1. The Applicants filed application dated 26th June,2023. The Application was brought under Order 42, Rule 6 of the Civil Procedure Rules,2010 and Rules 3 and 17 of the Employment and Labour Relations Court (Procedure) Rules 2016 seeking for orders of stay of execution of judgement and decree of Hon. B. Cheloti PM delivered on 12th May,2023 in Kajiado CMELRC No. E001/2023 pending hearing and determination of the application and the Appeal herein.
2. The application was supported by the Affidavit of MICHAEL WAMAE the 1st Applicant herein who averred that by a judgment delivered on 12th May,2023 Honourable B. Cheloti(PM) entered judgment on a claim for wrongful termination against the Appellants.
3. The Applicants averred that they instructed their Advocates to lodge an appeal against the Judgment which was duly filed on 7th June,2023 and they served the Respondent’s advocates.
4. The Applicant averred that the 30 day stay pending appeal granted by the court lapsed on the 12th June,2023 and the Respondent may proceed to execute the decree.
5. The Applicant averred that the Appeal has high chances of success. That if the stay orders were not granted the appeal will be rendered nugatory and an academic exercise since the Respondent has no known source of income to reimburse the Applicant the decretal sum incase the appeal is successful.
6. The Applicant averred that it is ready and willing to provide security by providing a bank guarantee for entire decretal sum as may be determined by the court to ensure due performance of the decree and any other directions by the court.
7. In reply the Respondent filed their replying Affidavit sworn on 11th August, 2023 and averred that the Application was a delaying tactic made in bad faith, misconceived and was intended to deny him the fruits of the Trial Courts Judgment and therefore ought to be dismissed with costs to the Respondent.
8. The Respondent averred that this Honourable Court’s power to grant or refuse an Application for stay of execution pending appeal is discretionary and the threshold for granting orders for stay of execution have not been satisfactorily met by the Applicants.
9. The Respondent averred that the Applicants herein have not adequately established any factors which show that execution will create a state of affairs that will irreparably affect them or negate the very essential core of the Applicants as the successful party in the Appeal. That execution is a lawful process and the fact that the process of execution is likely to be put in motion, by itself, does not amount to satisfaction of any substantial loss and does not suffice as sufficient cause.
10. The Respondent averred that the appeal herein raises no triable issues and had minimal chances of success and in any event, he was capable of refunding the entire Decretal sum if the Appeal herein is decided against him.
11. The Respondent further averred that in the event stay is granted, it was his prayer that the Appellant be ordered to deposit the entire decretal sum in an interest earning account, in the joint names of the advocates on record for the parties, within a period specified by the Court, as security for due performance of the decree/judgment debt should the Appeal fail
12. The Respondent filled a further Affidavit sworn on 29th November,2023 by its advocate and averred that the decree was issued long after filing of this application where the decree holder was awarded decretal sum of Kshs 540,405.67/= and costs of Kshs 114,195.00/=. The Respondent delayed in filing his submissions waiting to spell out the amounts.
13. Application was disposed of by written submissions with each party submitting in support of their respective pleadings.
DETERMINATION
14. The Civil Procedure rules under Order 42 Rule 6 gives the grounds upon which this Court exercises the discretion to grant a stay of execution which stipulates as follows;
(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.
15. In Nicholas Stephen Okaka & another v Alfred Waga Wesonga [2022] eKLR the court in support of the above provision held as follows: -
Therefore, an applicant for stay of execution of a decree or order pending appeal is obliged to satisfy the conditions set out in Order 42 Rule 6(2), aforementioned: namely
(a) that substantial loss may result to the applicant unless the order is made,
(b) that the application has been made without unreasonable delay, and
(c) that such security as the court orders for the due performance of such decree or order as may ultimately be binding on the applicant has been given.
16. As to what substantial loss is, it was observed by Gikonyo J in the case of James Wangalwa & Anor v Agnes Naliaka Cheseto [2012] eKLR. Where the learned Judge observed:
“No doubt, in law, the fact that the process of execution has been put in motion, or is likely to be put in motion, by itself, does not amount to substantial loss. Even when execution has been levied and completed, that is to say, the attached properties have been sold, as is the case here, does not in itself amount to substantial loss under Order 42 Rule 6 of the CPR. This is so because execution is a lawful process…The applicant must establish other factors which show that the execution will create a state of affairs that will irreparably affect or negate the very essential core of the Applicant as the successful party in the appeal. This is what substantial loss would entail.
17. As observed in the cases cited above, the Applicants stated that they knew the Respondent as a person with no income who cannot restitute the Applicant in case appeal succeeds. The Respondent submitted that he was able to refund the decretal sum without explaining how he can raise the full amount. This therefore means without any explanation that the Respondent may not be in a position to restitute the Applicants in case the Appeal succeeds.
18. Whereas I agree that the process of execution in itself does not amount to substantial loss, I am also awake to the fact that this court must balance both interests of the Appellant who has brought in an appeal and the interest of the Respondent who has to enjoy fruits of its judgment. This follows the discretion of the court which should be exercised judiciously not to prevent an appeal as was held in Court of Appeal case of Butt v Rent Restriction Tribunal (1982) KLR 417.
19. There has been no inordinate delay in bringing the instant application and the appeal since the judgment and decree being appealed against was delivered on the 12.5.2023 and the Memorandum of Appeal filed on 7th June,2023 and this application filed on the 26th June, 2023 which was before 30 days of appeal expired and the application filed 14 days after the stay of 30 days expired.
20. As to security of costs, the Applicant is willing to comply with that condition on security for the due performance of the decree appealed from by providing a bank decree for the entire amount. The Respondent has persuaded the court for the amount to be deposited in a joint earning account of both parties’ advocates.
21. The court is therefore of the view that the Applicant has met the conditions for grant of stay of execution and should be granted the same so that its appeal is not an academic exercise and vindicate its dissatisfactions with the lower court judgment in the said appeal.
22. The application is therefore found merited and is hereby allowed with costs abiding in the outcome of the appeal..
23. The Applicants to deposit the decretal sum as security for cots in an interest earning account operated in the name of both advocates.
24. It is so ordered.
Dated at Nairobi this 26th day of January, 2024
Delivered virtually this 26th day of January, 2024
Abuodha Nelson Jorum
Judge