Supreme Court Will Now Decide the famed case; Embassy of Sweden, Nairobi v Lucy Muingo Kusewa & Renald Mbonje Mjomba.
“Employment contracts have been held to belong to the Private Law domain and State Immunity does not therefore apply … the respondents were locally employed and their contracts of employment were therefore subject to the jurisdiction of the Employment and Labour Court.” – Karanja, Okwengu & Sichale JJ.A.
Introduction
In the landmark Embassy of Sweden, Nairobi v Kusewa & Mjomba (2020) decision, the Court of Appeal decisively ruled that a foreign embassy cannot invoke diplomatic or state immunity to oust a Kenyan court’s jurisdiction over employment disputes involving locally hired staff.
The Court definitively categorized such employment contracts as belonging to the realm of private law, fundamentally distinct from sovereign or governmental acts. Consequently, the Employment and Labour Relations Court (ELRC) was affirmed to possess full jurisdiction to adjudicate the respondents’ claims, including unfair termination and pension entitlements.
However, the legal landscape remains dynamic. On 12th June 2026, a subsequent Court of Appeal bench (Tuiyott, Hassan & Ongaya JJ.A) granted the Embassy leave to appeal to the Supreme Court of Kenya. The Court certified the following critical question as a matter of general public importance:
“Whether a person’s employment at a foreign embassy falls within the ordinary functions of a diplomatic mission or constitutes commercial activity capable of displacing diplomatic immunity.”
This certification underscores the conflicting jurisprudence emanating from the Court of Appeal itself. Notably, in African Development Bank v Beatrice Agnes Acholla (2015), the Court previously determined that labeling an employment claim as a “commercial transaction” improperly overextended the concept. The Kusewa panel, however, arrived at a diametrically opposed conclusion without confronting the Acholla precedent.
The Supreme Court is now tasked with resolving this jurisdictional schism. Importantly, it must answer the lingering question left open by the Court of Appeal in the Karen Njeri Kandie (2017) case: whether employment within an embassy, involving a sovereign employer, inherently constitutes commercial activity or operates under a distinct legal paradigm.
What This Means While the Matter is Pending
Pending the Supreme Court’s definitive ruling, the Court of Appeal’s 2020 judgment in Kusewa remains binding precedent. Foreign missions encompassing embassies, high commissions, consulates, and international organizations cannot currently rely on diplomatic or state immunity to strike out ELRC proceedings initiated by locally engaged staff.
This legal reality yields several immediate practical implications:
- Locally engaged staff retain unfettered access to the ELRC. Employees of foreign missions operating under Kenyan employment contracts provided they are not recruited to exercise direct governmental authority or diplomatic functions are legally entitled to pursue claims for unfair termination, redundancy, and statutory reliefs before the ELRC. The absolute defense of immunity is presently unavailable against such actions.
- Foreign missions bear genuine legal exposure under Kenyan employment law. Embassies and similar entities must manage their locally engaged workforce with the requisite standard of care mandated by the Employment Act, 2007. Stripped of absolute immunity, procedural failures concerning termination, non-payment of terminal dues, or contractual breaches can result in binding, enforceable judicial decrees.
- The Supreme Court’s eventual pronouncement will carry profound, systemic implications. Should the Supreme Court overturn the Court of Appeal, foreign missions may successfully reassert immunity in employment disputes, potentially stripping locally engaged employees of effective domestic judicial recourse. Conversely, an affirmation of the Court of Appeal’s stance will conclusively settle the jurisdictional debate, imposing a clear, binding obligation on foreign missions to strictly adhere to Kenyan employment law regarding locally hired personnel.
Conclusion
In the interim, proactive risk management is essential. Both foreign missions and their locally engaged employees should capitalize on this period to audit their employment frameworks, ensure contractual clarity regarding governing law and dispute resolution mechanisms, and seek specialized legal counsel to mitigate exposures pending the Supreme Court’s final determination.
This article is provided free of charge for information purposes only; it does not constitute legal advice and should be relied on as such. No responsibility for the accuracy and/or correctness of the information and commentary as set in the article should be held without seeking specific legal advice on the subject matter. If you have any query regarding the same, please do not hesitate to contact our Employment and Labour Relations Department vide WAELR@wamaeallen.com
About the author
Caxstone specializes in civil, employment and labour disputes, constitutional law, family law and succession, and environment and land matters. He has amassed a wealth of knowledge and experience in litigation which is evident in the successes obtained for clients. He is an active member of the Employment and Labour Relations Court Bar-Bench committee.
Nadio George is a dedicated Advocate of the High Court of Kenya, passionate about legal excellence, societal progress, and environmental stewardship. Admitted to the Roll of Advocates in 2023, he combines deep legal expertise with a strong commitment to making meaningful contributions to both the legal profession and the community.
Denis Mutugi specializes in Commercial Litigation and Alternative Dispute Resolution.
Denis graduated with a Bachelor of Laws, LLB (Hons) from The University of Nairobi in 2021 and was admitted to the Roll of Advocates of the High Court of Kenya in the year 2023.
Denis has amassed a considerable wealth of experience in conducting legal research on various complex legal matters touching on Commercial, Insurance, Employment and Insolvency law and bankruptcy.
