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Railways retirees suffer big blow in Sh5.4 billion World Bank payout case

By Kamau Muthoni | Mar 29th 2022 | 2 min read

Justice James Riika threw out the case noting that the World Bank had nothing to do with the contract. [File, Standard]

Retirees of the Kenya Railways Corporation suffered a major blow after the Labour Court threw out a case they had filed to force the government to release Sh5.4 billion payout from the World Bank.

The workers, through Rift Valley Railways Workers Union, had sued the World Bank Africa region, the Attorney General, Ministry of Communications and the Ethics and Anti-Corruption Commission (EACC) claiming that the government never passed over the money to retirees from 2006.

They also sued the Kenya Railways Staff Benefits Scheme and roped in the Assets Recovery Agency (ARA) as an interested party.

However, Justice James Riika threw out the case noting that the World Bank had nothing to do with the contract between Kenya Railways and its employees.

According to Justice Riika, it was not possible to compel the global bank to release any other monies since the court had no supervisory powers over it.

“The first respondent has nothing to do with the contractual obligations between the employer and its employees. If the first respondent released certain monies as pleaded by the claimant, how is the court to again order the first respondent to release and or pay the amounts to claimant’s members?” posed Justice Riika.

The judge also found that the bank enjoyed immunity and therefore could be pursued in the country.

The dispute started in 2006 after the government carried out a rationalisation programme.

In the case, the union argued that the World Bank released Sh5.4 billion from its safety net benefits programme to cover payments for retirees, but the money was never reached the intended beneficiaries.

The judge heard that there were three other cases by retirees pursuing the benefits.

The claimants had also sought orders to block the government from renting the pensioners’ assets.

According to the union, the court should order a legitimate organ to be constituted to run the affairs of the pensioners’ scheme. ARA and the World Bank asked the court to dismiss the case. They argued that there was no case against them.

They questioned why the union had taken long to pursue the rights of its members. The court heard that the events at the heart of the case happened in January 2006 while the first case was filed in 2007 and another in 2013.

At the same time, the union was not a party in the two cases.

Justice Riika agreed with the duo. He noted that ARA was enjoined in the dispute 14 years after a grievance emerged from its members.

He ruled: “It is definitely time-barred, particularly with regard to the new respondents and interested parties, the claimant has arbitrarily opted to enjoin to the dispute through the fresh proceedings, 14 years after the cause of action arose. They were not Parties in the Claims filed in 2007 and 2013.” 

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