Stanbic Bank Kenya Ltd v Santowels Ltd
The bottom line
#Supreme Court dismisses banks' bid to review ruling on interest rate approval by Cabinet Secretary.
What this practically means
#The Kenya Bankers Association asked the Supreme Court to review its earlier decision that banks must get Cabinet Secretary approval before raising interest rates. The Court said no, because the application was filed too late and did not meet the strict rules for review. Delegating power to the Central Bank Governor does not remove the Cabinet Secretary's ultimate responsibility.
Executive summary
#Questions the Court framed
#The issues the Court set itself to decide, in its own words.
- 1.Whether the Notice of Motion dated 4th September 2024 meets the grounds for review under Section 21A of the Supreme Court Act and the principles in Outa vs. Okello & 3 others.
- 2.Whether the application should instead be considered under the Slip Rule (Section 21(4) of the Supreme Court Act) for correction of an oversight or clerical error.
- 3.Whether the delegation of powers under Section 44 of the Banking Act to the Governor of Central Bank of Kenya via Legal Notice No. 35 of 2006 justifies a review of the judgment.
Key legal issues
#Whether the application for review of the Supreme Court's judgment of 28th June 2024 meets the established grounds for review.
The application does not meet the grounds for review under Section 21A of the Supreme Court Act or the Outa principles, as it does not allege fraud, deceit, nullity, or concealment of law.
The applicant sought review on the basis that the Court overlooked the delegation of powers under Section 44 of the Banking Act to the Governor of CBK via Legal Notice No. 35 of 2006. However, the Court found that this does not constitute any of the exceptional grounds for review. The Court noted that the application was essentially an attempt to re-litigate the merits of the case, not to correct an error apparent on the face of the record. The Court emphasized that the Cabinet Secretary retains residual authority despite delegation.
Whether the application can be treated as one under the Slip Rule for correction of an oversight or clerical error.
The application fails under the Slip Rule because it was brought outside the 14-day period required by Section 21(4) of the Supreme Court Act, and the error alleged is not a clerical or oversight error but a substantive disagreement with the judgment.
The Court observed that the applicant invoked Section 21A in error, as the correct provision for correcting oversights is Section 21(4), which requires application within 14 days. The applicant filed the motion on 6th September 2024, well beyond the 14-day window from the judgment of 28th June 2024. Additionally, the alleged error—that the Court should have recognized the delegation to the CBK Governor—is not a clerical slip but a substantive legal argument already considered and rejected.
Whether the delegation of powers under Section 44 of the Banking Act to the Governor of CBK via Legal Notice No. 35 of 2006 affects the Court's original finding that approval must be sought from the Cabinet Secretary.
The delegation does not alter the Court's original finding because the Cabinet Secretary retains residual authority and accountability under Section 38(4) of the Interpretation and General Provisions Act.
The Court held that the express statutory provision in Section 44 of the Banking Act assigns responsibility to the Cabinet Secretary. While the Cabinet Secretary may delegate the exercise of that power to the Governor of CBK, the delegation does not divest the Cabinet Secretary of authority or responsibility. The Cabinet Secretary can vary or cancel the delegation at any time. Therefore, the Court's original declaration that banks must seek the Cabinet Secretary's approval remains correct and is not undermined by the delegation.
Legal principles established
#- The Supreme Court cannot review its own decisions except for fraud, deceit, nullity, or concealment of law.
- The Slip Rule allows correction of clerical errors within 14 days, not substantive re-argument of a case.
- Delegation of a statutory power does not strip the delegating authority of residual responsibility.
- An application for review cannot be used to re-litigate issues already decided by the Court.
- The Cabinet Secretary retains authority under Section 44 of the Banking Act even after delegating to the CBK Governor.
Court orders
#- 1.The Notice of Motion dated 4th September 2024 and filed on 6th September 2024 be and is hereby dismissed.
- 2.Each party shall bear its own costs.
The bench
#One judgment of the whole court — no separate or dissenting opinions.
- On appeal from
- Supreme Court of Kenya
- SC Petition No. E005 of 2023
- Jurisdiction invoked
- Sections 3A and 21A of the Supreme Court Act, Cap 9B; Rule 28(5) of the Supreme Court Rules 2020
Relief refused
#Review and amendment of the judgment of 28th June 2024 to require approval from the Governor of CBK instead of the Cabinet Secretary under Section 44 of the Banking Act.
The application did not meet the grounds for review under Section 21A or the Outa principles; it was not based on fraud, deceit, nullity, or concealment of law.
Alternative prayer for clarification of the judgment.
The application was brought under the wrong provision and out of time; the Slip Rule under Section 21(4) requires application within 14 days, which was not met.
Costs
Each party shall bear its own costs.
Quotable passages
#Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.
it is now firmly established that, as a general rule, the Supreme Court cannot sit on appeal over its own decisions, or review its decisions, save to correct obvious errors apparent on the face of the decision.
The invitation to review the Judgment on the basis of Legal Notice No. 35 in which the Cabinet Secretary has delegated his powers under Section 44 of the Act to the Governor of CBK cannot prevail against an express statutory provision which assigns the responsibility or authority of restricting the increase in banking rates to the Cabinet Secretary.
Consequently, and for the reasons afore-stated we make the following Orders: i. The Notice of Motion dated 4th September 2024 and filed on 6th September 2024 be and is hereby dismissed. ii. Each party shall bear its own costs.
Key timeline
#Practical implications
#Review grounds strictly limited
When advising clients on Supreme Court review, emphasize that only fraud, deceit, nullity, or concealment of law qualify. The Slip Rule is for clerical errors only and has a strict 14-day window. Do not attempt to re-litigate merits; the Court will dismiss such applications with costs.
Interest rate changes need approval
Banks and financial institutions must seek Cabinet Secretary approval before increasing interest rates. Delegation to the CBK Governor does not change this requirement. Ensure compliance with Section 44 of the Banking Act to avoid litigation. The Supreme Court has firmly closed the door on challenging this rule.
Protection from arbitrary rate hikes
This ruling confirms that banks cannot unilaterally raise loan interest rates without government approval. If your bank increases rates without clear Cabinet Secretary authorization, you may have grounds to challenge the increase. The Cabinet Secretary remains accountable even if powers are delegated to the Central Bank.
Frequently asked questions
#Can Kenyan banks increase interest rates without Cabinet Secretary approval?+
No. The Supreme Court has ruled that under Section 44 of the Banking Act, banks must obtain approval from the Cabinet Secretary before raising interest rates. Delegation to the Central Bank Governor does not remove this requirement.
What is the Slip Rule in Kenya Supreme Court?+
The Slip Rule allows the Supreme Court to correct clerical errors or oversights in its judgments within 14 days. It cannot be used to change the substance of a decision or re-argue the case. Applications outside 14 days are automatically dismissed.
Can the Supreme Court review its own decisions in Kenya?+
Only in very limited circumstances: fraud, deceit, nullity, or concealment of law. The Court cannot sit on appeal over its own decisions. A review application that simply disagrees with the judgment will be dismissed.
What does the Banking Act say about interest rate regulation in Kenya?+
Section 44 of the Banking Act gives the Cabinet Secretary authority to regulate interest rate increases by banks. The Cabinet Secretary may delegate this power to the Central Bank Governor, but remains ultimately responsible. Banks must seek approval before raising rates.
Cite this brief
#Cite this brief
Caselaw, "Stanbic Bank Kenya Ltd v Santowels Ltd", Case Analysis (2025). Petition (Application) E005 of 2023. Source: https://new.kenyalaw.orghttps://new.kenyalaw.org/akn/ke/judgment/kesc/2025/3/eng@2025-03-14
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.