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Court of AppealPartially AllowedCivil Appeal No 135 of 2002

African Development Bank v Acholla & another (Representatives of the Estate of the Late Bonaventure Eric Acholla) (Civil Appeal 135 of 2002) [2015] KECA 596 (KLR)

Court of Appeal
3 July 2015
4,849 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~19 min to read original · ~4 min brief

The bottom line

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Kenya's Court of Appeal ruled the African Development Bank cannot be sued in Kenyan courts over employment disputes because its immunity covers all claims except borrowing-related ones.

What this practically means

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Executive summary

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This was an appeal by the African Development Bank against a ruling of Rimita J refusing to strike out an employment dispute claim brought by the late Bonaventure Eric Acholla, who alleged failure to promote, demotion, premature retirement and illegal recoveries of money. The High Court had held that Article 52 of the Schedule to the ADB Act did not cover disputes with domestic staff. The Court of Appeal allowed the appeal. It held that Article 52(1), which confers immunity from every form of legal process except cases arising out of the exercise of borrowing powers, is clear and unambiguous, and that an employment dispute falls squarely within the immunity. The court found no conflict between Articles 51 and 52 of the Schedule, relying on comparative authorities (Mukuro, Bertolucci, Mendaro, Broadbent) establishing that immunity from employee suits protects the independence and multi-national character of international organisations, with internal dispute resolution mechanisms as the employees' remedy. It distinguished Tononoka Steels on two grounds: that case involved a ministerial legal notice rather than an Act of Parliament, and a commercial rather than employment dispute. The court further held that although the Constitution of Kenya, 2010 guarantees fair labour practices and access to justice, those rights are limitable under Article 24, and the ADB Act, being a ratified treaty under Article 2(6), forms part of Kenyan law. The appeal was allowed, the High Court ruling set aside, the striking-out application allowed, and each party ordered to bear their own costs since the appellant did not seek costs.

Questions the Court framed

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The issues the Court set itself to decide, in its own words.

  1. 1.Whether the African Development Bank enjoys immunity from legal process in Kenyan courts in respect of an employment dispute with a former employee under Article 52(1) of the Schedule to the ADB Act
  2. 2.Whether there is a conflict between Articles 51 and 52 of the Schedule to the ADB Act
  3. 3.Whether the decision in Tononoka Steels Ltd v Eastern and Southern Africa Trade and Development Bank applies to the present case
  4. 4.Whether the constitutional rights to fair labour practices and fair hearing under the Constitution of Kenya, 2010 override the statutory immunity

Key legal issues

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01

Scope of Article 52(1) immunity of the ADB

Holding

The Bank enjoys immunity from every form of legal process except cases arising out of the exercise of its borrowing powers; an employment dispute does not fall within the exception, so the suit cannot proceed in a Kenyan court

Reasoning

The court applied the plain, natural and ordinary meaning of Article 52(1), holding the provision clear and unambiguous. The dispute between the deceased and the Bank arose from an employment contract, unrelated to borrowing powers, so immunity applied and the High Court lacked jurisdiction.

p. 5
02

Rationale for immunity of international organisations in employment matters

Holding

Immunity from employee suits is rooted in the need to protect international organisations from unilateral control by host states and to preserve their independence and multi-national character

Reasoning

Drawing on Mukuro, Bertolucci, Mendaro and Broadbent, the court held that subjecting an international organisation to the domestic courts of each host country would fragment its independence, create divided decisions across jurisdictions, and hamper its functions; internal dispute resolution mechanisms are the remedy for employees.

p. 6
03

Distinguishing Tononoka Steels

Holding

Tononoka is distinguishable because that immunity was granted by ministerial legal notice and concerned a commercial transaction, whereas here immunity is enacted in an Act of Parliament and the dispute is employment-related

Reasoning

The court agreed with the appellant and the Attorney-General that Tononoka concerned a private commercial transaction under a gazette notice, whereas the ADB's immunity is statutory. Employment claims are non-commercial and cannot be stretched into commercial transactions.

p. 7
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Interaction with the Constitution of Kenya, 2010

Holding

Articles 41 and 50 rights are justiciable but limitable under Article 24; the ADB Act, as a ratified treaty instrument under Article 2(6), forms part of Kenyan law and its immunity provision is a lawful limitation

Reasoning

The court accepted that the 2010 Constitution enshrines labour rights and access to justice, but held that ratified treaties form part of Kenyan law and that pre-2010 laws must be construed in conformity with the Constitution. The immunity constitutes a reasonable and justifiable limitation under Article 24.

p. 8
05

Alleged conflict between Articles 51 and 52

Holding

No conflict exists between the Bank's capacity to institute legal proceedings under Article 51 and its immunity under Article 52

Reasoning

The court rejected the respondent's argument that Article 51's grant of capacity to institute proceedings contradicts Article 52's immunity, finding the arguments of the appellant and Attorney-General forceful and persuasive on the rationale for the immunity.

p. 7

Legal principles established

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  • The African Development Bank enjoys immunity from every form of legal process in Kenyan courts except in cases arising out of the exercise of its borrowing powers, and this immunity covers employment disputes with its staff
  • There is no conflict between Article 51 (capacity to institute legal proceedings) and Article 52(1) (immunity from legal process) of the Schedule to the ADB Act
  • The relationship of an international organisation with its internal administrative staff is non-commercial, and absent waiver, employment-related claims cannot found an action against the organisation
  • Constitutional labour rights and the right of access to court under the Constitution of Kenya, 2010 can be limited under Article 24, and immunity of international organisations enacted before 2010 is such a permissible limitation

Court orders

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  1. 1.Appeal allowed
  2. 2.Ruling of the learned judge set aside
  3. 3.In its place, an order made allowing the chamber summons application dated 6th June 2001 (i.e. striking out the amended plaint)
  4. 4.Each party shall bear their own costs

The bench

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One judgment of the whole court — no separate or dissenting opinions.

majority
majority
majority
On appeal from
High Court of Kenya
H.C.C.C No 3157 of 1996
Jurisdiction invoked
First appellate jurisdiction over appeals from the High Court (Court of Appeal of Kenya); appeal against a ruling striking out a plaint on grounds of immunity from legal process

Relief refused

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Costs against the respondent

The appellant stated it did not seek costs against the respondent in the event of the appeal succeeding

p. 3

Costs

Each party shall bear their own costs

Quotable passages

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Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.

The upshot of the above is that the appeal is allowed, the ruling of the learned judge set aside, and in its place, an order made allowing the chamber summons application dated 6th June, 2001.
p. 8Final orders - disposition
As the appellant did not wish to have costs, we order that each party shall bear their own costs.
p. 9Costs order
The plain, natural and ordinary interpretation of this provision is that the appellant bank cannot be sued in a domestic court, unless the dispute arises out of an exercise of its borrowing powers, which is not the case here.
p. 5Scope of immunity under Article 52(1)
We have therefore come to the inevitable conclusion that the appellant is vested with diplomatic immunity.
p. 8Conclusion on immunity
It is also important to point out that the immunity is granted to the International Organisation and not to the individual
p. 7Immunity vests in the organisation, not the individual

Issues in the judgment

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minor

The judgment renders the appellant's counsel's name inconsistently ('Ojiambo' and 'Mr Namada' for the respondent is consistent, but appellant's counsel appears as 'Mr. Ojiambo' throughout); no material contradiction, noted for completeness only

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (3)

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Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.

Cite this brief

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Cite this brief

Caselaw, "African Development Bank v Acholla & another (Representatives of the Estate of the Late Bonaventure Eric Acholla) (Civil Appeal 135 of 2002) [2015] KECA 596 (KLR)", Case Analysis (2015). Civil Appeal No 135 of 2002. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2015/596/eng@2015-07-03

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