The High Court has ordered a fresh assessment of legal costs after a tribunal slapped Standard Chartered Bank Kenya with a Sh709 million bill for a case concerning underpaid pension benefits claimed by 629 former employees.

The court said the Retirement Benefits Appeals Tribunal failed to allow the bank to challenge how the costs were calculated before incorporating them into its June 18, 2025 decree.

The ruling does not disturb the pension award to the 629 former employees. It only removes the costs component and sends that issue back to the Tribunal for fresh determination.

The dispute stems from changes to the bank's pension arrangements and has moved through the Retirement Benefits Authority, the Tribunal, the High Court, the Court of Appeal, and the Supreme Court.

The 629 former employees were members of Standard Chartered Kenya Pension Fund, established in 1975 as a defined-benefit scheme, or the staff retirement benefits scheme. They challenged reduced pension benefits after the scheme changed in 1999.

They alleged the bank used incorrect actuarial factors, excluded cost-of-living adjustments and housing allowances, and improperly transferred a pension surplus to the bank.

The Tribunal ruled in their favour on April 28, 2022, ordering recalculation and payment using the applicable 1999 rules, actuarial factors, allowances and future pension increases.

StanChart challenged that decision in the High Court but lost. The Court of Appeal later upheld the decision, while the Supreme Court struck out the bank's appeal in September 2025.

The Tribunal issued a final order on May 22, 2025, followed by the June 18 decree incorporating the Sh709.1 million costs of litigation.

StanChart then filed the constitutional petition, arguing that the rules used in determining costs were invalid because a Legal Notice of 2000 appeared to be signed by former Finance Minister Chris Okemo, although the notice said the Chief Justice made the rules.

In its ruling, the court rejected that challenge, finding that the evidence did not prove the minister independently made or approved the rules. It upheld the validity of the 2000 rules and their costs schedule.

“No party has placed before the court any affidavit, minute, or correspondence from the Office of the Chief Justice disowning authorship of the Rules,” the court said.

However, the court ruled that the mismatch between the notice's preamble and signature created “a real” ambiguity and said it would be prudent for the Chief Justice, in consultation with the Retirement Benefits Authority, to re-promulgate or formally authenticate the rules.

It found that a section of the rules gave the Chief Justice a separate power to prescribe costs for Tribunal appeals.

But it found a procedural defect in how the Sh709.1 million was assessed.

It found that the former employees/pension scheme members computed the figure and included it in a draft decree. The bank could raise interest concerns, but not specifically about the costs computation, methodology or quantum.

The court said the Rules required costs to be quantified and certified through a process, rather than simply adopting a figure prepared by the party receiving the award.

“Nothing on the record before the court suggests that any independent process occurred,” the court said.

It held that the bank's participation in the substantive pension case did not amount to a fair hearing on the later costs determination.

“A costs award of this magnitude is plainly such a stage that the petitioners were entitled to test,” the court said.

The court declared that the process breached the bank's rights to fair administrative action and a fair hearing under the Constitution.

It set aside the decree only insofar as it certified the Sh709.1 million and ordered the Tribunal to reassess the amount under the existing rules after hearing the bank.

→wangui@ke.nationmedia.com

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