Arising implications from exercise and practice of discretional jurisdiction

Court of Appeal ruling in "Standard Chartered Financial Services Ltd & 2 Others vs. Manchester Outfitters (Suiting Division) Ltd & Another"



Like the former Constitution of Kenya, the 2010 Constitution provides for the jurisdiction of the superior courts in such elaborate and conclusive terms that quite often I wonder why there are still so much litigation on jurisdiction of the High Court, Court of Appeal and the Supreme Court. As a younger lawyer, I wrote several commentaries on the vexing issue of jurisdiction under the old Constitution, and I find it somewhat ironic that over a decade later, I return to the same subject under the new constitutional order.

From the outset, it is important to remember that in Jasbir Singh Rai & 3 Others vs. Tarlochan Singh Rai & 4 Others Civil Application No. 307 of 2003 (154/2003 UR), the Court of Appeal held that it had no jurisdiction to review its own decisions. In the words of Justice Omolo: “The power to re-open and re-hear an appeal is to be found nowhere in the Appellate Jurisdiction Act. Section 77 (9) of the Constitution, which is cited as the basis of the Motion, does not give the court the power to re-open and re-hear appeal. Neither does Setion 64 of the Constitution. Section 3 of the A appellate Jurisdiction Act says that when hearing and determining an appeal in the exercise of jurisdiction conferred on it by the Act the Court has power, authority and jurisdiction vested in the High Court”, but that power, authority and jurisdiction is to be exercised,“For all purposes of an incidental to the hearing and determination of any appeal… Clearly that section cannot be the basis for concluding that the court has the power to re-open and re-hear an appeal”.

The occasion for this commentary stems from a ruling of the Court of Appeal delivered on April 8, 2016 by a five-judge bench of the Court of Appeal in Standard Chartered Financial Services Ltd & Another vs. Manchester Outfitters (Suiting Division) Limited (also known as King Woolen Mills Limited) & 2 Others, Civil Application No. NAI . 224 of 2006.


In an application that the learned judges referred to as “rare”, the applicants sought to have the judgment of the Court of Appeal delivered on December 4, 2002 re-opened, re-examined, declared a nullity, set aside, and the appeal heard afresh. The applicants were aggrieved by the said judgment which, inter alia, nullified the appointment of the receiver, invalidated the debenture and ordered the Bank to pay the textile company a sum of Sh251 million.

Four years after the Court of Appeal delivered that judgment, the Bank filed a Notice of Motion dated August 18, 2006, contending, as summarised at paragraph 6 of the appellate court ruling in focus,  “the judgment was a nullity as the Court acted outside its jurisdiction; that the majority decision was anchored on a cause of action which arose after the decision in the superior court had been made and the appeal lodged; that the applicants were not given a fair hearing; that the rules of natural justice were not complied with, and; that Hon. Lakha J. A. who presided over the hearing of the appeal was biased in favour of the respondents”.

In its ruling, the Appellate Court decided that they had “residual jurisdiction to reopen and rehear a concluded matter which the interest of justice demands”, but that such jurisdiction will only be exercised “in exceptional situations where the need to obviate injustice outweighs the principle finality in litigation”.

Legal basis

In arriving at this decision, the learned judges gave two reasons: First that their analysis of jurisprudence from several countries on the issue of jurisdiction to review a court of appeal judgement showed that where the Court “is of final resort, and notwithstanding that it has not explicitly been conferred with the jurisdiction to re-open a decided matter, it has residual jurisdiction to do so in cases of fraud, bias or other injustices with a view to correct the same…” Secondly, the learned judges found that “the new constitutional dispensation justified a departure from the Rai case as it called for an interpretation of the Court’s jurisdiction in a manner that brings it into conformity with the principles of the 2010 Constitution, and gives allowance for the development of law. The exercise of the court’s residual jurisdiction under section 3A of the Judicature Act was therefore justified”.

In future, the ratio decidendi of this ruling will turn out to be both controversial and a bottomless well of new jurisprudential possibilities. It is difficult to challenge the notion that an appellate judgment procured by fraud, bias or other injustices should be set aside and the appeal heard afresh. The only troubling thing is that in virtually all jurisdictions analysed by the Court of Appeal this power is not based on statute but the amorphous “residual power”. In other words, this jurisdiction is not accessible as a matter of right; rather, it depends on the discretion of the judges to determine whether the fraud, bias or injustice in a given case is bad or serious enough to deserve a reconsideration of the appeal.

There are five major reasons members of the legal profession should take great interest in the Standard Chartered case. First, the ruling invites every litigant with evidence that a judgment of the court of Appeal was vitiated or influenced by fraud, bias or gross injustice to apply for the same to be set aside and the appeal heard afresh. Let me confess here that I have already filed such an application based on the ratio decidendi in the Standard Chartered case and I hope the court will be consistent.

Secondly, in Samuel Kamau Macharia & Another vs Kenya Commercial Bank & 2 Others(2010) eKLR the Supreme Court held that the decisions of the Court of Appeal made before the promulgation of the 2010 Constitution were final and could not be reviewed. The dispute in the Standard Charted case falls under this category and so it will be interesting to see whether the Supreme Court will be consistent in the event that this ruling is brought to its attention.

Thirdly, the Standard Chartered case has profound implications on Article 27(1) of the Constitution, which enshrines the right of every person to equality before the law, and the corresponding rights to equal protection and equal benefit of the law. Most probably, the Court of Appeal may have intended the ruling in the Standard Chartered case to be a one-off proclamation to take care of special circumstances, but this is precisely why it is troubling because Kenya’s jurisprudential history invariably shows that litigants like Kamlesh Pattni are more likely to benefit from such-one offs, protective interpretation and allowance for legal development, than Wafula Buke, you and I . The point here is that due process of law and golden rights of equality before the law and equal protection of law will amount to nought unless the jurisdiction of courts are enforced equally, consistently and not dependent on discretion of judicial officers.

Supreme inconsistency

Fourthly, the Supreme Court has not been consistent enough in interpreting its own jurisdiction and this should be a matter of great concern in electoral disputes. Beginning with its decision in Gatirau Peter Munya vs. Dickson Mwenda Githinji and 2 Others [2014] eKLR (the Munya Case), the Supreme Court has introduced discretion in determining the category of electoral appeals it can hear and determine despite the fact that the Constitution confers it with electoral jurisdiction to hear and determine presidential election disputes only.

Finally, as the new Chief Justice settles down as the chief judge of the Republic of Kenya, his most important immediate contribution will be to resolve the questions of jurisdiction of the superior courts. To my mind, the law seems to have resolved the issue quite perfectly, but the Supreme Court judges may have to determine why so many judges, including themselves, are inclined to resort to discretion in determining their jurisdiction. Could it be because, just like in politics, the true essence of power manifests in its unfettered or abuse of power, to put it bluntly?



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