[2019] KEELRC 1996 (KLR)
The Court held that while a board resolution is generally required for a company to commence legal proceedings, this requirement does not strictly apply where the juristic person is a respondent and its directors are also sued in their personal capacities. In such circumstances, insisting on a board resolution would...
Source-derived case information.
- Citation
- [2019] KEELRC 1996 (KLR)
- Parties
- Applicant: Okiya Omtatah Okoiti; Respondent: Ministry of Health; Respondent: Public Service Commission; Respondent: Hon. Attorney General; Respondent: Dr. Hezekiah Chepkwony; Respondent: Dr. Pius Wanjala; Respondent: Board of Management for the National Quality Control Laboratory; Interested Party: Pharmacy & Poisons Board
- Court
- Employment and Labour Relations Court
- Court Station
- Employment and Labour Relations Court at Nairobi
- Jurisdiction
- Kenya
- Case Number
- Cause 86 of 2017
- Procedural Posture
- Constitutional Petition / Ruling on Interlocutory Application to Strike Out Affidavit
- Outcome
- application dismissed with costs
- Judges
- MSA Makhandia
- Legal Topics
- Disciplinary Proceedings, Juristic Person Affidavits, Board Resolution Requirement, Conflict of Interest, Right to Fair Administrative Action
- Source Language
- en
Source-derived case record
Summary, issues, holding and outcome
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Parties
Okiya Omtatah Okoiti
Applicant
Ministry of Health
Respondent
Public Service Commission
Respondent
Hon. Attorney General
Respondent
Dr. Hezekiah Chepkwony
Respondent
Dr. Pius Wanjala
Respondent
Board of Management for the National Quality Control Laboratory
Respondent
Pharmacy & Poisons Board
Interested Party
Procedural Posture
Constitutional Petition / Ruling on Interlocutory Application to Strike Out Affidavit
Legal Issues
- 1 Whether the affidavit sworn by Dr. George Wang'ang'a on behalf of the 6th Respondent should be struck out for lack of proper authority.
- 2 Whether a board resolution is mandatory for a juristic person to file affidavits in response to proceedings where it is a respondent, not an applicant.
- 3 Whether conflict of interest arises when directors or deputy directors swear affidavits in such circumstances.
Ratio Decidendi
The Court held that while a board resolution is generally required for a company to commence legal proceedings, this requirement does not strictly apply where the juristic person is a respondent and its directors are also sued in their personal capacities. In such circumstances, insisting on a board resolution would be illogical and could create a more serious conflict of interest. The Court found that the affidavit in question was accompanied by a letter from the Chairperson and substantive Director of the 6th Respondent, authorising Dr. Wang'ang'a to swear the affidavit. The Petitioner failed to disprove the validity of this letter. Therefore, the application to strike out the affidavit...
Court Disposition
application dismissed with costs
Orders
- The application dated 20 July 2018 is dismissed with costs to the Respondents.
Full Case Text
Judgment text and source record
55 paragraphs
REPUBLIC OF KENYA
IN THE EMPLOYMENT AND LABOUR RELATIONS COURT AT NAIROBI
PETITION NO. 86 OF 2017
IN THE MATTER OF: ARTICLES 19, 20, 22(1) & (2)(c), 23, 162(2)(a), 165(5)(b), AND 258(1) & (2)(c) OF THE CONSTITUTION
IN THE MATTER OF: THE ALLEGED CONTRAVENTION AND VIOLATION OF THE NATIONAL VALUES AND PRINCIPLES OF GOVERNANCE IN ARTICLES 1, 2, 3(1), 10(1) & (2)(a) & (c), 73, 75(1) AND 232(1)(a),(d),(e), (f) & (2)(b) AND 259(1) OF THE CONSTITUTION OF KENYA, 2010
IN THE MATTER OF: THE ALLEGED CONTRAVENTION AND VIOLATION OF THE RIGHTS AND FUNDAMENTAL FREEDOMS UNDER ARTICLES 27, 41(1) AND 47 OF THE CONSTITUTION OF KENYA, 2010
IN THE MATTER OF: THE ALLEGED FAILURE TO TAKE DISCIPLINARY ACTION AGAINST DR. HEZEKIAH CHEPKWONY AND DR. PIUS WANJALA
BETWEEN
OKIYA OMTATAH OKOITI............................................PETITIONER
v
MINISTRY OF HEALTH...........................................1st RESPONDENT
PUBLIC SERVICE COMMISSION........................2nd RESPONDENT
HON. ATTORNEY GENERAL................................3rd RESPONDENT
DR. HEZEKIAH CHEPKWONY.............................4th RESPONDENT
DR. PIUS WANJALA.................................................5th RESPONDENT
BOARD OF MANAGEMENT FOR THE
NATIONAL QUALITY CONTROL
LABORATORY..........................................................6th RESPONDENT
AND
PHARMACY & POISONS BOARD................INTERESTED PARTY
RULING NO. 4
1. Before Court is a motion dated 20 July 2018 by the Petitioner seeking orders
1. …
2. THAT the 6th Respondent’s replying affidavit dated 8th May 2018, sworn on its behalf by Dr. George Wang’ang’a be struck out from these proceedings.
3. THAT the 5th Respondent be compelled to demonstrate the authority to swear affidavits on behalf of the 4th Respondent.
4. THAT the costs of this application be provided for.
2. When the application came up directions on 31 July 2018, the Court directed the Respondents to file their replies thereto on or before 17 August 2018 and scheduled mention for 25 October 2018 to confirm compliance and give further directions. The Court at the same sitting issued directions in respect of an application dated 25 July 2018 which had been filed on the same day.
3. The Court did not sit on 25 October 2018 and when the parties appeared on 17 December 2018, the 1st to 3rd Respondents indicated that they would not participate in the application because it was directed at the 6th Respondent.
4. The Petitioner was absent and the Court sent the file back to the registry.
5. On 1 February 2019, the Petitioner moved the Court under certificate of urgency and when the parties appeared on 14 February 2019, the parties informed the Court that submissions had been exchanged. The Court reserved ruling to today.
6. The Petitioner had filed submissions in support of the application on 24 October 2018 and a 3rd supplementary affidavit on the same day.
7. The Court has not been able to locate the Respondents grounds of opposition/replying affidavit and/or submissions on file.
8. The grounds advanced in support of the application were that the 6th Respondent is a juristic person with the power to recruit staff and a secretariat headed by a Director who acts as the Chief Executive Officer and that because the powers of the Director are circumscribed by section 351 of the Pharmacy and Poisons Act, the Deputy Director could not purport to swear and file an affidavit on its (6th Respondent’s) behalf and that there was no board resolution authorising Dr. Wang’ang’a to swear any affidavits in respect of the proceedings.
9. The Petitioner drew the attention of the Court to the case of East African Portland Cement Ltd v the Capital Markets Authority & 5 Ors citing the Ugandan case of Bugerere Coffee Growers Ltd v Seraduka & Ar (1970) EA 147 where the legal principle that a board resolution is a prerequisite authorising institution of legal proceedings.
10. The Petitioner contended that since Dr. Wang’ang’a was not a member of the 6th Respondent and was a junior to the 4th and 5th Respondents, he did not have the competence to swear the affidavit filed in Court.
11. According to the Petitioner, Dr. Wang’ang’a was incapacitated by conflict of interest as he had sworn an affidavit in support of the 4th and 5th Respondents case.
12. The Court has given due consideration to the application, the grounds, the affidavits thereto and the submissions.
13. It is correct that a long chain of authorities require that a company board issue a resolution allowing the commencement of legal proceedings in the name of the company. There are legal and pragmatic reasons why that is so.
14. In the present case, the juristic person did not commence litigation. It was sued by the Petitioner who at the same time included the juristic persons’ Director and Deputy Directors, not as Interested Parties, but as Respondents.
15. The Director and Deputy Director have been sued in their names by the Petitioner who is seeking a Court order to compel the juristic person to take disciplinary against the Directors.
16. In such a scenario, the law and common sense must of necessity walk hand in hand. It would be illogical to expect the persons the juristic person is being asked to take disciplinary action against to swear affidavits on behalf on the juristic person.
17. In the view of the Court, that would be an exhibition of conflict of interest more serious than having the Deputy Director, Dr. Wang’ang’a swearing the affidavit.
18. The affidavit under challenge has expressly deposed that the deponent was duly authorised by the 6th Respondent to swear the affidavit. The deponent has also attached to the affidavit a letter signed by the Chairperson of the 6th Respondent and the substantive Director indicating that authority had been given.
19. It would not be sufficient therefore for the Petitioner to merely assert in a rival affidavit that the deponent lacks the capacity, or attempt to coerce the deponent to produce a board resolution when there is a letter whose validity has not been disproved.
20. The Court finds that the application dated 20 July 2018 lacks merit and orders it dismissed with costs.
21. The Court is concerned that after it gave directions towards the hearing of the Petition on 5 April 2018 and on 18 May 2018, the parties have been minded to file applications after application. Had the parties adhered to the directions, the hearing of the Petition could have been concluded on 24 July 2018.
Delivered, dated and signed in Nairobi on this 22nd day of March 2019.
Radido Stephen
Judge
Appearances
Petitioner in person
1st to 3rd Respondents Ms. Odhiambo, State Counsel, Office of the Attorney General
For 4th to 6th Respondents Ms. Kiarie/Mr. Muturi instructed by Kinyanjui Njuguna & Co. Advocates
For Interested Party did not participate
Court Assistant Lindsey