The High Court has declined to suspend the implementation of a controversial Sh80 billion cooperation deal between the national government and Nairobi City County, setting the stage for a full hearing of two petitions challenging its legality.
Justice Gregory Mutai instead ordered an expedited hearing of the dispute, directing parties to file and exchange responses and submissions ahead of a May 28, 2026 session to highlight arguments.
The twin petitions—filed by Christine Gathoni and Bernard Peter, and Katiba Institute—seek to stop the agreement signed on February 17, 2026, pending determination of its constitutionality.
The petitioners argue the pact between President William Ruto’s administration and Governor Johnson Sakaja unlawfully restructures devolved functions and exposes public funds to unapproved spending.
They want the court to suspend the deal, bar the formation of its steering and implementation committees, and stop any allocation or disbursement of public funds tied to it.
They also seek referral of the case to the Chief Justice for empanelment of a bench of at least five judges, citing weighty constitutional issues concerning intergovernmental relations and devolution system of governance.
At the centre of the constitutional dispute is a cooperation framework covering joint projects in roads, waste management, housing, markets, urban planning, and water and sanitation.
Lawyer Henry Paul Gichana, appearing for Katiba Institute, told the court the agreement risks misuse of public funds and violates the constitutional division of functions.
He argued the national government had indicated plans to commit Sh80 billion to the deal, yet the funds were not provided for in any approved budget or fiscal framework.
“The Sh80 billion was neither contained in the last budget, the supplementary budget, nor the budget policy statement,” he told the court on Monday.
Mr Gichana warned that allowing implementation to proceed would expose taxpayers to irreversible loss, as public funds could be spent unlawfully.
He further argued the contested agreement compels the national government to finance functions exclusively assigned to counties, including water, sewerage, and street lighting.
“This leads to duplication, where both levels of government fund the same functions, resulting in wastage of scarce public resources,” he told the court.
He urged the judge to issue conservatory orders, saying there would be no prejudice in temporarily halting the cooperation agreement.
But the respondents, including the county government and the Attorney General, opposed the request, insisting the petitioners had not met the legal threshold for granting conservatory orders.
Lawyer Austine Enock Oduor, for the county government, argued the agreement is structured within constitutional and fiscal frameworks, and does not authorize any unlawful expenditure.
“No money will be expended outside the constitutional structure,” Mr Oduor said, pointing to clauses outlining funding sources.
He maintained the project serves public interest by improving services for Nairobi residents and should not be halted.
Another lawyer, Dan Weche, told the court there was no urgency to justify interim orders, noting a previous judge had declined to grant similar relief.
“The Constitution allows cooperation between the national and county governments. There is no provision requiring them to operate in isolation,” he said.
He added that accountability measures and compliance with the Public Finance Management Act were built into the agreement.
Nonetheless, Mr Gichana maintained that the agreement violates the principle that funds must follow functions, warning of unconstitutional spending and duplication.
He said the risk of misapplication of public funds could not be reversed, unlike a delay in implementing the agreement.
However, Justice Mutai declined to issue conservatory orders, saying the matter should proceed to full hearing on priority basis.
“The interests of justice would be served by hearing the application on its merits on an expedited basis,” he ruled. The judge directed respondents to file any outstanding responses within seven days and set timelines for submissions.
The case will be heard on May 28, when parties will highlight their submissions before the court determines whether to suspend or nullify the agreement.
The outcome could have far-reaching implications on the structure of devolution, intergovernmental relations, and the management of public funds tied to Nairobi city’s development.
