No automatic right of appeal without express reservation in arbitration agreement: The case of SMB Bank (Kenya) Limited v Afrasia Bank Limited [2025]

 In a recent landmark decision, the Court of Appeal in SMB Bank (Kenya) Limited v Afrasia Bank Limited [2025] KECA 386 (KLR) ruled that there is no automatic right of appeal to the Court of Appeal from a High Court decision under Section 39 of the Arbitration Act, unless expressly reserved in the arbitration agreement.

This ruling emphasises the need for clear and specific provisions in arbitration agreements regarding the right to appeal. Without such provisions, any appeal to the Court of Appeal requires leave to be granted.

This decision reinforces the principle that the arbitration process must maintain finality unless there are exceptional circumstances for appeal.

Dual Employment: The Case of Nduuru v Cooperative Bank Limited [2025] KEELRC 572 (KLR)

Brief Facts:

On dual employment, from the case cited above, the Claimant was terminated for engaging in gainful employment while still working for the Respondent. 

The court acknowledged the general principle that an employee is not prohibited from taking on additional employment unless explicitly restricted by law, company policy, an employment contract, or a Code of Conduct and Regulations. Employees may engage in other paying jobs outside their primary employer’s working hours, such as during annual leave, off days, public holidays, or weekends, particularly in the modern digital age.

Case Analysis:
However, in this case, the Claimant consistently clocked in at the Respondent’s premises from 8:00 am to 5:00 pm on workdays. 

The Claimant did not clarify when he performed his other two jobs. The court found that working full-time for the Respondent while also receiving salaries from other employers strongly suggested that the Respondent’s time and resources may have been used for the benefit of other employers. 

It also indicated a lack of full commitment to the Respondent, as it would not be humanly possible to dedicate 100% effort to multiple employers simultaneously.

Court's Findings: 

While the court recognized the possibility of managing multiple jobs in the digital era, it gave weight to the employer’s concerns, especially given the Claimant’s failure to specify when he performed his additional work. 

The Claimant admitted to providing supervision, consultation, and research services for MKU and Methodist Universities while employed by the Respondent. 

Based on this admission, the court ruled that the Respondent had valid grounds for termination. 

 

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Titles Acquired Irregularly : The Supreme Court case of Dina Management Limited v County Government of Mombasa & 5 others (Petition 8 (E010) of 2021) [2023] KESC 30 (KLR) (Constitutional and Human Rights) (21 April 2023) (Judgment).

Brief Facts/Background

In April 2023, the Supreme Court of Kenya delivered a landmark judgment in the case of Dina Management Limited v County Government of Mombasa & 5 others (Petition 8 (E010) of 2021) [2023] KESC 30 (KLR) (Constitutional and Human Rights) (21 April 2023) (Judgment). This case has significant implications for property transactions and the protection of bona fide purchasers in Kenya. 

The case arose when Dina Management Limited purchased a parcel of land in Mombasa. The company claimed to be a bona fide purchaser without notice of any irregularities.

However, the title to the land was contested by the County Government of Mombasa and other respondents, who alleged that the title had been obtained fraudulently. The core of the dispute centered on whether the protection typically afforded to bona fide purchasers should apply in cases where the title was obtained through irregular or illegal means.

Issues for Determination

1. Whether the Protection for Bona Fide Purchasers Applies to Irregular or Illegal Titles:

The court needed to determine if a purchaser who acquires property without notice of any irregularities should be protected under the bona fide purchaser doctrine, even if the title was obtained through fraudulent or illegal means.

2. The Level of Due Diligence Required:

The court also had to consider the extent of due diligence required to support a claim of being a bona fide purchaser, and what steps buyers must take to verify the legitimacy of a property's title.

Court’s Determination:

The Supreme Court in the case ruled that the protection offered to a bona fide purchaser for value without notice does not apply if the title to the property was obtained irregularly or illegally. The court emphasized that buyers have a duty to conduct thorough due diligence when purchasing property. 

Conclusion:

This judgement shifts the onus of proving the validity of the land title to the buyer, underscoring the importance of ensuring that the title is free from any encumbrances or irregularities. The court's decision is based on the principle that illegally or irregularly obtained titles cannot be defended under the bona fide purchaser doctrine.

The court highlighted that buyers must take active steps to investigate the history and legitimacy of the title before completing the purchase. This includes checking for any existing disputes, encumbrances, or legal challenges related to the property.

The ruling emphasizes the importance of due diligence, accountability, and the protection of property rights.

Buyers must now take proactive steps to verify the legitimacy of property titles before completing transactions, ensuring that they are not unknowingly acquiring irregular or illegal titles. This landmark judgment has important implications for property investors, legal practitioners, and stakeholders in Kenya's property market.

 

Full Case available here