The High Court has ordered the Central Bank of Kenya to restore Nairobi County's banking mandate after finding that an arrest warrant against former finance executive Charles Kerich made compliance with a signatory handover procedure impossible.
The court allowed the county to resume financial operations and ruled that the county had lawfully appointed Ibrahim Auma Nyangoya as County Executive Committee Member for Finance and Economic Planning.
The county moved to court after CBK required both outgoing and incoming finance executives to appear physically to verify account balances before changing authorized signatories.
Nairobi argued that the requirement became impossible because the former office holder, Charles Kerich, was unavailable after warrants of arrest were issued in an unrelated case.
The county told the court that it had notified CBK of Mr Nyangoya's appointment, supported by a June 5 appointment letter and a June 24 Kenya Gazette notice, but the banking mandate remained unchanged.
Godfrey Akumali, the Acting County Secretary, said the county remained "ready and willing to comply with every operational requirement of the CBK save only the physical attendance of the former office holder, which has become impossible through circumstances beyond the Applicant's control."
Court papers said the county government became unable to "effectively process payments, execute financial instruments and discharge various statutory obligations requiring the participation of the County Executive Committee Member responsible for Finance and Economic Planning."
Justice David Mburu said the orders were "solely facilitative and consequential orders directing the respondent to implement an appointment already made by the Governor pursuant to the Constitution and statute."
He said the finance office should never face prolonged vacancies because county operations would otherwise halt.
The judge declared compliance with CBK's physical attendance requirement impossible in the circumstances and ordered the bank to recognise Mr Nyangoya immediately without requiring the former office holder's participation.
Nairobi filed the urgent application on July 9 after county officials said CBK officers advised that only a court order could resolve the impasse.
The motion was certified urgent. The supporting affidavit was sworn by Acting County Secretary Godfrey Akumali, who said delayed implementation exposed the county to default risks while interrupting constitutional and statutory obligations.
He argued uninterrupted public finance management required immediate judicial intervention to protect services.
The ruling did not fault CBK for maintaining its operational safeguards or question the governor's appointment powers.
Instead it addressed an exceptional administrative deadlock created by the former office holder's absence and the resulting inability to complete routine banking formalities lawfully promptly.
The decision highlighted how succession procedures can affect public finance administration when key officials become unavailable during mandatory handover processes unexpectedly alike.
The court concluded that uninterrupted county governance and continuity of essential financial administration required immediate implementation of the lawful appointment.
