Supreme Court dismisses Tarun Tejpal’s plea

In a recent ruling by the High Court in Kenya, the validity of the Retirement Benefits Appeals Tribunal's cost-awarding rules has been upheld. However, the court has mandated a reassessment of the substantial Sh709.19 million costs award against Standard Chartered Bank Kenya. Justice Gregory Mutai dismissed the bank's challenge to the Retirement Benefits (Tribunal) Rules, 2000 and the costs schedule employed by the tribunal, arguing that Standard Chartered failed to substantiate the rules' unconstitutionality or unlawful origin.

The dispute originated from a prolonged pension case involving 629 former Standard Chartered employees and other stakeholders in connection with pension underpayments and a surplus refund. The tribunal had originally awarded the significant Sh709.19 million in party-and-party costs. Standard Chartered contested the rules' validity, citing Section 52 of the Retirement Benefits Act that purportedly granted the Chief Justice exclusive rule-making authority, whereas Legal Notice No. 121 of 2000 was signed by then Finance Minister Chrisanthus Okemo.

The bank posited that the minister lacked the power to exercise the Chief Justice's authority, rendering the rules and costs schedule invalid. The high court rejected this argument, asserting that the bank had not presented evidence that the rules were indeed promulgated by the minister instead of, or under the authority of, the Chief Justice.

The judge also pointed out that the rules had been in effect for approximately 25 years and had been utilized in more than 100 tribunal decisions, placing a considerable evidentiary burden on any party seeking their invalidation. Additionally, the court rejected Standard Chartered's contention that the tribunal's costs schedule conflicted with Section 49(4) of the Retirement Benefits Act, ruling that the provision permits the tribunal to award costs either according to a pre-determined High Court scale or as a specific amount, with Section 52 independently empowering the Chief Justice to prescribe the scale of costs for appeals.

Nonetheless, the court found that Standard Chartered's constitutional rights had been infringed during the process leading to the Sh709.19 million costs award and consequently set aside the costs portion of the tribunal's June 18, 2025 decree, ordering the tribunal to reassess the amount. The reassessment must provide Standard Chartered with an opportunity to contest the calculation and the claimed amount.

Crucially, the High Court's decision does not affect the tribunal's original awards pertaining to pension underpayments and the surplus refund, thereby maintaining the retirement benefits rules' validity while compelling the tribunal to reevaluate the disputed Sh709.19 million costs award through a fair process.