of the judgment delivered on 15th April 2026 and all consequential decree and orders pending the hearing and determination of Mombasa ELRC Civil Appeal No. E085 of 2026, Cyka Manpower Services Limited v Simon Munyao & 15 Others. 4. The stay is conditional upon the Respondent/Applicant depositing the entire decretal sum together with the taxed costs, being KShs. 3,402,950, in Court within thirty (30) days from the date of this Ruling. 5. In default of compliance with order (b) above within the stipulated period, the order of stay shall automatically lapse without the necessity of any further order of the Court, and the Claimants shall be at liberty to execute. 6. The costs of the application shall abide the outcome of the appeal. It is so ordered. **DATED, SIGNED AND DELIVERED ONLINE VIA MICROSOSFT TEAMS AT MOMBASA THIS 27TH AUGUST 2026.** **……………………………………………….** **EMILY M. MWAMUYE** **SENIOR RESIDENT MAGISTRATE**