African Trade Insurance Agency (ATI) v Otieno & another

and other international instruments forming part of the law of Kenya under Articles 2(5) and 2(6). The appellant asserted that it had not waived that immunity and that the 1st respondent had improperly framed an ordinary employment dispute as a constitutional petition to circumvent the jurisdictional bar. 4. In opposition, the 1st respondent argued that the petition properly raised constitutional issues concerning alleged violations of fundamental rights and freedoms, which fell within the jurisdiction of the ELRC. He maintained that the appellant could not invoke institutional immunity to shield itself from accountability for constitutional violations arising from an employment relationship. He urged the court to dismiss the P/O and allow the petition to proceed to hearing. 5. By a ruling delivered on 25th October 2019, the ELRC dismissed the P/O, thereby allowing the petition to proceed to hearing. Aggrieved by that decision, the appellant lodged a Notice of Appeal expressing its intention to challenge the ruling before this Court. The grounds set out in the memorandum of appeal dated 14th February 2020, allege that the learned judge erred in law: i. By dismissing the preliminary objection by the appellant and failing to nd that the appellant enjoys diplomatic immunity and could not be impleaded in the courts of this country without its consent, or without waiving its diplomatic immunity. ii. By relying solely on the Host Country Agreement dated 12th April 2001, to make the conclusion that the appellant is subject to the jurisdiction of the laws of Kenya. iii. By nding that the court had jurisdiction on the basis that the dispute between the parties was not an ordinary employment claim. iv. By misapprehending and misapplying the principles set out by the Court of Appeal & Supreme Court of Kenya in the case of Karen Njeri Kandie vs Alassane Ba & Shelter Afrique (2017) eKLR and failing to apply the correct principles as relates to ouster of immunity. 6. M/s Koceyo & Co. Advocates led submissions dated 29th October, 2020 for the 1st respondent in opposition to the appeal,while the 2nd respondent’s submissions dated 12th December, 2021 in support of the appeal were led by the learned Principal State Counsel Lorna Orege. 7. The appellant led written submissions dated 15th December, 2020 through the rm of M/s Anjarwalla & Khanna LLP Advocates, contending that the learned judge erred in dismissing the P/O, despite nding that it raised a pure point of law within the principles stated in Mukisa Biscuit Manufacturing Co. Ltd v West End Distributors Ltd [1969) E.A. 696. The appellant argues that it enjoys immunity from suit and legal process under the Privileges and Immunities Act, Legal Notice No. 89 of 2001, the ATI Treaty and the Host Country Agreement, none of which had been waived. Consequently, the ELRC lacks jurisdiction to entertain the petition. 8. The appellant contends that the trial court improperly relied on selected provisions of the Host Country Agreement, while disregarding the ATI Treaty, the Privileges and Immunities Act and Articles 2(5) and 2(6) of the Constitution, which incorporate ratied treaties into Kenyan law. It is submitted that these instruments must be read harmoniously as collectively, they confer immunity upon the appellant. https://new.kenyalaw.org/akn/ke/judgment/keca/2026/1914/eng@2026-09-25 2

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9. The appellant argues that the 1st respondent's claim was, in substance, an employment dispute disguised as a constitutional petition to circumvent the appellant's immunity. It is urged that Article 16(1)(b) of the ATI Treaty expressly bars legal proceedings against the appellant in personnel matters and that the 1st respondent ought to have pursued the internal dispute resolution mechanisms provided under his contract of employment and the ATI Sta Manual. 10. Finally, the appellant submits that the learned Judge misapplied the decisions in Karen Njeri Kandie v Alssane Ba & Shelter Afrique [2017] eKLR and other authorities, which recognize that immunity from suit is a legitimate and constitutionally permissible limitation on the right of access to justice. The appellant therefore, urges the Court to allow the appeal, set aside the impugned ruling and uphold the P/O by striking out the petition for want of jurisdiction. 11. The 2nd respondent supports the appeal and has adopted the 1st appellant's submissions. Counsel submits that the appellant, as an international organization established by treaty, enjoys immunity from suit and legal process under the Privileges and Immunities Act, the Vienna Convention on Diplomatic Relations, the ATI Treaty and the Headquarters Agreement, all of which form part of Kenyan law by virtue of Article 2(6) of the Constitution. It is asserted that the appellant has not expressly waived that immunity and consequently, the ELRC lacks jurisdiction to entertain the petition. 12. The 2nd respondent further submits that the dispute arose from personnel matters, which are protected by the appellant's functional immunity and are governed by the dispute resolution procedures established under the ATI Treaty, the Headquarters Agreement and the 1st respondent's contract of employment. Counsel contends that the 1st respondent is bound to exhaust those internal mechanisms before invoking the jurisdiction of the domestic courts. 13. Relying on authorities including Ministry of Defence of the Government of the United Kingdom v Joel Ndegwa [1983] eKLR, and Karen Njeri Kandie v Alssane Ba & Another, (supra), counsel argues that diplomatic immunity, where properly established, constitutes a legitimate limitation on the right of access to justice. It also protects international organizations from interference by national courts in matters concerning their internal administration. 14. In rebuttal, the 1st respondent posits that the learned Judge correctly dismissed the P/O because it did not raise a pure point of law within the meaning of Mukisa Biscuit Manufacturing Co. Ltd v West End Distributors Ltd (supra). It is submitted that the objection invites the court to determine substantive constitutional questions concerning the validity and scope of the appellant's claimed immunity, matters which can only be resolved upon a full hearing of the petition. 15. Counsel further argues that the petition is not an ordinary employment dispute, as it principally seeks declarations that the statutory and treaty instruments conferring immunity upon the appellant are inconsistent with the Constitution. As such, the ELRC, being a superior court with jurisdiction to determine constitutional issues arising in Employment and Labour Relations Court, is properly seized of the matter. Reliance is placed on several decisions including: USIU v Attorney General, Nancy McNally v International Centre of Insect Physiology and Ecology (ICIPE) - Civil Appeal No. 42 of 2017, and Philip Mark Busuru v International Union for Conservation of Nature (IUCN) & Another - Petition 44 of 2017, where the courts recognized the jurisdiction of the ELRC to interpret the Constitution in employment-related disputes involving international organizations. 16. It is urged that the learned judge properly construed the Host Country Agreement, whose provisions recognize the applicability of Kenyan law and the jurisdiction of Kenyan courts, subject only to the relevant exceptions. It is argued that the trial court correctly held that the constitutional challenge to https://new.kenyalaw.org/akn/ke/judgment/keca/2026/1914/eng@2026-09-25 3

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the appellant's immunity could not be defeated at the preliminary stage merely by invoking statutory and treaty- based privileges. 17. The 1st respondent asserts that the appellant's claim to immunity is, in any event, subject to the doctrine of restrictive immunity, which excludes employment disputes and other matters arising under private law from the scope of diplomatic immunity. He relies on Karen Njeri Kandie v Alssane Ba & Another, (supra) and Unicom Ltd v Ghana High Commission [2016] eKLR, and related authorities, which recognize that employment contracts are private law transactions for which immunity does not ordinarily attach. The 1st respondent therefore, urges the Court to nd that the learned Judge properly exercised jurisdiction. That the appeal be dismissed and the ruling that declined to uphold the P/O be armed. 18. The appeal came before the Court for plenary hearing on 23rd February, 2026. M/s Macharia learned counsel appeared for the appellant and relied on the led submissions. In her brief highlights, counsel urged that the appellant’s immunity is express, mandatory and undisputed, as provided in Article 16(1) (b) of the ATI Treaty, and Legal Notice No. 89 of 2001 enacted by Kenya pursuant to the Privileges and Immunities Act. Counsel submitted that Article 16(1)(b) expressly extends the immunity to personnel matters and this appeal arises from an employment relationship. The respondent therefore has a remedy. 19. Counsel further urged that the 1st respondent having expressly accepted that any dispute in their relationship would be resolved through the internal dispute resolution mechanism, he cannot bypass it to invoke domestic law. Filing the pleadings as constitutional violations does not change the claim from being an employment one and does not create jurisdiction for the court. Lastly, that the constitutive documents show that constitutional issues can only be brought against the State. 20. M/s Olalo learned counsel held brief for Mr. Koceyo learned counsel for the 1st respondent and also relied on the led submissions. In her brief highlights, Counsel urged that the trial court had jurisdiction to determine this case because it involved the interpretation of Article 16(1)(b) of the ATI Treaty and Article 41 of the Constitution. Counsel submitted that the appellant’s actions contravened the rights of the 1st respondent, and our Constitution and the Employment Act are superior to Article 16(1)(b) of the ATI Treaty. 21. On the question of immunities and privileges counsel referred to the case of Nancy McNally v International Centre of Insect Physiology and Ecology (ICIPE) urging that the Court of Appeal dismissed the question of immunity on account of the superiority of the Constitution. Counsel submitted that the trial court had jurisdiction to interpret Article 16(1)(b) of the ATI Treaty and Article 41 of the Constitution and that the immunity adverted to is not absolute 22. The 2nd respondent was absent although duly served with the hearing notice. 23. A rst appeal to this Court from a trial by the High Court is by way of retrial and the principles upon which this Court acts in such an appeal are well settled. Briey stated, this Court is required to reconsider the evidence, evaluate it itself and draw its own conclusions, always bearing in mind that it has neither seen, nor heard the witnesses and should make due allowances therefore. (See- Imanyara & 2 others v Attorney General [2016] KECA 557 (KLR). 24. We have anxiously considered the record of appeal, the rival submissions and the law and the issues we discern for our determination are: whether the P/O raises a pure point of law; whether the law expressly bars legal proceedings against the appellant in personnel matters; and, whether the 1st appellant exhausted the internal mechanism of dispute resolution. https://new.kenyalaw.org/akn/ke/judgment/keca/2026/1914/eng@2026-09-25 4

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25. In Mukisa Biscuit Manufacturing Co. Ltd. Versus West End Distributors Ltd. (supra), the Court of Appeal for East Africa described a P/O as follows: “ A preliminary objection consists of a point of law which has been pleaded or which arises by clear implication out of the pleadings, and which if argued as a preliminary point may dispose of the suit. Examples are an objection to the jurisdiction of the Court, or a plea of Limitation or a submission that the parties are bound by the contract giving rise to the suit to refer the dispute to arbitration. A preliminary objection is in the nature of what used to be a demurrer. It raises a pure point of law which is argued on the assumption that all the facts pleaded by the other side are correct. It cannot be raised if any fact has to be ascertained or if what is sought is the exercise of judicial discretion.” 26. In the current appeal, the appellant submits that its P/O satised the threshold set out in Mukisa Biscuit Manufacturing Co. Ltd v West End Distributors Ltd, because it raises a pure question of law. That is, whether the ELRC had jurisdiction to entertain proceedings against an international organization enjoying immunity from suit and legal process. It is submitted that the objection neither required the ascertainment of contested facts, nor invited the exercise of judicial discretion, but called solely for the interpretation and application of constitutional, statutory and treaty provisions governing immunity. The appellant further argues that once immunity was established and had not been expressly waived, the question became one of jurisdiction, which is properly determined as a preliminary issue. 27. The 2nd respondent supports the appellant’s position, and submits that the relevant facts were uncontested and that the only issue before the court was the legal eect of the Privileges and Immunities Act, the ATI Treaty, the Headquarters Agreement and the respondent's contract of employment. 28. The 1st respondent takes a contrary view and urges that the P/O did not raise a pure point of law because it required the court to determine substantive constitutional questions concerning the validity and scope of the appellant's claimed immunity. It is argued that the petition principally challenges the constitutionality of the statutory and treaty instruments conferring immunity upon the appellant and that those issues can only be resolved after a full hearing. 29. The trial court considered whether the P/O met the requisite threshold and pronounced itself as follows: “ The threshold for a preliminary objection was set out in the case of Mukisa Biscuit Manufacturing Company Limited vs. West End Distributors Limited [1969] EA 696 as follows“A preliminary objection is in the nature of what used to be a demurrer. It raises a pure point of law and it is argued on the assumption that all the facts pleaded are correct. It cannot be raised if any fact needs to be ascertained, or if what is sought is the exercise of judicial discretion.” The Court of Appeal expounded on the issue when it held as follows in the case of Karen Njeri Kandie vs. Alassane Ba & Shelter Afrique [2015] eKLR“A plea of immunity from legal process is such as was raised by the Respondents before the Court below appears to us to be a proper subject of a Preliminary Objection which https://new.kenyalaw.org/akn/ke/judgment/keca/2026/1914/eng@2026-09-25 5

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raised a threshold issue to be determined in limine. It has to be so because its eect is to raise a procedural bar to the Court’s jurisdiction and it behoves the Court to rst address and pronounce itself on it before it can embark, if at all, on hearing the rest of the dispute.” Consequently, I nd that the 1st Respondent’s preliminary objection meets the threshold set out in Mukisa Biscuit Manufacturing Company Limited [SUPRA].” 30. We observe that the material facts giving rise to the objection were not in controversy. It is common ground that the appellant is an international organization established under the ATI Treaty; that Kenya enacted Legal Notice No. 89 of 2001 pursuant to the Privileges and Immunities Act; that the appellant had not expressly waived its immunity; and that the dispute arose from an employment relationship between the parties. The controversy lay solely in the legal consequence of those undisputed facts, namely, whether the appellant's immunity deprives the ELRC of jurisdiction to entertain the petition. Measured by the standard in Mukisa Biscuit Manufacturing Co. Ltd (supra), we agree with the trial court that the appellant's P/O raised a pure point of law. 31. Next, we consider whether the law expressly bars legal proceedings against the appellant in personnel matters. The appellant, supported by the 2nd respondent, submits that as an international organization established under the Agreement Establishing the ATI Agency, it is clothed with immunity from suit and legal process by virtue of the Privileges and Immunities Act, the ATI Treaty and the Headquarters Agreement. It is argued that these instruments, read together with Articles 2(5) and 2(6) of the Constitution, form part of the law of Kenya and confer upon the appellant immunity from the jurisdiction of Kenyan courts. The appellant further contends that the dispute arose from personnel matters, which are expressly excluded from legal proceedings under Article 16(1)(b) of the ATI Treaty. 32. The 1st respondent on the other hand, posits that the petition is not an ordinary employment claim but a constitutional challenge to the validity and scope of the statutory and treaty instruments conferring immunity upon the appellant. It is argued that the ELRC is possessed of the jurisdiction to determine constitutional questions arising in employment disputes. That the appellant's immunity, if any, is restrictive rather than absolute and does not extend to employment disputes, which fall within the domain of private law. 33. This is what the trial court said regarding section 16 (1) (b) of the Agreement Establishing the ATI Agency: “ I am of the view that since one of the prayers by the Petitioner is to have Article 16(1)(b) declared unconstitutional and void, the Court must allow the Petition to be argued before a determination is made on this issue. Article 16(1) of the African Trade Insurance Agency is not framed to confer absolute immunity to the 1st respondent.” 34. This issue is not new to this Court. In the case of Ministry of Defence of the Government of the United Kingdom vs. Joel Ndegwa [1983] KECA 114 (KLR), this Court held that: “ It is apparent that there is no absolute sovereign immunity. It is restrictive. The test is whether the foreign sovereign or government was acting in a governmental capacity………… then the doctrine will apply otherwise it will not aord protection to a private transaction. The nature of the act is, therefore, important.” https://new.kenyalaw.org/akn/ke/judgment/keca/2026/1914/eng@2026-09-25 6

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35. Section 9 of the Privileges and Immunities Act and Part I of Schedule 4 of the Privileges & Immunities Act provide that: “ The Minister may, by order-(a) 36. Further, Article 16 (1) of the Agreement Establishing the ATI Agency provides as follows: “ 16 (1) 37. Provide that an organization to which this section applies... shall, to such extent as may be specied in the order, have the immunities and privileges set out in Part I of the Fourth Schedule to this Act and shall also have the legal capacities of a body corporate; ... Actions may be brought against the Agency only in a court of competent jurisdiction in the territory of a Member State in which the Agency has its permanent or temporary headquarters or an oce, or in the territory of any State where it has appointed an agent for the purpose of accepting service or notice of process, or has otherwise agreed to be sued. No such action against the Agency may be brought: a. By a Member or a former Member of the Agency or persons acting for, or deriving claims from, a member or a former Member; or b. In respect of personnel matters. he above provisions indicate that the appellant was granted immunity against legal proceeding in relation to personnel matters. On this we are guided by Karen Njeri Kandie vs. Alssane Ba & Another (supra), where the Court held that: “ Taking all of these instruments together, it seems plain to us that Kenya did voluntarily enter into agreements and obligations that are binding upon it. It gave undertakings with regard to immunities and privileges for the respondents that it cannot lawfully resile from. The principle of international law rendered pacta sunt servanda, that treaties are meant to be binding which imposes an obligation on parties thereto to serve or honour them, seems to us to be a salutary and indispensable element of international intercourse. It follows, therefore, that in enacting the Shelter Afrique Act, Kenya was obligated to ensure that it did not repeal, amend, or add to what it had voluntarily undertaken.” 38. The 1st respondent’s prayers at paragraph 40 of his petition are: a. An injunction restraining the 1st Respondent from terminating the Petitioner’s contract of employment on account that the amended Treaty has by operation converted and extended the petitioner’s employment period to 5 years. b. A declaration that the privileges and immunities granted to the 1st Respondent by the Government of Republic of Kenya as detailed in the agreement signed on the 12th April 2001 are unconstitutional, null and void in relation to the Employment Act 2017. c. A declaration that Article 16 (1) (b) of the treaty establishing the 1st Respondent dated 18th May 2001 is unconstitutional null and void. https://new.kenyalaw.org/akn/ke/judgment/keca/2026/1914/eng@2026-09-25 7

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d. A declaration that the Respondents have infringed on the petitioners Constitutional rights under Article 2 (4), (5) and (6), 27 (1) & (2), 28, 41 (1) & (2) and 48 of the Constitution. And alternatively, in the event that the 1st Respondent terminates the Petitioner’s contract illegally. e. DAMAGES FOR BREACH OF constitutional Rights and Discriminatory Practice against the petitioner Kshs. 10,000,000/= f. 12 months compensation for unfair loss of Employment Kshs. 35,474,613/= g. Compensation for the unexpired term of the contract 3 years kshs.106,423,200/= h. Any other or further order this Honourable Court may deem t to grant in the circumstances. 39. In our view, while the 1st respondent argues that the petition principally challenges the constitutionality of the instruments conferring immunity, the substance of the pleadings demonstrates that the dispute arose from the termination of his employment and the reliefs sought were founded upon that employment relationship. The constitutional declarations sought were, therefore, ancillary to, and arose directly from the employment dispute. 40. In those circumstances, we are persuaded that the appellant's immunity from suit and legal process remains intact and extends to the dispute giving rise to the petition. The trial Judge, therefore, fell into error in postponing the determination of the immunity question to the hearing of the petition, notwithstanding that the immunity asserted was capable of determination as a jurisdictional issue based on the applicable constitutional, statutory and treaty framework. 41. On the last issue, the appellant supported by the 2nd respondent, submits that the 1st respondent's claim was premature because Clause 16 of his contract requires all employment disputes to be resolved exclusively under the ATI Treaty and the Sta Manual. It is urged that Article 16(1)(b) of the ATI Treaty excludes domestic court proceedings in personnel matters and that, in the absence of an express waiver of immunity, the 1st respondent is bound to exhaust the internal dispute resolution mechanisms before approaching the court. 42. The 1st respondent, on the other hand argues that the petition raises constitutional questions concerning the validity and scope of the appellant's immunity, which could not be determined through the appellant's internal mechanisms. That the doctrine of exhaustion is, therefore, inapplicable. 43. Article 19 (2) of the Agreement Establishing the ATI Agency succinctly provides that: “ a) Members shall settle disputes concerning the interpretation or application of this Agreement by peaceful means, such as by negotiation, enquiry, mediation, conciliation, resort to regional agencies or arrangements or by any other peaceful means of their own choice. b. If the Members who are party to a dispute do not reach an agreement on a solution or on a dispute settlement arrangement within six (6) calendar months from the date of notication by one party to the other with a copy to the bureau of the General Meeting, the Chair of the Board of Directors and the Chief Executive Ocer that a dispute exists, the dispute shall, at the request of one of the concerned parties, be submitted for nal and binding decision by: https://new.kenyalaw.org/akn/ke/judgment/keca/2026/1914/eng@2026-09-25 8

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44. i. a regional judicial body associated with a Regional Economic Organization to which all the parties to the dispute are members; or ii. arbitration under UNCITRAL Rules, in which case the forum shall be Brussels, Belgium, the applicable law shall be laws of England and Wales and the proceedings shall be held in English language. The parties to the dispute may select a dierent forum for the arbitral proceedings; solely for reasons of cost and convenience; or iii. subject to the approval of the Board of Directors, arbitration under an alternative forum mutually agreed to by all parties to the dispute under procedural rules substantively similar to UNCITRAL Rules. Additionally, clause 16 of the letter dated 11th July 2016 from the appellant to the 1st respondent titled “Renewal of your Employment Contract dated 16th May 2013 for a period of 3 years eective from 12th July 2016 to 11th July 2019” states as follows: “ Any dispute between you and the Agency shall be resolved exclusively in accordance with the procedures laid down in the Agreement Establishing the African Trade Insurance Agency and Sta Manual.” 45. Having established that the dispute arose from an employment relationship. We nd that dispute resolution in the employment relationship herein was governed by the ATI Treaty, the Sta Manual and the parties' contract, all of which prescribe an exclusive internal dispute resolution mechanism. The 1st respondent does not demonstrate that those procedures were unavailable or ineective. In the circumstances, we nd that he was required to exhaust the available internal remedies before invoking the jurisdiction of the ELRC. 46. In the case of Kandie vs. Alssane BA & Another [2017] KESC 13 (KLR) (supra), the Court held that: “ In invoking Article 24(3), the respondents have presented submissions as to why this right is reasonably and justiably limited. It was argued on their behalf that, immunity is only a procedural bar, and not a limitation of the right to access justice, and it was not a disproportionate limitation as it served the purpose of fullling international law obligations of allowing diplomatic missions and its employees to carry out their functions.” 47. We agree with that holding. It is not unjustied to hold that the legitimate aim of diplomatic immunity is for the State to meet its obligations under international law, and to allow diplomats and those under diplomatic immunity, such as the appellant, to eectively conduct their ocial functions, without any hindrance. In that regard, we are cognizant that the right of access to justice provided under Article 48 is not an absolute right listed under Article 25 and for that reason it can, in proper circumstances, be limited by the law. 48. For all the foregoing reasons we nd that this appeal has merit and is, therefore, allowed. The ruling dated 25th October, 2019 dismissing the appellant’s preliminary objection dated 24th May, 2019 is hereby set aside and substituted with an order allowing the said preliminary objection. Each party shall bear its costs. https://new.kenyalaw.org/akn/ke/judgment/keca/2026/1914/eng@2026-09-25 9

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It is so ordered. DATED AND DELIVERED AT NAIROBI THIS 25TH DAY OF SEPTEMBER, 2026. W. KARANJA ............................ JUDGE OF APPEAL L. ACHODE ……………………… JUDGE OF APPEAL MURUNGI B. KAIRARIA ............................. JUDGE OF APPEAL I certify that this is a true copy of the original Signed DEPUTY REGISTRAR https://new.kenyalaw.org/akn/ke/judgment/keca/2026/1914/eng@2026-09-25 10

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