https://new.kenyalaw.org/akn/ke/judgment/keelrc/2026/1404

Rahman & 3 others v Dallo Airlines (Employment and Labour Relations Cause E543, E542, E544 & E545 of 2021 (Consolidated)) [2026] KEELRC 1404 (KLR) (25 May 2026) (Ruling) Neutral citation: [2026] KEELRC 1404 (KLR) Republic of Kenya In the Employment and Labour Relations Court at Nairobi Employment and Labour Relations Cause E543, E542, E544 & E545 of 2021 (Consolidated) HS Wasilwa, J May 25, 2026 Between Abdi Rahman 1st Claimant Kenneth Akoko 2nd Claimant Andrew Mboya 3rd Claimant Dennis Mwangi 4th Claimant and Dallo Airlines Respondent Ruling 1.The Respondent/ Applicant filed a Notice of Motion application dated 18th February 2026 seeking orders: -1.Spent2.That pending hearing and determination of the instant Application, an interim order of stay of execution of the judgement delivered by the Honourable Court on 21st January 2026, and decree dated 10th February, 2026 and all consequential proceedings.3.That pending hearing and determination of the Application dated 28th January, 2026, an interim order of stay of execution of the judgement delivered by the Honourable Court on 21st January 2026, and decree dated 10th February, 2026 and all consequential proceedings.4.That the court may issue any other orders it deems fit for the administration of justice.5.That the costs of this Application be in the cause. Respondent/Applicant’s Case 2.The Applicant avers that on 27th January, 2026, the firm of Orange Waswa & Opany Advocates served it with a Notice of Entry of Judgment. 3.On 28th January, 2026, it filed a Notice of Motion application seeking stay and setting aside of the judgment on grounds that the matter had proceeded ex-parte and it had not been served with summons or pleadings and was therefore unaware of the proceedings. 4.The Applicant states that the alleged service was effected through the email address daaloairlines-nbo@todaysonline.com which is not its email address. It contends that its correct email address is daalloairlines.nbo@todaysonline.com and that the variance arose from the use of a hyphen instead of a full stop/dot. 5.It avers that while unaware of the proceedings, the Claimants had approached it for settlement and parties agreed to settle the matter. 6.Upon hearing of the application, the Court directed service and scheduled the application for hearing on 3rd March, 2026 and it subsequently served the Claimants with the application and hearing notice. 7.The Applicant avers that at the time of filing the application dated 28th January, 2026, execution had not commenced though it apprehended that execution would issue. The Claimants thereafter obtained a decree dated 10th February, 2026 and instructed Anaclet Peter Araba t/a Pavillion Auctioneers to execute the same. 8.The Applicant contends that unless the instant application is certified urgent and stay granted, the application dated 28th January, 2026 and the proceedings scheduled for 10th March, 2026 will be overtaken by events. 9.It asserts that it stands to suffer financial loss in respect of a matter already settled and risks being condemned unheard contrary to the rules of natural justice; and that the Claimants would suffer no prejudice if the application is allowed and the matter heard on merits. 10.The Applicant further states that the Claimants were its employees and throughout their employment, salaries were paid in cash as mutually agreed by the parties. It avers that all payments including salaries, overtime, allowances, reimbursements and other benefits were made in cash. 11.The Applicant states that on 29th October, 2021, the parties mutually agreed to part ways amicably due to diminishing business opportunities and financial constraints which would eventually result in redundancy of all employees. 12.It is the Applicant’s case that the terms of the agreements were documented in form of letters which were executed by the respective claimants on various dates when they came to collect their final dues. 13.It states that Mr. Andrew Mboya was paid USD 2,250 on 29th October, 2021; Mr. Denis Mwangi was paid USD 3,900 on 5th November, 2021; Mr. Kenneth Akoko was paid USD 8,550 on 5th November, 2021; and Mr. Abdirahman Mahat was paid USD 3,500 on 29th October, 2021. 14.The Applicant avers that through the said agreements, the Claimants acknowledged receipt of their final dues in full and final settlement and confirmed that they had no further claims against the Applicant. It further states that its Country Director-Kenya, Parveen Akhtar, witnessed the Claimants acknowledging receipt of payment and signing the agreements. 15.It is the Applicant’s case that at the time of execution of the agreements there were no salary arrears pending. It contends that it would be illogical for a party to accept and sign for final dues while still having outstanding salary arrears not captured in the agreements. The Applicant therefore asserts that the present claims amount to an attempt by the Claimants to unjustly enrich themselves and exploit the cash payment arrangement previously utilised during employment. 16.The Applicant reiterates that proper service of pleadings was never effected and consequently the matter proceeded ex-parte. It avers that the alleged service was effected using erroneous email addresses daalloairlines-nbo@todaysonline.com and daalloairlines.nbo@todaysonline.com which do not belong to it. It states that the variances included the use of a single “l” instead of a double “l” in the word “daallo” and the use of a hyphen instead of a full stop/dot. 17.The Applicant further contends that despite the Claimants being aware of its offices having worked there for many years, they never attempted physical service during the proceedings and only effected physical service after judgment through service of the Notice of Entry of Judgment. It states that it is left to wonder whether this was a deliberate attempt to ensure the matter proceeded undefended while misrepresenting facts before the Court. 18.It is the Applicant’s case that the application to set aside the judgment is merited because service was not properly effected thereby condemning it unheard contrary to the rules of natural justice. 19.The Applicant contends that it has a defence raising triable issues including that the dispute had already been settled through the agreements executed by the parties; that the agreements were not disclosed by the Claimants during trial; that the agreements only surfaced after judgment in response to the application; and that the agreements remain binding as they were never challenged, disputed or nullified by a court of competent jurisdiction. 20.The Applicant further states that any challenge to the validity of the agreements and the issue of alleged salary arrears are matters requiring canvassing and determination by the Court. It avers that the application was brought without undue delay. Claimants/Respondents’ Case 21.In opposition to the application, the Claimants/Respondents filed a replying affidavit dated 13th March 2026, sworn by Dennis Mwangi Gakure, the 4th Claimant/Respondent herein. 22.The Respondents aver that the application is misconceived, bad in law and ought to be struck out. They contend that the application is predicated upon old ELRC Rules which were revoked by Rule 84 of the ELRC Rules, 2025 and that the application ought to have been brought under Rule 74 of the ELRC Rules. 23.It is their case that the Application is fatally defective and merely intended to delay them from enjoying the fruits of their judgment. 24.The Respondents state that on 23rd April, 2021, the firm of JAB Orengo Advocates issued a final reminder to the Applicant’s CEO regarding the arrears due to them. However, despite the demand, the Applicant failed to respond thereby necessitating the filing of ELRC Causes Nos. E542, E543, E544 and E545 of 2021 on 30th June, 2021 which were subsequently consolidated under ELRC Cause No. E543 of 2021. 25.The Respondents aver that their advocates extracted summons dated 29th October, 2021 and effected service through email. The email never bounced back, therefore, it was successfully delivered to all recipients. 26.They further contend that summons and pleadings were duly served upon the Applicant’s management including one Mr. Yassin, a Director based in Dubai, one Cocker Parveen, the Manager in Kenya and one Mr. Babu, the Finance Manager in Dubai. 27.It is the Respondents’ case that on 3rd November, 2021, the Applicant appointed the firm of Shapley Barret & Co. Advocates to represent it though the said firm never filed any defence documents despite being properly on record. 28.The Respondents state that vide a letter dated 12th November, 2021, the Applicant through its then advocates claimed that the matter had been settled and attached letters allegedly signed by the Claimants acknowledging receipt of final dues though no proof of payment was provided. They contend that one is left wondering how the said advocates obtained information on payment if indeed they had not been instructed as alleged by the Applicant. 29.The Respondents aver that after the failure by the Applicant to file a defence within time, they filed an application for interlocutory judgment on 9th December, 2021. Throughout the proceedings, service was consistently effected through the email address appearing on the Applicant’s official website as well as upon the firm of Shapley Barret & Co. Advocates who were on record, and none of the emails bounced back. 30.The Respondents contend that on 6th November, 2023, the matter came up before Hon. Justice Abuodha who directed that the matter should proceed as undefended and that the Claimants take a formal proof hearing date at the Registry. 31.They aver that on 18th November, 2024, the firm of Shapley Barret & Co. Advocates filed an application seeking leave to cease acting for the Applicant. The said application was served upon the Applicant on 30th November, 2024 through the email address it admits belongs to it namely daaloairlines-nbo@todaysonline.com. The admission is contained in paragraph 6 of the Applicant’s application dated 28th January, 2026. 32.The Respondents state that the application to cease acting was heard and allowed on 20th January, 2025. Despite service of the said application, the Applicant never appeared in person or through another advocate to seek leave to file documents out of time. 33.It is the Respondents’ case that the Applicant has not approached the Court with clean hands as in all the applications dated 28th January, 2026, 18th February, 2026 and 26th February, 2026, it never sought orders to cross-examine Advocate Annette C. Anyango of Shapley Barret & Co. Advocates on how instructions were obtained, nor orders to cross-examine the process server on service of the documents. 34.The Respondents aver that the matter proceeded for formal proof hearing on 21st May, 2025 where evidence was tendered on behalf of all the Claimants and thereafter written submissions dated 9th July, 2025 were filed. Although judgment had initially been scheduled for 28th November, 2025, it was eventually delivered on 21st January, 2026 awarding the Decree Holders Kshs. 12,137,000/= plus costs. 35.The Respondents deny the Applicant’s assertion that it was never served and contend that the Applicant was aware of the proceedings as early as 2021 when its advocates, Shapley Barret & Co. Advocates, engaged their advocates on an alleged settlement. 36.The Respondents contend that the issue raised regarding the variance in the email address, being the use of a hyphen instead of a dot, is a mere technicality intended to delay justice. They state that the email address used was obtained from the Applicant’s website and that no emails were ever returned as undelivered. 37.It is the Respondents’ case that the Applicant is guilty of gross laches and demonstrated disregard for the court process by failing to follow up on proceedings it knew had been instituted as early as 2021. They finally assert that the judgment delivered on 21st January, 2026 was the culmination of a fair and transparent judicial process and that setting it aside would occasion them undue prejudice and further delay justice which they have pursued for nearly five years. Applicant’s Submissions 38.On whether there was proper service, the Applicant submitted that the execution proceedings were in breach of Section 94 of the Civil Procedure Act which permits execution of a decree before taxation of costs only with leave of the Court. The purpose of the provision is to safeguard against piecemeal and vexatious execution. It cited 39.The Applicant courts have consistently affirmed that execution before taxation of costs without leave is irregular. Reliance was placed on Ngunyi v Mohammed [2026] KEHC 2736 (KLR) where the Court held that: “Section 94 does not distinguish between execution for the decretal sum and execution for costs. It regulates the timing of execution of a High Court decree before costs are ascertained. Leave is the statutory control. I am persuaded that, in the absence of leave, the execution process culminating in the issuance of warrants of attachment was procedurally irregular. The Court cannot lend its aid to a process that is undertaken in clear disregard of an express statutory requirement. This position accords with the long-standing principle, articulated in Kenyan jurisprudence, that courts will not sanction acts founded on illegality.” 41.It is the Applicant’s submissions that no leave was sought before execution and the Respondents have not controverted that position. It therefore submitted that the execution proceedings were irregular, unlawful and incapable of being sustained and prayed that the warrants issued be recalled and set aside. 42.On whether there was proper service upon the Applicant, it was submitted that summons and pleadings were never properly served, thus, the judgment entered was irregular. Reliance was placed on Court of Appeal decision in James Kanyiita Nderitu & another v Marios Philotas Ghikas & another [2016] KECA 470 (KLR). 43.The Applicant submitted that being a company incorporated under the Companies Act, service ought to have first been effected in accordance with Order 5 Rule 3 of the Civil Procedure Rules and that electronic service could only complement such service. They stated that this position was echoed in on Mogara v Spur Security Services Limited [2023] KEELRC 3199 (KLR). 44.The Applicant submitted that throughout the proceedings the Respondents never attempted physical service and only physically served the Notice of Entry of Judgment. It denied service was done through the alleged email addresses on the ground that the same were alien to it and that the only official email associated it is daalloairlines-nbo@todaysonline.com as reflected in its letterhead. 45.The Applicant further submitted that the burden of proving ownership of the disputed email addresses and proof of delivery rests with the Respondents. It was argued that pursuant to Order 5 Rule 22B (4) of the Civil Procedure Rules, the process server effecting electronic service is required to file an affidavit of service accompanied by an electronic mail delivery receipt confirming service. It cited Sifuna & Sifuna Advocates v Patrick Simiyu Khaemba [2021] KEELC 113 (KLR) where the Court held:“Therefore, the drafters of Sub-rule 4 of Order 5 Rule 22B decided in their wisdom to include the requirement that “a delivery receipt” has to be filed with the Affidavit of Service by the authorized process server. I reiterate that a sent email is not the same as a delivery receipt. The Sub-rule 4 abovementioned provides that a sent email must be accompanied by evidence that the email was duly received. The Respondent did not attach the delivery receipt herein. It therefore leaves doubt as to whether or not the Applicant actually received the email that was sent on 28/9/2021 to his email at 11.46 am.” 46.It was submitted that the email addresses relied upon by the Respondents did not belong to the Applicant and in any event no delivery receipts were attached to prove service. The Applicant submitted that after the alleged cessation of acting by the firm of Sharpley Barret Advocates, no mention notices, hearing notices or judgment notices were ever served upon it. 47.The Applicant thus urged the Court to find that there was no proper service and that the default judgment ought to be set aside ex debito justitiae as a matter of right in line with James Kanyiita Nderitu & another v Marios Philota Ghikas & another [2013]eKLR. 48.On whether the Applicant had a defence raising triable issues, it was submitted that the affidavits of Mohamed Ibrahim Yassin and Parveen Akhtar together with the draft defence to the Memorandum of Claim raises triable issues including: the Respondents salaries were always paid therefore there were no salary arrears were due as claimed by the Respondents; the disputes had already been settled out of court through settlement agreements executed by the Claimants; and that the Claimants were guilty of non-disclosure for failing to disclose the said agreements.These are triable issues requiring interrogation through a full hearing where parties would call witnesses and adduce evidence. 49.The Applicant submitted a defence need only raise a bona fide triable issue deserving judicial interrogation during trial. Reliance was placed on Tree Shade Motors Ltd -vs- DT Dobie &Anor [1995-1998] 1EA 324 wherein it was held:-“Even if service of summons is valid, the judgment will be set aside if defence raises triable issue. Where a draft defence was tendered together with an application to set aside a default judgment, the court hearing the application was obliged to consider if it raised a reasonable defence to the plaintiff’s claim. Where the defendant showed a reasonable defence on the merits, the court could set the ex-parte judgment aside.” 50.The Applicant therefore submitted that the draft defence disclosed triable issues warranting the setting aside of the ex parte judgment. 51.On delay, the Applicant submitted that judgment was delivered on 21st January, 2026 and the Notice of Entry of Judgment served on 27th January, 2026. The Applicant moved the Court on 28th January, 2026 immediately upon becoming aware of the judgment and therefore without undue delay. 52.It is the Applicant’s submission that the judgment was irregular for want of proper service, the defence raised triable issues and that the application had been filed timeously. The Applicant thus prays that the Court allows the application and sets aside the impugned judgment either as a matter of right or in exercise of the Court’s discretion. 53.On costs, the Applicant submitted that costs follow the event though the Court retains discretion to order otherwise. Claimants/Respondents’ Submissions 54.The Respondents submitted on three issues: Whether the Application was brought under the correct provisions of the law; Whether the Respondents were aware of these proceedings; What are the available reliefs. 55.On the first issue, the Respondents submitted that the Application was fatally defective and ought to be struck out in limine. They argued that the application is premised upon old ELRC Rules which had been revoked by Rule 84 of the ELRC Rules 2025 and that the application ought to have been brought under Rule 74 of the ELRC Rules 2025 which governs applications of that nature. 56.Relying on the Supreme Court decision in Hassan Ali Joho & another v Suleiman Said Shahbal & 2 others [2014]eKLR, the Respondents submitted that it is trite law that a court of law can only be moved under the correct provisions. Any application grounded on a repealed or inapplicable rule is void ab initio and cannot be cured by amendment or discretion of the Court. They thus argued that the Respondent, who has access to learned counsel, cannot plead ignorance of the applicable law. 57.The Respondents submitted that Kenya’s legal system is adversarial in nature and that the Court ought not aid a litigant, particularly one represented by counsel, who disregards mandatory procedural requirements. They argued that a defective application confers no right to be heard. 58.The Respondents further submitted that procedural rules are not empty formalities but exist to ensure fairness, order and efficiency in administration of justice. 59.On whether the Applicant was aware of the proceedings, the Respondents submitted that the allegation that the Applicant was never served or aware of the proceedings was false and contradicted by documentary evidence they produced before this court. 60.It was submitted that the Applicant’s own conduct demonstrated awareness of the proceedings. On 3rd November 2021, shortly after service to the Applicant, its management appointed the firm of Shapley Barret & Co. Advocates who thereafter engaged the Claimants’ advocates through correspondence dated 12th November, 2021 claiming that the dispute had been settled. 61.It is the Respondents’ submission that a party which appoints advocates and engages in settlement negotiations cannot subsequently claim ignorance of proceedings. The Applicant expressly acknowledged ownership of the email address daaloairlines-nbo@todaysonline.com, therefore, it cannot approbate and reprobate by admitting ownership of the email address while denying receipt of communications sent thereto. 62.The Respondents submitted that daaloairlines-nbo@todaysonline.com is the same email address through which the application by Shapley Barret & Co. Advocates seeking leave to cease acting was served upon the Applicant. They thus questioned why the Applicant never appointed another advocate or sought leave to act in person upon being served with the said application. Further, the Applicant never addressed these matters in its Further Affidavit. 63.The Respondents submitted that the Applicant’s assertion that salaries were paid in cash is implausible and unsupported by evidence. They argued that the alleged settlement agreements had not been annexed for the Court’s benefit contrary to Section 107 of the Evidence Act which places the burden of proof upon the party asserting existence of a fact. 64.It was further submitted that even assuming the settlement position was true, it remained consistent with the correspondence previously issued by Shapley Barret & Co. Advocates and therefore raised the question as to how the said advocates obtained such information if indeed they had never been instructed by the Applicant. The Respondents argued that the Applicant failed to seek cross-examination of the process server or any advocate from Shapley Barret & Co. Advocates to clarify how instructions had been obtained and documents served. 65.The Respondents submitted that in November, 2023, the Claimants served a Mention Notice through the same email address upon both Daallo Airlines and Shapley Barret & Co. Advocates and at no point was the address disputed. Therefore, the allegation of non-service was merely a red herring intended to delay the Claimants from enjoying the fruits of their judgment. 66.On the reliefs sought, the Respondents submitted that even if the Court were inclined to consider the Application on merits, which they urged the Court not to do, the balance of justice still favoured preservation of the judgment. 67.The Respondents submitted that the principles governing setting aside of default judgments require an Applicant to demonstrate sufficient reason for non-attendance, a plausible defence on merits and that it is in the interests of justice to set aside the judgment. 68.It was submitted that the Applicant failed on all three limbs. The Respondents argued that no sufficient reason had been offered for failure to participate in the proceedings since the Applicant had been served, appointed advocates and thereafter gone silent for years. The applications filed in January and February, 2026 were a transparent attempt to relitigate issues long settled by the judicial process. 69.The Respondents further submitted that the Applicant was guilty of gross laches by failing to follow up on proceedings it had known about since 2021 and that such conduct could not justify interference with a judgment delivered in 2026. 70.On the alleged settlement, the Respondents submitted that the claim was unsubstantiated. The letters from Shapley Barret & Co. Advocates dated 12th November, 2021 merely alleged settlement but were unsupported by proof of payment; no bank transfers, receipts or other financial instruments had been produced to demonstrate that the Claimants were paid. 71.The Respondents submitted that the judgment delivered on 21st January, 2026 was the culmination of a fair and transparent judicial process conducted over nearly five years and that setting it aside without compelling justification would undermine the integrity of the judicial process and the Claimants’ right to access justice. 72.It is the Respondents submission that the Application is incompetent for having been brought under incorrect provisions of the law; that the Applicant was fully aware of the proceedings; and that the Application amounted to an abuse of the Court process. Therefore, the same should be dismissed with costs to the Claimants. 73.I have examined all the averments and submissions of the parties herein. The applicants seek orders before this court to stay execution of the judgment delivered by this court on 21st January 2026 on the ground that they were never served with summons to enter appearance in the cause. 74.I have looked at the pleadings herein and note that summons were indeed served and the firm of Shapley Barret & Co. advocates came on record. On 18th November 2024, this firm filed an application to cease acting for the respondents. Had the respondents not been served as they alleged, Shapley & Barret would not have come on record to represent them. The averment that summons to enter appearance were never served nor were served on a wrong address does not therefore add up. 75.The application for stay of execution is therefore found without merit and is dismissed accordingly with costs. DATED, SIGNED AND DELIVERED VIRTUALLY AT NAIROBI THIS 25TH DAY OF MAY, 2026.HELLEN WASILWAJUDGE