BY SAM ALFAN.
Former Kenya Commercial Bank (KCB) company secretary Joseph Kania has opposed an application seeking to refer a dispute between him and the lender for arbitration.
Kania, who has sued the bank for illegal sacking has also objected to the bank’s move to application to suspend all proceedings on the matter, pending the outcome of the arbitration process.
Through senior counsel Wilfred Nderitu argues that even if it were to be assumed that KCB could stay the proceedings in the petition, Section 6(1) of the Arbitration Act would have required the lender or Central Bank to have applied for a stay of proceedings “no later than the time” when it entered appearance.
Nderitu said the court record indicates that KCB filed its responses to the case on 16th January 2023, which is two months and eight days before filing the application to suspend the proceedings.
“In the circumstances set out in the preceding paragraph, it is beyond doubt that the Application for stay of proceedings is an abuse of the court process and an afterthought merely intended to delay or defeat the hearing and determination of this Petition, and any judgment that may arise therefrom,” Kania told the court.
The career banker added that the case is form of a Constitutional petition seeking the determination of the denial, violation and infringement of various fundamental rights.
The rights allegedly violated include the right to fair labour practices, fair administrative action and the right to a fair dispute resolution process.
“Questions respecting the interpretation of the Constitution are not arbitrable as they are the preserve of the superior courts,” his lawyer said.
He said an arbitrator does not have the jurisdiction to determine such cases, which have been preserved for the High Court by virtue of Article 165(3)(b) of the Constitution or, where the questions for constitutional interpretation relate to employment and labour relations.
The lawyer further argued that referring the dispute to arbitration when he has raised constitutional questions would be tantamount to abrogation or purpose and principles of the Constitution, which are required to be protected and promoted by virtue of Article 159(2)(e) of the Constitution.
Nderitu said the dispute between Kania and KCB Bank is not the subject of an “arbitration agreement”, as such an agreement would be inferred only if it was expressly or impliedly spelt out in the Clause in question.
“Based on a true and proper construction of Clause 22 of the Employment Contract dated 1st January 2016 which merely recognized that “either party may refer the matter to final and binding resolution to a single arbitrator…”, the alleged arbitration agreement is null and void, inoperative and/or incapable of being performed. Section 6(1) of the Arbitration Act would therefore not apply whatsoever,” he added.
He added that the dispute contained in the petition also includes the Central Bank of Kenya in respect of which he did not have any arbitration agreement and even if there had been a valid arbitration agreement between him and the Bank, the same would therefore still be incapable of binding the Bank, and any issues raised by the Petitioner against KCB would still require to be resolved before court.
“It is however reiterated, for the avoidance of doubt, that on a true and proper construction of Clause 22 of the Employment Contract dated 1st January 2016 the dispute between the Petitioner and the 1st Respondent itself did not amount to an “arbitration agreement,’ states lawyer Kania.
According to him, the suit raises serious public interest matters against both KCB Bank, a public corporation and a Government agency respectively.
He says questions must not be ‘swept under the carpet’ through a private dispute resolution mechanism away from the scrutiny of the general public.
Nderitu said hearing the dispute in private would be tantamount to obscuring the national values and principles of governance set out in Article 10 of the Constitution and which impact the regulation of other players in the banking industry.
