Stanbic Bank Kenya Ltd v Santowels Ltd (Civil Application Sup E196 of 2022) [2023] KECA 188 (KLR)
The bottom line
#Kenya's Court of Appeal cleared the way for the Supreme Court to finally settle how banks may vary interest rates on customers' loans.
What this practically means
#Executive summary
#Questions the Court framed
#The issues the Court set itself to decide, in its own words.
- 1.Whether the grounds raised in the intended appeal constitute matters of general public importance warranting certification under Article 163(4)(b) of the Constitution
- 2.Whether section 44 of the Banking Act restricting increases in banking or other charges applies to interest rates
- 3.Whether section 52 of the Banking Act allows contractual freedom to vary interest without ministerial authority
- 4.Whether there is uncertainty in the law arising from contradictory decisions on ministerial consent for interest variation
Key legal issues
#Whether the interpretation of sections 44 and 52 of the Banking Act regarding ministerial approval for interest variation is a matter of general public importance
Yes. The Court found that conflicting decisions in the High Court and Court of Appeal on when ministerial consent is required for interest variation create uncertainty that transcends the parties' dispute and affects banks and bank customers generally.
The Court applied the principles in Hermanus Phillipus Steyn v Giovanni Gnecchi-Ruscone and Kenya Plantation and Agricultural Workers Union v KEFHAU. Although the dispute arose from a private banking contract, the proper interpretation of sections 44 and 52 of the Banking Act has significant bearing on the public interest, affects a general class of litigants, and has repeatedly engaged the courts. Certainty on this question benefits both banks and customers.
Whether the applicant's grounds raised substantial points of law suitable for Supreme Court review
Yes. The intended appeal revolves around the proper interpretation and application of sections 44 and 52 of the Banking Act, and the existence of contrary judicial views constitutes the state of uncertainty that justifies certification.
The Court noted it is well-trodden path that certification requires demonstration of a substantial point of law with significant public bearing. Here, contradicting decisions on the rate of banking, interest variation and ministerial consent were identified in six named cases, satisfying the requirement that uncertainty in the law may ground certification.
Legal principles established
#- A matter of general public importance warranting certification is one whose impacts and consequences are substantial, broad-based, transcending the litigation-interests of the parties and bearing upon the public interest.
- Where certification is occasioned by uncertainty in the law arising from contradictory precedents, the question of law need not have been finally resolved below; the existence of the contradiction itself may justify certification.
- A dispute founded on a private contract may still transcend the interests of the parties and qualify as a matter of general public importance where its determination affects banks and bank customers generally.
Court orders
#- 1.Certification granted that the intended appeal involves matters of general public importance under Article 163(4)(b)
- 2.Leave granted to the applicant to file the intended appeal in the Supreme Court within the next 14 days
- 3.No orders as to costs
The bench
#One judgment of the whole court — no separate or dissenting opinions.
Wrote the judgment
Wrote the judgment
Wrote the judgment
- On appeal from
- Court of Appeal (decision sought to be appealed from; certification sought in that same court)
- Civil Appeal No 160 of 2018
- Jurisdiction invoked
- Article 163(4)(b) of the Constitution of Kenya; sections 3A and 3B of the Appellate Jurisdiction Act; Rule 33(1) of the Supreme Court Rules
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 therefore our holding that the application has met the test set in the now-famous Hermanus Steyn case. We, therefore, grant leave to the applicant to file the intended appeal in the Supreme Court within the next 14 days. There shall be no orders as to costs.
In our view, the interpretation of sections 44 and 52 of the Banking Act transcends the interest of the parties that are before us. A determination of this issue will bring certainty to this question once and for all.
Banks are entitled to know whether the ghosts of the past on interest rates that were applied years back can reincarnate. Bank customers are also entitled to an answer as to whether the signing of security documents amounts to granting banks a blank cheque on the question of interest.
a matter of general public importance# warranting the exercise of the appellate jurisdiction would be a matter of law or fact, provided only that: its impacts and consequences are substantial, broad-based, transcending the litigation-interests of the parties, and bearing upon the public interest
Issues in the judgment
#The judgment labels Stanbic Bank Kenya Ltd as 'the applicant' and also describes it as having been 'the respondent in Civil Appeal No 160 of 2018, in which Santowels Ltd (herein the respondent) was the appellant', using 'the respondent' for both parties in the same sentence.
The judgment refers to the respondent addressing 'section 55' although no section 55 had earlier been identified in the pleadings or submissions, and the intended appeal concerns sections 44 and 52 of the Banking Act.
Key timeline
#Practical implications
#Frequently asked questions
#Later judgments citing this (1)
#Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.
- Frann Investments Limited v Kenya Anti Corruption Commission & 6 others (Civil Application E077 of 2024) [2025] KECA 1707 (KLR)[2025] KECA 1707 (KLR)24 Oct 2025
Cite this brief
#Cite this brief
Caselaw, "Stanbic Bank Kenya Ltd v Santowels Ltd (Civil Application Sup E196 of 2022) [2023] KECA 188 (KLR)", Case Analysis (2023). Civil Application No. Nai. E112 of 2022 (notice of motion dated June 9, 2022). Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2023/188/eng@2023-02-17
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.