SMB Bank (Kenya) Limited v Afrasia Bank Limited (Civil Appeal E620 of 2022) [2025] KECA 386 (KLR)
The bottom line
#Kenya's Court of Appeal struck out SBM Bank's appeal because it never obtained the special leave required to challenge an arbitration ruling.
What this practically means
#Executive summary
#Questions the Court framed
#The issues the Court set itself to decide, in its own words.
- 1.Whether this Court has jurisdiction under section 35 of the Arbitration Act to entertain an appeal from the High Court's decision setting aside an arbitral award, given that no leave was properly sought and granted
- 2.Whether the parties' agreement to appeal to the High Court on questions of law and/or fact conferred a right of further appeal to the Court of Appeal under section 39(3)(a) of the Arbitration Act, or whether leave under section 39(3)(b) was required
- 3.Whether the High Court had jurisdiction to entertain an omnibus application combining section 35 and section 39 jurisdictions
Key legal issues
#Leave for a section 35 appeal
The leave granted orally and peremptorily by the High Court was a nullity; leave under the Nyutu/Synergy jurisprudence must be sought from and granted by the Court of Appeal after interrogating the substance of the intended appeal
Nyutu and Synergy establish a limited and circumscribed jurisdiction to hear appeals from section 35 decisions, triggered only by properly granted leave and only where the High Court stepped outside section 35's grounds, making a decision so grave and manifestly wrong that it completely closed the door of justice. Geo Chem Middle East confirms that a general grant of leave will not suffice; the Court of Appeal must interrogate the substance of the intended appeal. Kampala International University confirms leave must be sought from the Court of Appeal before filing. The peremptory oral leave granted by the trial court fell hopelessly short of this test and was a nullity.
Second appeal under section 39(3)(a)
The parties' consent agreement reserving a right of appeal to the High Court on questions of law and/or fact did not constitute an agreement that an appeal shall lie to the Court of Appeal prior to delivery of the award
Section 39(3) permits a second appeal to the Court of Appeal where parties agreed to it prior to delivery of the arbitral award, or where this Court grants leave on a point of law of general importance. The agreement contemplated in section 39(3)(a) is an agreement for appeal to the Court of Appeal specifically, not merely an agreement for a first appeal to the High Court. The design of section 39 accords with the principle of finality in arbitration: any right of second appeal, which postpones the definitive conclusion of the dispute, must be expressly agreed or leave granted under section 39(3)(b). No such agreement or leave existed here.
Omnibus application combining sections 35 and 39
The Court declined to strike out on that basis, finding the impugned judgment was determined on arguments founded on both or at least one of the jurisdictions invoked
SBM Bank argued, relying on Feisal Mohamed Ali, that omnibus applications combining section 35 and section 39 jurisdictions are incurably defective. The Court held that irrespective of that argument, the impugned judgment determined the application on arguments founded on either both or at least one of the invoked jurisdictions, and addressed the jurisdictional question within the ambit of the Arbitration Act, given that the parties treated the consent of 6th July 2020 as an arbitration agreement within sections 3(1) and 4 of the Act.
Legal principles established
#- An appeal to the Court of Appeal from a High Court decision under section 35 of the Arbitration Act lies only with leave of the Court of Appeal, granted after interrogating the substance of the intended appeal, and only in exceptional circumstances where the decision is so grave, so manifestly wrong and has completely closed the door of justice
- Leave to appeal under section 35 must be sought from and granted by the Court of Appeal, not the High Court; leave casually, automatically or peremptorily granted by the High Court is a nullity
- An agreement by parties that an appeal shall lie to the High Court under section 39(1) is not an automatic right to a second appeal to the Court of Appeal; the right to a second appeal must be expressly reserved or leave granted under section 39(3)(b)
Court orders
#- 1.The appeal is struck out
- 2.Costs of the appeal are awarded to the respondent
The bench
#One judgment of the whole court — no separate or dissenting opinions.
- On appeal from
- High Court
- High Court Miscellaneous Application No. E386 of 2021
- Jurisdiction invoked
- Sections 35 and 39(3) of the Arbitration Act (right of appeal from High Court decisions setting aside or varying arbitral awards)
Relief refused
#SBM Bank's appeal against the High Court judgment setting aside the arbitral award and entering judgment for Afrasia Bank
Want of jurisdiction: no valid leave was granted for a section 35 appeal, and the parties' agreement to appeal to the High Court did not amount to an agreement for a second appeal to the Court of Appeal under section 39(3)(a)
Costs
Costs to the respondent (Afrasia Bank Limited)
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.
Ultimately we strike out this appeal with costs to the respondent.
An agreement that parties have a right to appeal to the High Court on any question of law is not a right to a further appeal to the Court of Appeal. The right to a second appeal to this Court must be expressly reserved by the agreement of the parties.
We have no doubt that the peremptory leave granted, upon an oral application, without a rendition of reasons by the trial court hopelessly falls short of the test set by Nyutu and Synergy.
The forum before which leave ought to be sought and granted is a matter we are invited to determine by the parties here.
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "SMB Bank (Kenya) Limited v Afrasia Bank Limited (Civil Appeal E620 of 2022) [2025] KECA 386 (KLR)", Case Analysis (2025). Civil Appeal No. E620 of 2022. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2025/386/eng@2025-02-28
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.