Kenya High Court: Orders Pension Tribunal Costs Reassessment

• The Kenya High Court has ordered a fresh assessment of a Sh709.19 million costs award against Standard Chartered Bank Kenya.
• Justice Gregory Mutai's ruling upheld the validity of the Retirement Benefits (Tribunal) Rules, 2000, dismissing the bank's challenge to their constitutionality.
• The court found that Standard Chartered's constitutional rights were breached during the initial assessment of the party-and-party costs.
• The reassessment must provide Standard Chartered an opportunity to challenge the calculation and the claimed amount.
• The decision does not affect the underlying awards related to pension underpayments and a surplus refund for 629 former employees.

This ruling underscores the judiciary's commitment to ensuring due process and fair hearing, even when dealing with established regulatory instruments like the Retirement Benefits (Tribunal) Rules, 2000.

The Kenya High Court has ordered a significant reassessment of a Sh709.19 million costs award levied against Standard Chartered Bank Kenya, while simultaneously affirming the foundational rules governing such awards by the Retirement Benefits Appeals Tribunal. This pivotal decision, delivered by Justice Gregory Mutai, mandates a fresh review of the substantial party-and-party costs, which stemmed from a protracted pension dispute.

The original case involved 629 former employees of Standard Chartered and other interested parties, centering on allegations of pension underpayments and the distribution of a surplus refund. While the court upheld the validity of the regulatory framework, it found critical procedural flaws in how the specific costs were initially determined, necessitating a new, fair assessment.

Standard Chartered Bank had mounted a robust challenge to the legality of the Retirement Benefits (Tribunal) Rules, 2000, and the associated costs schedule utilized by the Tribunal. The bank contended that Section 52 of the Retirement Benefits Act exclusively empowered the Chief Justice to formulate such rules. Their argument highlighted that Legal Notice No. 121 of 2000, which established these rules, bore the signature of then-Finance Minister Chrisanthus Okemo, implying an overreach of authority and rendering the rules invalid.

However, Justice Mutai dismissed these claims, stating that Standard Chartered failed to provide sufficient evidence to prove that the rules were indeed made by the minister rather than under the Chief Justice's authority. The judge emphasized that a signature on a Legal Notice does not definitively identify the individual responsible for its substantive content or approval. Furthermore, the court noted the rules' extensive operational history, having been in effect for approximately 25 years and forming the basis for over 100 Tribunal decisions, thereby placing a substantial burden of proof on any party seeking their invalidation.

The High Court also rejected the bank's assertion that the Tribunal's costs schedule conflicted with Section 49(4) of the Retirement Benefits Act. Justice Mutai clarified that this provision allows the Tribunal flexibility in awarding costs, either by a prescribed High Court scale or a specific amount, while Section 52 separately grants the Chief Justice power to prescribe the scale for appeals.

Despite affirming the legal framework, the High Court identified a critical breach of Standard Chartered's constitutional rights during the process that led to the initial Sh709.19 million costs award. This procedural misstep prompted Justice Mutai to set aside the costs component of the Tribunal's decree, originally issued on June 18, 2025.

The court's directive now requires the Retirement Benefits Appeals Tribunal to conduct a fresh assessment of the amount. Crucially, this new Kenya pension costs assessment procedure must afford Standard Chartered a proper opportunity to challenge the calculations and the specific amount claimed. This ruling underscores the judiciary's commitment to ensuring due process and fair hearing, even when dealing with established regulatory instruments like the Retirement Benefits (Tribunal) Rules, 2000.

This ruling carries significant implications for the administration of pension disputes in Kenya. It unequivocally confirms the continued validity and enforceability of the Retirement Benefits (Tribunal) Rules, 2000, which have long guided the operations of the Retirement Benefits Appeals Tribunal. Importantly, the High Court clarified that its decision solely pertains to the procedural fairness of the costs assessment and does not impact the Tribunal's underlying awards concerning pension underpayments and the surplus refund to the former employees.

The judgment therefore serves as a dual affirmation: upholding the regulatory framework while simultaneously imposing a stringent requirement for procedural integrity in its application. Legal practitioners involved in pension disputes must now pay close attention to the procedural fairness of any Tribunal costs award, being prepared to challenge the assessment process if constitutional rights, particularly the right to a fair hearing, are perceived to be breached. The mandate for a fresh, transparent review of the Retirement Benefits Appeals Tribunal costs sets a precedent for future cases.

This ruling confirms the validity of the Retirement Benefits (Tribunal) Rules, 2000, but mandates that the Retirement Benefits Appeals Tribunal must ensure due process and fair hearing when assessing costs, providing an opportunity for parties to challenge calculations. Lawyers should scrutinize the procedural fairness of any Tribunal costs award and be prepared to challenge the assessment process if constitutional rights are breached.

Source: Based on reporting from Capital FM.