High Court Quashes Sh709 Million Pension Costs Award Over Fair Hearing Concerns

The High Court has annulled a Sh709.19 million costs award imposed on Standard Chartered Bank Kenya related to a pension dispute, citing procedural unfairness in how the amount was determined.

The dispute originated from a June 18, 2025 ruling in an appeal involving Abdalla Osman and 628 others against the Retirement Benefits Authority and other parties. The decree included the substantial costs alongside awards for pension underpayments and surplus refunds.

Justice Gregory Mutai ruled that although the Retirement Benefits Appeals Tribunal has the authority under the Retirement Benefits (Tribunal) Rules, 2000 to award costs, the process used to calculate and incorporate the Sh709.19 million violated the petitioners’ constitutional right to a fair hearing and fair administrative action.

Key Findings by the Court

• The petitioners were not given an opportunity to contest the methodology or accuracy of the costs calculation, only the interest rate applied.
• There was no independent process for assessing the costs before they were included in the decree.
• The right to be heard must apply at every significant stage affecting a person’s rights, especially with large sums involved.
• The rules governing costs were not declared invalid as the petitioners failed to prove they were made without proper authority.
• The schedule of costs was found consistent with the Retirement Benefits Act.

As a result, the court set aside the part of the June 18, 2025 decree certifying the Sh709.19 million costs and ordered a reassessment under the existing rules. The petitioners must be given a reasonable chance to challenge the computation and quantum of costs during the fresh assessment.

The substantive awards for pension underpayments and surplus refunds remain unaffected. Justice Mutai directed that each party bears its own legal costs for the petition.