The High Court’s Labour Division has ordered the arrest and detainment of the Managing Director of Chinese Hotel, Shichang Zhou, for failure to pay his former employee, Xiao Long Zhan, a sum of 35m/-, as ordered by the Court.
Judge Yose Mlyambina issued such order recently after granting an application for lifting veil of incorporation lodged by the employee, the Applicant, he lodged against the Chinese Hotel and Shichang Zhou, the respondents.
“….the application is hereby granted. The second Respondent (Shichang Zhou) be arrested and detained in accordance with Section 44 of the Civil Procedure Code. It is so ordered,” the judge declared.
He noted from the records that on April 28, 2023, the Court ordered the Chinese Hotel to pay the Applicant a total of 35,175,000. The judge said that to date such order has not been satisfied by the Respondent despite the fact that the Applicant filed an application for execution.
“No reasons have been adduced as to why such an order has not been satisfied,” he said. The Counsel for the Applicant had submitted that his client has been making follow up of the Chinese Hotel’s properties at Kariakoo Marung’ombe Street Plot 46 Block C.
He submitted that the Applicant discovered that all the properties of the Respondent in that Plot have been shifted to unknown place. Such facts were not disputed by the Respondents.
On his part, Shichang Zhou alleged that he is not the Managing Director of the Chinese Hotel, but the Director of Chinese Hotel Investment Group Ltd.
In his ruling, the judge pointed out that as rightly submitted by the counsel for the Applicant, such an issue was neither raised at the Commission for Mediation and Arbitration (CMA) nor before the Court on an application for revision.
Additionally, he said, in the executed decision, the Court found that the Applicant is the employee of the Chinese Hotel notwithstanding the list of companies associated with such company.
In his counter affidavit, Shichang Zhou admitted that he is among the Directors of the Chinese Hotel Investment Group Limited. However, the judge said, he claimed not to be aware of the Chinese Hotel.
“The matter being already determined by Court, I find the Respondents are implying delaying tactics to pay the Applicant as ordered. For such reason, and in line with the above analysis, I find the Applicant has satisfied the Court with sufficient reason to lift the veil of incorporation as prayed,” he said.
In the matter, the Applicant prayed for some orders, including the Court to lift the veil of incorporation of the judgement debtor, the Chinese Hotel and order for the arrest and detention of Shichang Zhou, the shareholders and Managing Director of the Hotel.
During the hearing, the counsel for the Applicant had submitted that his client was forced to file the application in question as he had no other means of making follow up for the compliance of Court’s order having discovered that all Respondent’s properties were shifted to unknown place from the plot.
In response to the application, the counsel for the Respondents conceded that there was an order of the Court issued on April 28, 2023 requiring his client to pay the Applicant 35m/-.
He also conceded that there is no any appeal filed to the Court of Appeal and that the Respondent has not paid the decretal sum.