SMB Bank (Kenya) Limited v Afrasia Bank Limited (Civil Appeal E620 of 2022) [2025] KECA 386 (KLR)

Nyutu and Synergy establish a limited and circumscribed jurisdiction to hear appeals from section 35 decisions, triggered only by properly granted leave and only where the High Court stepped outside section 35's grounds, making a decision so grave and manifestly wrong that it completely closed the door of justice. Geo Chem Middle East confirms that a general grant of leave will not suffice; the Court of Appeal must interrogate the substance of the intended appeal. Kampala International University confirms leave must be sought from the Court of Appeal before filing. The peremptory oral leave granted by the trial court fell hopelessly short of this test and was a nullity.

Section 39(3) permits a second appeal to the Court of Appeal where parties agreed to it prior to delivery of the arbitral award, or where this Court grants leave on a point of law of general importance. The agreement contemplated in section 39(3)(a) is an agreement for appeal to the Court of Appeal specifically, not merely an agreement for a first appeal to the High Court. The design of section 39 accords with the principle of finality in arbitration: any right of second appeal, which postpones the definitive conclusion of the dispute, must be expressly agreed or leave granted under section 39(3)(b). No such agreement or leave existed here.

SBM Bank argued, relying on Feisal Mohamed Ali, that omnibus applications combining section 35 and section 39 jurisdictions are incurably defective. The Court held that irrespective of that argument, the impugned judgment determined the application on arguments founded on either both or at least one of the invoked jurisdictions, and addressed the jurisdictional question within the ambit of the Arbitration Act, given that the parties treated the consent of 6th July 2020 as an arbitration agreement within sections 3(1) and 4 of the Act.