NAIROBI, Kenya, Sept 9 – Standard Chartered Kenya Limited has begun the process of paying about Sh7 billion to former employees after losing a pension miscalculation case at the Supreme Court of Kenya.
The bank said it has already initiated structured engagements with over 600 ex-employees to execute the judgment.
“We have initiated a structured process to execute the judgment in accordance with the legal requirements and are committed to maintaining open communication with affected pensioners,” the lender said yesterday.
“We would like to reassure our clients and stakeholders that we are adequately capitalised to meet the anticipated obligations.”
Last week, the Supreme Court dismissed an application by StanChart seeking to halt a Court of Appeal ruling that directed the bank to pay billions in pension dues owed to its former employees.
Supreme Court Vice President and Deputy Chief Justice Philomena Mwilu ruled that the apex court could not invoke Article 163(4)(a) of the Constitution on the basis of mere allegations of constitutional violations. The provision grants the court powers to hear appeals from the Court of Appeal only in cases involving constitutional interpretation or application.
The case began when the Retirement Benefits Authority (RBA) dismissed claims by retirees, prompting them to escalate the matter to the Retirement Benefits Tribunal. The Tribunal ruled in their favour, directing that their pension benefits be correctly computed and paid.
StanChart challenged the ruling in the High Court, which dismissed its petition. The lender then appealed, arguing that the Tribunal had acted without jurisdiction by failing to take oral evidence and by exceeding its authority when ordering computation of pension benefits.
The Court of Appeal, however, upheld the Tribunal’s decision, noting that it was within its mandate to rely on written submissions and exercise procedural flexibility. The appellate court also found that the High Court’s ruling was sound since the appeal was limited to procedural issues rather than a merit review of the Tribunal’s determination.
Additionally, the Court of Appeal rejected claims that the Tribunal’s directives violated fair administrative action, stressing that StanChart had consented to its procedural approach and actively participated in the proceedings.
A key highlight of the ruling was its emphasis on trustee duties in pension fund management. The court stressed that trustees must administer pension funds strictly in line with the law and the trust deed governing benefits.
As a result, the Tribunal’s directive compelling the bank to compute and disburse the pension dues of the retrenched workers was upheld — a position now reinforced by the Supreme Court’s dismissal of StanChart’s appeal.
