Supreme Court nullifies Sacco laws

The Supreme Court has nullified several laws, including the Savings and Credit Cooperative Organisations (Sacco) Societies (Amendment) Act of 2018, that were passed without the input of the Senate.

The full bench of the Supreme Court presided by Chief Justice Martha Koome said the amendment to the Sacco Societies Act and the amendments made to sections 3 and 4 of the Kenya Medical Supplies Agency (Kemsa) Act by the Health Laws (Amendment) Act of 2019 affected the functions and powers of the counties, hence ought to have been considered by the Senate.

The judges, however, said given these peculiar circumstances, they suspended the effect of unconstitutionality of the Sacco Societies (Amendment) Act, 2018 for a period of 18 months from the date of the judgment.

This was to give Parliament ample time to consider enacting legislation in a manner that conforms to the constitutionally prescribed legislative process and for Senate to get the opportunity to have its input on the same.

“Accordingly, we are in agreement with the findings by the Court of Appeal that the purchase of drugs and medical supplies from KEMSA was a matter that required the participation of the Senate,” said the judges.

The apex court judges further upheld the finding by the Court of Appeal in 2021 that the Senate ought to have been involved in the consideration and enactment of the Equalisation Fund Appropriation Act of 2018.

The Supreme Court judges said the declaration of invalidity for the provisions in the Kemsa Act and Equalisation Fund Appropriation Act, would take immediate effect as they did not see any unique hardship or circumstance that would justify the suspension of the declaration.

In yet another win for the Senate, the Supreme Court judges affirmed the Court of Appeal decision that the Speaker of the National Assembly was under obligation to notify the Speaker of the Senate of the view they take of a Bill as to whether it concerns counties.

The judges said the notification is to facilitate and enable not only the determination of any question as to the nature of the Bill, but also the concurrence process in the event of a dispute as regards the nature of a Bill.

The court said a purposive interpretation of Article 110(3) led to the conclusion that determining whether a Bill concerns county government, and its nature, can only occur if the two Speakers—who are central to the concurrence process—are aware of and informed about Bills being introduced in either House.

“This demands a proactive approach. The Speakers must ensure transparency and clarity at the outset of the legislative process by informing the Speaker of the other House of the introduction of a Bill and the view they have taken as to whether the Bill concerns counties,” said the judges.

The court said the approach minimises unnecessary procedural interruptions or the invalidation of the legislative process at a later stage.

The apex court further agreed with the appellate court that it was not a condition precedent that all Bills published by either House have to be subjected to the concurrence process.

The judges added that concurrence process would be activated only upon a question arising as to whether a Bill is one concerning counties.

“For instance, if the Speakers of both Houses independently agree that a Bill concerns counties and proceed on that basis, there would be no question to resolve. Conversely, if there is doubt or conflicting positions by the two Speakers, then the joint resolution mechanism kicks in,” the judges said.

On the contentious issue of enactment of money Bills, the apex court said a holistic consideration of provisions laws pointed that the Constitution excluded the Senate from the consideration and enactment of money Bills.

“The exclusion of Article 114 from the scope of Article 96(2) clarifies that the Senate does not participate in the enactment of money Bills. When a Bill falls within the category of a money Bill, it removes the power of the Senate to introduce and consider such a Bill,” said the judges.

The court added that the exclusion of the Senate from participating in the enactment of money Bills was not an anomaly but deliberate, as it aligned with established legislative practices in other asymmetrical bicameral systems.

The Supreme Court judges said that recognising the critical role of financial legislation in ensuring the smooth functioning of the State and the effective delivery of public services, many constitutions prescribe specific legislative procedures for money Bills.

“Given the foregoing analysis, we come to the same conclusion as the Court of Appeal, that the Senate is not to be involved in the consideration and enactment of a money Bill,” said the judges.

The judges also agreed with the Senate that the Court of Appeal erred in making a determination on the constitutionality of the Parliamentary Service Act, 2019, despite the fact that it was not an issue for consideration before the High Court.

The court said the question of the constitutionality of the Parliamentary Service Act, was not properly before the Court of Appeal.

The judges said the determination on the constitutionality of the statute should await ongoing court processes pending before the High Court.

“Based on the foregoing, we find that the appellate court overstepped its jurisdiction by making pronouncements on broader issues not properly placed before it, by venturing into matters that were neither ripe for determination nor fully litigated by the parties,” the judges said.