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ELRCDismissedE434 of 2020 (consolidated with E437 of 2020 and E438 of 2020)· [2024] KEELRC 1526 (KLR)

Bett & others v Kenya Post Office Savings Bank (Cause E433, E434, E437 & E438 of 2020 (Consolidated)) [2024] KEELRC 1526 (KLR)

Employment and Labour Relations Court
14 June 2024
JRJames Rika
608 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
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The bottom line

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Kenya's Employment Court ruled it cannot hear workplace disputes that employment contracts require to be resolved through private arbitration, even if arbitration costs are too high.

What this practically means

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Executive summary

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Three consolidated Employment and Labour Relations Causes (E434, E437 and E438 of 2020) were stayed on 26th November 2021 to allow resolution through arbitration under clause 19.2 of the parties' employment contracts. On 17th April 2023 the Claimants asked the Court to resume hearing, complaining that the arbitrator was too expensive; the Respondent showed that arbitration had proceeded to termination on 8th February 2023 after the Claimants failed to participate and to file their Statements of Claim. The Court declined jurisdiction and struck out the consolidated Claims with no order on costs. The Claimants then applied by notice dated 24th April 2023, supported by their Counsel Ms. Judith Guserwa, seeking review of the striking-out orders and reinstatement, citing their financial inability to meet arbitration costs. The Respondent, through Managing Director Raphael Lekolool, opposed, showing the tribunal was properly constituted and terminated the proceedings for default. The Court found that clause 19.2 mandated arbitration of disputes under the contracts, that the Claimants failed to submit to the process citing high costs, and that it had no jurisdiction to hear the dispute or reinstate the Claims. It held that inability to pay arbitration costs does not affect jurisdiction, and that parties choosing a private dispute settlement mechanism deprive the Court of jurisdiction, arbitration being neither supervised by nor annexed to the Court. The application was declined with no order on costs and the file closed.

Key legal issues

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01

Whether the Court may assume jurisdiction because arbitration proved too expensive

Holding

No. The dispute is governed by clause 19.2 of the employment contracts; the Claimants failed to participate in arbitration and cost considerations do not restore the Court's jurisdiction

Reasoning

Clause 19.2 stipulated that disputes touching on the contracts be determined through arbitration, with the appointment mode provided in the clause. The Claimants declined to participate citing costs, and the tribunal terminated the proceedings after they failed to file Statements of Claim. The Court held it could not assume jurisdiction on the ground that the arbitrator was too expensive, as the Claimants chose a private dispute settlement mechanism.

p. 2
02

Whether the Court can review its orders striking out the Claims

Holding

No; the Court has no jurisdiction to reinstate and try the consolidated Claims and having become functus officio cannot entertain the application

Reasoning

The earlier stay was replaced with an order striking out the consolidated Claims, effectively closing the file. The subsequent application dated 24th April 2023 sought review and reinstatement, but the Court found it lacked jurisdiction both to hear the underlying dispute and to entertain the application, declining it with no order on costs and closing the file.

p. 2

Legal principles established

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  • A party's inability to meet the costs of arbitration does not confer jurisdiction on the Court where the dispute is arbitral by agreement
  • By contracting for arbitration, parties deprive the Court of jurisdiction; arbitration is not supervised by or annexed to the Court

Court orders

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  1. 1.A declaration that the Court does not have jurisdiction to hear the claims and the application filed by the Claimants
  2. 2.The application is declined with no order on the costs
  3. 3.The file is closed
Jurisdiction invoked
Arbitration clause 19.2 of the contracts of employment ousting the Court's jurisdiction

Key timeline

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Practical implications

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Frequently asked questions

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Cite this brief

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Cite this brief

Caselaw, "Bett & others v Kenya Post Office Savings Bank (Cause E433, E434, E437 & E438 of 2020 (Consolidated)) [2024] KEELRC 1526 (KLR)", Case Analysis (2024). E434 of 2020 (consolidated with E437 of 2020 and E438 of 2020). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2024/1526/eng@2024-06-14

Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.