[2023] KEELRC 1676 (KLR)

Ngugi v Befree Africa Credit Management Ltd (Cause 965 of 2022) [2023] KEELRC 1676 (KLR) (6 July 2023) (Ruling)

Neutral citation: [2023] KEELRC 1676 (KLR)

Republic of Kenya

In the Employment and Labour Relations Court at Nairobi

Cause 965 of 2022

AN Mwaure, J

July 6, 2023

Between

Allan Mukui Ngugi

Claimant

and

Befree Africa Credit Management Ltd

Respondent

Ruling

1. The applicant has filed an application vide notice of motion dated December 19, 2022 and prays for the following orders:1. That this application be certified as urgent.2. That pending the hearing and determination of this suit, this honourable court be pleased to issue an order directing the respondent to furnish security in the form of cash deposit in court or in a joint interest earning account to be held in the names of the parties advocates or such other form of security that the court may order to be sufficient to answer the entire claim in the sum of USD 172,099 as against the respondent3. That this honourable court be pleased to issue any or any further orders as it may deem just and expedient.4. That the costs of this application be provide for.

2. The claimant in his supporting affidavit depones that he was employed by the respondent on January 15, 2022 but on September 26, 2022 he was unfairly terminated.

3. He says he filed a suit praying for compensation of USD 174,119 and now is aware respondent is downscaling its operations in Kenya since July 2022 where it declared redundancies and terminated fixed contracts of the employees. He says senior managers were asked to take up redundancies on condition they would paid their difference accrued salaries. He says to date he has not been paid his dues. He says respondent is owed by Befree Africa INC a holding company in Delaware USA and all directors are foreigners. He says its bank accounts are in foreign banks.

4. He also says the respondent has no assets in Kenya.

5. He therefore says he is apprehensive that unless the respondent deposits security in court the ends of justice will not be met.

6. He prays this application be granted.

7. The respondent filed a replying affidavit duly deponed by Moses Nimor the respondent’s director. He says that they operate a start-up company that makes debt collection more scallable, efficient and friendly.

8. He says that the respondent had employed the claimant on December 21, 2021 as a managing director and the contract was to commence on January 15, 2022.

9. The claimant was contracted on a 6 months’ probation and the same could be extended for another 5 months. The claimants probationary period extended or another 5 months and finally on September 26, 2022 his employment was terminated on the grounds of unsuccessful probation period.

10. The deponent avers that they paid the claimant all his dues. He says that they paused their operations in Kenya but says they can offer security to the applicant on their particular assets.

11. In their submissions dated February 24, 2023 the respondents say they have not applied for winding up in the country and neither have they attempted to sell their assets to frustrate judgment.

12. The court has also considered the respective submissions by the respondent aforementioned and by the claimant dated February 14, 2014.

Determination 13. The claimant was employed from January 2022 and was on probation till September 26, 2022 when his employment as terminated and reasons given were unsuccessful probation.

14. He filed a claim for unfair termination and prayed inter alia for 12 months general damages equivalent to his salary.

15. He is therefore praying for security in form of deposit of US $ 172,099. That is the amount he has claimed in his statement of claim.

16. The respondent has opposed the application on the averment that claimant was not unlawfully terminated and secondly on the grounds that they still have assets in the country. They admit that they have paused their operations in Kenya but have not commenced winding up proceedings which they provide is an elaborate process.

17. The Court has considered the application, the replying affidavit and the respective submissions of the parties. The application is for an order for provision of security USSD 172,099. The main suit is yet to be heard and determined.

18. The prayers to provide for security are discretionary and must be exercised reasonably and regard must be given to the circumstance of each case.

19. In this case the respondent has admitted he is progressively restructuring its operations in Kenya due to its financial challenges since 2022. He has also annexed a list of their available assets in Kenya which are worthy US 28,207. These are not fixed assets and their value is bound to depreciate.

20. In the case No 488 of 2007 Jayesh H. Shah vs Manu Shah vs Nain Haria & Manu Shah where court held “ the law is settled that an order for security of costs is a discretionary one under order 26 of the Civil Procedure Rules. The discretion is however to be exercised reasonably and judicially by making reference to the circumstances of each case. Such matters as absence of known assets within the jurisdiction of court, absence of an office within the jurisdiction of court, inability to pay costs, the general financial standing or wellness of the plaintiff, the bonafide of the plaintiffs clam or any other relevant circumstances or conduct to the plaintiff or the defendant.

21. The case before me is merited in view of the fact that the respondents have admitted they are pausing their operations in Kenya. They have also indicated they do not have fixed assets in the country.

22. The claimant has filed this application without undue delay. The court therefore will allow the application to provide for security. However to order a deposit of such a colossal amount of money is like making a determination of the main suit without being heard. That would also not be just to the respondent. Justice must be availed to all the parties.

23. Instead the security to be provided in cash will be equivalent to kshs 1,500,000/-. In cash and to be held in a joint interest account of the respective advocates within 30 days from today’s date and then the case should proceed for hearing without undue delay.

Orders accordingly.

DATED, SIGNED AND DELIVERED VIRTUALLY IN NAIROBI THIS 6TH DAY OF JULY, 2023. ANNA NGIBUINI MWAUREJUDGEORDERIn view of the declaration of measures restricting Court operations due to the COVID-19 pandemic and in light of the directions issued by His Lordship, the Chief Justice on 15th March 2020 and subsequent directions of 21st April 2020 that judgments and rulings shall be delivered through video conferencing or via email. They have waived compliance with Order 21 Rule 1 of the Civil Procedure Rules, which requires that all judgments and rulings be pronounced in open Court. In permitting this course, this Court has been guided by Article 159(2)(d) of the Constitution which requires the Court to eschew undue technicalities in delivering justice, the right of access to justice guaranteed to every person under Article 48 of the Constitution and the provisions of Section 1B of the Procedure Act (Chapter 21 of the Laws of Kenya) which impose on this Court the duty of the Court, inter alia, to use suitable technology to enhance the overriding objective which is to facilitate just, expeditious, proportionate and affordable resolution of civil disputes.A signed copy will be availed to each party upon payment of Court fees.ANNA NGIBUINI MWAUREJUDGE