Nairobi Java House has secured a temporary reprieve after the Employment and Labour Relations Court halted execution of a judgment ordering the company to pay a former executive more than $208,000 (Sh26.9 million) over disputed share benefits.
The court granted the restaurant chain an order halting the payout to former Chief Operations Officer Leonard Mudachi, pending the hearing and determination of an appeal.
However, the court ruled that the suspension would only take effect if Java deposits the entire decretal sum of $208,293 (Sh26.9 million) in a joint interest-earning account held by lawyers for both parties within 45 days.
It warned that failure to deposit the funds within the said period would automatically lift the stay order and allow execution to proceed.
“Given the substantial amount awarded to the claimant the court grants the respondent a stay of execution… on condition that the respondents deposit the decretal sum in a joint interest earning account,” the court said.
The dispute stems from a September 25, 2025 judgment in which the court ordered Nairobi Java House and its parent firm, Java House Mauritius Limited, to pay Mr Mudachi the value of vested shares under the company’s Long Term Incentive Plan (LTIP).
In that judgment, the court dismissed claims that Mr Mudachi had been unfairly dismissed and found that he was entitled to payment for stock units allocated to him during his employment.
Mr Mudachi had served as Business Development Director before being promoted to Chief Operations Officer (COO). His position was later declared redundant in November 2015 after Java reviewed its operational structure.
The court in the 2025 judgment ruled that the redundancy was lawful and followed due procedure, noting that the COO position was abolished and remained unfilled for several years. Evidence before court showed that Mr Mudachi was allocated 3.75 units under the scheme, 2.58 as COO and 1.17 as Business Development Director.
He argued that these units vested after a change-of-control transaction in 2017 when ECP Africa exited its investment in Java House through a sale valued at about Sh9.7 billion.
The court found that the company failed to rebut the claim that the units had value following the transaction.
“Admission by the advocates for the respondents… leads the court to the inevitable conclusion that the Claimant had proved his claim on a balance of probability,” the court said.
The court therefore entered judgment in Mudachi’s favour and ordered the respondents to pay $208,293.75, plus interest and legal costs.
Following the decision, Nairobi Java House filed a notice of appeal and applied for a stay of execution, arguing that it had an arguable appeal and risked suffering substantial loss if payment proceeded before the appeal was heard.
The company also indicated it was willing to provide security for the decretal amount.
Mudachi opposed the application but proposed that the funds be secured in a joint account, citing concerns that ongoing corporate restructuring could complicate recovery if the appeal failed.
The court agreed with the proposal, allowing the stay while safeguarding the claimant’s award.
