In the Matter of Council of Governors & 47 others (Reference 3 of 2019) (Advisory Opinion)
The bottom line
#CRA revenue recommendations not binding on Parliament, but must be seriously considered.
What this practically means
#The Supreme Court ruled that the Commission on Revenue Allocation's recommendations are advisory, not mandatory. Parliament must still consider them seriously before voting. If the National Assembly and Senate deadlock over the Division of Revenue Bill, the National Assembly can authorize county funding using 50% of the previous year's allocation (or at least 15% of national revenue). The Court cannot set timelines for fund transfers, and the Appropriation Act cannot be passed before the Division of Revenue Act.
Executive summary
#Questions the Court framed
#The issues the Court set itself to decide, in its own words.
- 1.Whether the recommendations by the Commission on Revenue Allocation are binding upon both Houses during deliberations concerning the Division of Revenue Bill and the Appropriation Bill
- 2.What happens when the National Assembly and the Senate fail to agree on a Division of Revenue Bill, thereby triggering an impasse?
- 3.Whether there should be timelines within which the National Government should release the equitable share of revenue to County Governments
- 4.Whether the National Assembly can enact an Appropriation Act prior to the enactment of a Division of Revenue Act
Key legal issues
#Whether the recommendations of the Commission on Revenue Allocation are binding on Parliament
The recommendations are not binding, but they must be accorded serious consideration and cannot be ignored or casually dealt with.
The court examined the literal meaning of 'recommendation' and the constitutional provisions. Article 218(2) explicitly permits deviation from CRA recommendations, requiring only a memorandum explaining significant deviations. The court held that making the recommendations binding would supplant Parliament's legislative authority. However, as a Chapter Fifteen Commission, its recommendations are not mere suggestions; they must be considered before voting, and failure to consider them would render legislation unconstitutional.
What happens when the National Assembly and the Senate fail to agree on a Division of Revenue Bill, triggering an impasse
The National Assembly shall authorize withdrawal from the Consolidated Fund for county services, based on 50% of the preceding year's equitable allocation, or not less than 15% of all revenue collected nationally, pending resolution of the impasse.
The court rejected the proposal to refer the matter to the High Court as it would defeat the non-binding nature of CRA recommendations and breach separation of powers. It also rejected using the previous year's Act as a fallback without constitutional basis. Instead, drawing analogy from Article 222 (which provides for interim funding for national government), the court fashioned a solution: the National Assembly may authorize withdrawal of up to 50% of the preceding year's equitable share, or not less than 15% of all national revenue, to ensure continuity of county services. The court urged Parliament to enact legislation to give normative form to this arrangement.
Whether there should be set timelines for the National Government to release equitable share of revenue to counties
The court is not the appropriate forum to set precise timelines; the constitutional standard of 'without undue delay' must be assessed on a case-by-case basis.
The court noted that Article 219 deliberately does not prescribe a specific timeline, allowing flexibility for the National Treasury. While counties operate within rigid budgetary cycles and delays must be justifiable, setting precise timelines is a legislative or executive function, not a judicial one. The court declined to adopt the 14-day timeline proposed by the applicants.
Whether the National Assembly can enact an Appropriation Act before the Division of Revenue Act
The National Assembly cannot enact an Appropriation Act before the Division of Revenue Act.
The court analyzed the sequencing of the budget process under Articles 218 and 221. The Division of Revenue Bill must be introduced first, as it determines the national government's share of revenue. The estimates of revenue and expenditure, which form the basis of the Appropriation Bill, must logically be based on the Division of Revenue Act. Section 39 of the Public Finance Management Act confirms this sequence. The court held that an Appropriation Act enacted before the Division of Revenue Act would be of doubtful constitutional validity, though this determination was prospective only.
Legal principles established
#- CRA recommendations are not binding on Parliament but must be seriously considered, not ignored.
- During a Division of Revenue Bill impasse, counties can get 50% of the prior year's equitable share or at least 15% of total national revenue.
- The Appropriation Act cannot be enacted before the Division of Revenue Act.
- An advisory opinion under Article 163(6) has the same binding effect as a judgment in rem.
- Courts cannot set precise timelines for transfer of equitable share to counties; 'without undue delay' is assessed case-by-case.
Court orders
#- 1.The recommendations of the Commission on Revenue Allocation are not binding on Parliament
- 2.In the event of an Impasse over the Division of Revenue Bill, the solution prescribed in paragraphs 81 to 91 of this Opinion shall apply
- 3.The Supreme Court or any other court for that matter, is not the appropriate forum for setting timelines as to when the National Treasury must transfer the equitable share of revenue to counties
- 4.Parliament could not enact the Appropriation Act before the enactment of the Division of Revenue Act
The bench
#Judges wrote separately. A dissent does not bind; a concurrence may narrow the ratio.
Wrote the judgment
The Chief Justice wrote a separate concurring opinion emphasizing the historical context of devolution, the need for a purposive and holistic interpretation of the Constitution, and reaffirming the Senate's role in the Division of Revenue Bill. He stressed that court decisions must be obeyed by all State organs.
I have had the advantage of reading in draft the majority Judgment in this Reference. While I entirely concur with it, I would like to make some observations of my own.p. 34
Wrote the judgment
Justice Ndungu dissented on two issues: (1) she would have departed from the 2013 Senate decision, holding that the Division of Revenue Bill is a money bill originating in the National Assembly with the Senate having a limited role; (2) she disagreed with the majority's solution for an impasse, arguing it breached the separation of powers and that the proper solution was for Parliament to legislate or amend the Constitution. She concurred on the non-binding nature of CRA recommendations and that courts should not set timelines for fund releases.
I however find that I am unable to agree with the reasoning and the consequential conclusion of the majority of the Court on the two other issues for the reasons stated below.p. 43
- Jurisdiction invoked
- Article 163(6) of the Constitution
Relief refused
#Declaration that CRA recommendations are binding on Parliament
The court held that the recommendations are not binding, though they must be accorded serious consideration.
Order setting precise timelines for release of funds to counties
The court held it is not the appropriate forum to set such timelines.
Invitation to depart from the 2013 Senate decision
The court declined because the request was made perfunctorily without a formal application and without giving other parties an opportunity to respond.
Costs
No order as to costs was made in the judgment.
Quotable passages
#Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.
it is our considered opinion that the recommendations by the Commission on Revenue Allocation are not binding upon either the National Assembly, or the Senate. What the two Houses cannot do however is to ignore or casually deal with such recommendations.
in the event of an impasse, the percentage of the money to be withdrawn be based on the equitable allocation to Counties in the Division of Revenue Act of the preceding financial year. In keeping with the spirit of article 222 (2) (b) of Constitution, the money to be withdrawn shall be 50% of the total equitable share allocated to the Counties in the Division of Revenue Act.
We don't think that this court is the appropriate forum to determine with precision, when monies due to counties, should be actually transferred.
this Advisory Opinion is not a 'mere advice or opinion'. On the contrary, it has the same binding effect as a Judgment in rem of this court.
the recommendations of the Commission on Revenue Allocation are not binding on Parliament; in the event of an Impasse over the Division of Revenue Bill, the solution prescribed in paragraphs 81 to 91 of this Opinion shall apply; the Supreme Court or any other court for that matter, is not the appropriate forum for setting timelines as to when the National Treasury must transfer the equitable share of revenue to counties; and Parliament cannot enact the Appropriation Act before the enactment of the Division of Revenue Act.
Key timeline
#Practical implications
#Advisory opinions are binding judgments
This ruling confirms that Supreme Court advisory opinions under Article 163(6) have the same force as a judgment in rem. Counsel should treat them as binding precedent, not mere advice. When advising Parliament or county governments on revenue allocation, cite this case for the non-binding but serious-consideration standard for CRA recommendations.
County funding continuity during impasse
Businesses contracting with county governments should note that the Supreme Court created a fallback funding mechanism if Parliament deadlocks on the Division of Revenue Bill. This reduces the risk of abrupt county service stoppages. However, the 50% cap may still cause delays or reduced payments; monitor impasse situations closely.
County services protected during budget fights
Citizens benefit from the Court's ruling that county funding cannot stop entirely during a parliamentary deadlock. The National Assembly must authorize at least 50% of the previous year's equitable share or 15% of national revenue. This ensures basic county services like health and roads continue even when the Senate and National Assembly disagree.
Frequently asked questions
#Are CRA recommendations binding on Parliament in Kenya?+
No, the Supreme Court ruled that recommendations from the Commission on Revenue Allocation are not binding on the National Assembly or Senate. However, Parliament must give them serious consideration and cannot ignore or casually dismiss them.
What happens if Kenya's National Assembly and Senate disagree on the Division of Revenue Bill?+
During an impasse, the National Assembly can authorize withdrawal from the Consolidated Fund for county services. The amount is 50% of the equitable share from the previous year's Division of Revenue Act, or not less than 15% of all revenue collected nationally.
Can the Appropriation Act be passed before the Division of Revenue Act in Kenya?+
No, the Supreme Court held that the Appropriation Act cannot be enacted before the Division of Revenue Act. The Division of Revenue Bill must be passed first because it determines the national government's share of revenue, which forms the basis of the budget estimates.
Can the Supreme Court set timelines for county fund transfers in Kenya?+
No, the Court ruled that it is not the appropriate forum to set precise timelines for the National Treasury to transfer equitable share to counties. The constitutional standard of 'without undue delay' must be assessed on a case-by-case basis.
Later judgments citing this (8)
#Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.
- Mutungi v Mutungi & 5 others (Environment and Land Case E002 of 2026) (Environment and Land) [2026] KEELC 3748 (KLR)[2026] KEELC 3748 (KLR)18 Jun 2026
- Republic v Obado & 17 others (Anti-Corruption and Economic Crimes Case E018 of 2020) [2026] KEMC 96 (KLR)[2026] KEMC 96 (KLR)15 May 2026
- Parliament of Kenya & another v Okoiti & 2 others[2026] KESC 28 (KLR)31 Mar 2026followed
- In re Commission on Administrative Justice (Applicant) (Advisory Opinion Reference E001 of 2025)[2026] KESC 21 (KLR)20 Feb 2026followed
- Senate & 3 others v Speaker of the National Assembly & 10 others[2025] KESC 49 (KLR)15 Aug 2025
- Judicial Service Commission & another v LMN[2025] KESC 53 (KLR)15 Aug 2025
- National Hospital Insurance Fund Management Board v Kenya Union of Commercial Food and Allied Workers & another; Attorney General (Interested Party)[2025] KESC 37 (KLR)30 May 2025distinguished
- Senate & 3 others v Speaker of the National Assembly & 10 others[2025] KESC 11 (KLR)21 Mar 2025
Cite this brief
#Cite this brief
Caselaw, "In the Matter of Council of Governors & 47 others (Reference 3 of 2019) (Advisory Opinion)", Case Analysis (2020). Reference 3 of 2019. Source: https://new.kenyalaw.orghttps://new.kenyalaw.org/akn/ke/judgment/kesc/2020/65/eng@2020-05-15
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.