Akasaka International Law, Patent & Accounting Office.

Kenya Investment Series – Kenyan Law (2)

Sep 09, 2021

Kenyan Law

After looking at some basic introductory information on Kenya in part 1, we will now look at Kenyan law. Information on Kenyan laws is relatively well disclosed and easy to research. In addition, since the official language is English, it is easy for English speakers to understand the legal system.

Sources of Kenyan Law

With regard to the sources of law in Kenya, the Judicature Act will be helpful. The judicial power of the Supreme Court, the Court of Appeal and other lower courts shall be exercised in accordance with the following provisions (Article 3 of the Judicature Act):

A) The Constitution;

B) Statute law (prescribed by UK law1);

C) Case law, principles of equity, laws of general application issued in England on August 12, 1897, and the procedures and practices followed in the courts of England on that date, to the extent that the above statutes do not apply.

However, C) shall apply only if the situation in Kenya permits and requires it. In civil cases involving single or multiple parties, African customary law2 is applicable to the extent that it is effective, not contrary to justice and not inconsistent with statute.

In light of the above, Japanese investors need to consider at least the Constitution, statutes and case law, and possibly African customary law as well. Normally, it is expected that Japanese investors would want to know the laws that are practicable without paying attention to the Constitution. However, dramatic changes have been made since the adoption of the new Constitution in August 2010.

Changes made to the legal system

The following are some of the changes to Kenyan law that will affect the investment relationship in the future.

Separation of powers

With regard to the separation of powers among the legislative, executive, and judicial branches, in the past, ministers were required to be elected from among the members of the National Assembly, and ministers were responsible to the National Assembly. However, the new Constitution prohibits the President from appointing ministers from the members of the National Assembly (Article 152). The new Constitution prohibits the president from appointing ministers from the members of the National Assembly (Article 152), and the ministers are now responsible to the president (Article 153).

Thus, the separation of powers between the legislative and executive powers was made clearer3. The Parliament was divided into the House of Representatives4 (general assembly) and the Senate5 (Article 93). The former represents the constituencies and takes into account their interests at the national level (Article 95), while the latter represents the local counties and takes into account their interests (Article 96). In accordance with these roles, multiple procedures for validation were provided (Articles 95, 96 and 109 and following).

Decentralization

While maintaining the unitary state (Article 4 of the Law), the transition from a centralized state to a decentralized system6 has led to the delegation of certain legislative and administrative powers to the 47 counties7,8. For example, at the parliamentary level, matters related to the national level, such as foreign relations, immigration, and intellectual property, are assigned to the county level. For example, at the parliamentary level, powers are allocated for national issues such as foreign relations, immigration, and intellectual property, while at the county level, a wide range of powers are allocated, including agriculture, medical facilities and pharmacies at the county level, road transport at the county level, and markets and licensing (but excluding professional regulation) (see Article 186 of the Law and Constitutional List 4).

There is overlap between the two authorities in areas such as education, transportation, medical institutions, and energy regulation. However, this does not mean that decentralization is unrestricted. In case of conflict between the two, the law applies to the whole of Kenya and the national law prevails in certain cases, such as when counties are unable to implement or do not manage their finances according to the requirements of the law (Article 191). 

In the absence of an allocation, it is presumed that the national government will assume that role.9 If localities do not fulfill their role or do not manage their finances in accordance with the requirements set by the national government, the national government can get involved (Article 190 of the Law) and can suspend local authority in certain cases (Article 192 of the Law). Further important laws are slated for change as the Constitution is amended (Article 261 of the Law and Constitutional Inventory 5).

Investing locally

As mentioned above, it is expected that more localities will take measures to attract foreign investors in the future. The constitutional amendments are expected to bring about significant changes in important laws, and it is also expected that the existing laws will not be allowed to be relied upon. Although the Kenya Investment Authority (KIA) will play a one-stop role for foreign investment, it will be necessary to pay attention not only to the national policy but also to the county regulations regarding the management of the company after its establishment. It is expected that selecting a county that is more open to foreign investment will be more important than before the amendment. 

It should be noted that I am an expert of Japanese law and not a specialist in Kenyan law. We recommend that you consult with a lawyer or other expert in Kenya for further details.

Click here for part 3

See our Blog for more posts. 

Footnotes

1. The Maritime Offences Act of 1849, the Foreign Court Evidence Act of 1856, etc. are enumerated (but with modifications).

2. African customary law may apply to claims for land where customary tenure exists, marriage and divorce, seduction of unmarried women, seduction of married women, status of women and children, inheritance in the absence of a will, etc. (Magistrates’ Courts Act (Magistrates’ Act).

3. Kenya national integrated civic education, “Understanding the constitution of Kenya,” May 2012.12.

4. 350 members, 290 from constituencies, 47 women elected from each county, 12 representing specific interests such as youth, disabled and workers.

5. represent specific interests such as youth, disabled and workers (nominated by political parties).

6. Consists of 68 members, 47 elected from each county, 16 women to be appointed by the political parties, 2 to represent the youth, one male and one female, and 2 to represent the disabled.

7. supra note 11: p. 140.

8. Note 11 above: p. 134.

9. However, the Diet can stipulate any matter (Article 186 of the same law).

10. However, the Diet may prescribe any matter (Article 186 of the said Law).

11. Note 3 above: pp. 134 to 137.

 

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