At least 200 State entities, including key parastatals, are now operating in limbo after the law that created them expired this week and the Court of Appeal rejected an application to extend their life beyond the 10-year period set for them in 2013.
The Statutory Instruments Act, 2013 provides for the automatic revocation of nearly 1,000 regulations—which were used to legalise the 22 agencies, and which provides for their workings—after 10 years, regardless of their nature.
Attorney General Justin Muturi and National Assembly Clerk Samuel Njoroge told the Sunday Nation that the government was mulling its options, including appealing the decision at the Supreme Court, as well as regularising the instruments.
“Something is being done to address the situation. As you have noticed, some of the affected regulations affect even the judiciary itself as well as the Law Society of Kenya and the advocates Act,” Mr Muturi said.
Mr Njoroge, on the other hand, said: “We will appeal the decision at the Supreme Court. We seek to have all the affected bodies enjoined in the case.”
As the State prepares to remedy the situation, it means that as it stands, bodies such as the Kenya Ordnance Factories Corporation, Kenyatta National Hospital, Moi Teaching Referral Hospital, Mathari National Teaching and Referral Hospital are operating without any legal instrument.
Others are Kenya Institute of Mass Communication, Youth Enterprise Development Fund, Information, Communications, Technology Authority, Kenya Film Commission (KFC), and the Kenya Vision 2030 Delivery Secretariat, which shall be dissolved on January 25, 2025.
The National Assembly had sought to fix the lacuna by extending their lifespans through an amendment brought in as part of the Finance Act, 2023.
But in declaring sections of it unconstitutional, the High Court faulted the House’s move that sought to delete the automatic expiry of the 2013 provision.
In a ruling this week, which also stopped the government from collecting the Housing Levy which had been declared unconstitutional but were still allowed to collect the levy, the Court of Appeal said the National Assembly had not provided any evidence of the law that will cease existing.
“Not even a single contract was placed before us to support this assertion. In the absence of cogent evidence to support such a grave assertion, the argument that the appeals will be rendered nugatory on this ground fails,” the judges said.
On potential job losses argued by the State, the court said Parliament failed to provide details of the jobs that will be lost in the event stay orders on the operation of the bodies is not granted.
“It has been argued that some government departments may shut down and jobs will be lost. However, details of the alleged jobs were not provided. The applicants left it to the court to fill the gaps. We cannot do so without appearing to descend into the arena of the dispute. We decline to do so,” the judges ruled.
The court also dismissed arguments that with the expiry of the Instruments Act, the government risks being sued for breach of contracts, saying there was no evidence to support the claim.
Last year, the High Court gave the National Assembly 45 days to re-introduce the expiry clause of section 21 in the Act. The 45 days expired on January 10, 2024 while MPs resume their sittings on February 13, 2024, raising real fear on the imminent dissolutions of the parastatals.
Section 21 of No.23 of 2013 of the Statutory Instruments Act that MPs wants deleted states that “a statutory instrument is by virtue of this section revoked on the day which is 10 year after the making of the statutory instrument, unless it is sooner repealed or expires or a regulation is made exempting it from expiry.”
The National Assembly, while considering the Finance Bill, now an Act, opted for the second option of exempting the regulations from expiry, a decision that has now been quashed by the court in its ruling.
Following the High Court ruling, the National Assembly had filed an appeal, arguing that the regulation relates to the Value Added Tax (VAT) and the excise duty, hence are related to the taxation question that was before the court.
The National Assembly through Justice and Legal Affairs Committee chairman George Murugara (Tharaka, UDA) had submitted that sections 88 and 89 of the Finance Act, 2023, which was nullified, affected over 1,000 statutory instruments in that it granted them a one-year lifeline.
Mr Murugara said that all the statutory instruments touch on the three arms of the government and some of them relate to collection of revenue from tribunals.
The MP argued that if the instruments are not kept alive, the affected institutions risk dissolution to the detriment of the public, and would be impossible to reconstitute the bodies because new statutory instruments will have to be enacted. The judges said nothing stops Parliament from re-enacting them.
