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Supreme CourtPartially AllowedPetition 1 of 2018

Institute for Social Accountability & another v National Assembly & 5 others

Supreme Court of Kenya
8 August 2022
Martha Karambu KoomeM.K KoomePhilomena Mbete MwiluP.M MwiluSmokin Charles WanjalaS.C WanjalaNjoki Susanna NdunguNjoki NdunguWilliam OukoW. Ouko
16,400 words in judgment
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AI-assisted case brief
·~66 min to read original · ~4 min brief

The bottom line

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Supreme Court declared CDF Act 2013 unconstitutional for violating devolution and separation of powers.

What this practically means

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The Supreme Court ruled that the Constituency Development Fund Act 2013 was unconstitutional. It created a parallel system of government at the constituency level, encroaching on county responsibilities. MPs cannot implement projects as that creates a conflict of interest. The Act's direct allocation of 2.5% of national revenue also violated the constitutional process for sharing revenue between national and county governments.

Executive summary

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The Supreme Court of Kenya allowed the appeal by the Institute for Social Accountability and the Centre for Enhancing Democracy and Good Governance, declaring the Constituency Development Fund Act, 2013 (CDF Act 2013) unconstitutional in its entirety. The Court reversed the Court of Appeal's judgment, which had only declared three sections of the Act unconstitutional, and restored the High Court's broader declaration of invalidity. The Court addressed seven issues. First, it held that the appeal before the Court of Appeal was not moot because the National Government Constituency Development Fund Act, 2015 (NGCDF Act 2015) re-enacted the same violative provisions, keeping the constitutional controversy alive. Second, the Court found the CDF Act 2013 unconstitutional for procedural lapses: the CDF (Amendment) Act, 2013 concerned county governments and should have been tabled before the Senate for consideration under Article 96 of the Constitution; the Speakers' concurrence under Article 110(3) did not oust the court's power to determine the true nature of the legislation. Third, the Court affirmed that Kenya is a unitary state with a devolved system of government, not a federal state, and the CDF Act did not offend this constitutional design. Fourth, the Court held that the CDF Act violated the division of functions between the national and county governments by creating a 'third' or 'parallel' level of government at the constituency level, which is an electoral unit, not a service delivery unit, thereby encroaching on county functions. Fifth, the Court found that section 4 of the CDF Act, which directly allocated 2.5% of national revenue to the Fund, violated Article 202(1) on the division of revenue, as revenue raised nationally must first be shared equitably between the two levels of government. Sixth, the Court held that the CDF Act violated the constitutional principles of public finance under Article 201(d) by creating confusion and potential duplication of projects, compromising prudent and responsible management of public funds. Seventh, the Court found that the CDF Act violated the principle of separation of powers by vesting service delivery (executive) functions in Members of the National Assembly, creating a conflict of interest that undermined their oversight role and the values of accountability and good governance. The Court adopted a two-pronged test for assessing separation of powers violations. The cross-appeal by the National Assembly was disallowed. Each party was ordered to bear its own costs, the matter being one of public interest.

Questions the Court framed

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The issues the Court set itself to decide, in its own words.

  1. 1.Whether the appeal before the Court of Appeal was moot
  2. 2.Whether the CDF Act 2013, as amended by the CDF (Amendment) Act, 2013 is unconstitutional on account of procedural lapses in the law-making process
  3. 3.Whether the CDF Act 2013 offends the constitutional design
  4. 4.Whether the CDF Act 2013 offends the division of functions between the national and county governments
  5. 5.Whether the CDF Act 2013 offends constitutional principles on the division of revenue
  6. 6.Whether the CDF Act 2013 offends constitutional principles on public finance
  7. 7.Whether the CDF (Amendment) Act, 2013 offends the principle of separation of powers

Key legal issues

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01

Whether the appeal before the Court of Appeal was moot due to the enactment of the NGCDF Act, 2015

Holding

The appeal was not moot because the NGCDF Act, 2015 did not unequivocally address the constitutional issues raised; the impugned provisions were re-enacted, keeping the controversy alive.

Reasoning

The Supreme Court applied the principle that a case is moot when an intervening change in law unequivocally addresses the concerns at the heart of the dispute. Here, the NGCDF Act, 2015 re-enacted the same violative provisions regarding the 2.5% allocation, the role of MPs, and the division of functions. Therefore, the live controversy persisted, and it was in the public interest to adjudicate the unresolved constitutional questions.

p. 23
02

Whether the CDF Act 2013 is unconstitutional for failure to involve the Senate in its enactment

Holding

The CDF (Amendment) Act, 2013 concerned county governments and should have been tabled before the Senate; failure to do so renders the CDF Act 2013 unconstitutional.

Reasoning

Applying a purposive interpretation, the amendment changed the constitutional basis of the Fund from Article 202(2) to Article 206(2), affecting the allocation of revenue to county governments. Since the Fund's projects (infrastructural development, poverty alleviation) overlap with county functions under the Fourth Schedule, the Bill concerned counties under Article 110(1). The Speakers' concurrence under Article 110(3) does not oust the court's power to determine the true nature of the legislation.

p. 24
03

Whether the CDF Act 2013 offends the division of functions between the national and county governments

Holding

The CDF Act 2013 violates the division of functions by creating a parallel structure at the constituency level that implements community-based projects assigned to county governments, thereby encroaching on their mandate.

Reasoning

The Constitution vests service delivery functions in county governments (Fourth Schedule) and the national executive. The constituency is an electoral unit, not a service delivery unit. The CDF Act's 'community-based' projects under sections 3 and 22 inevitably target county functions. This creates a 'third level' of government, violating Article 1(4) and 186(1). The Court of Appeal's view that this was an inter-governmental transfer was erroneous as no agreement under Article 187(1) existed.

p. 30
04

Whether the CDF Act 2013 offends the constitutional principle on the division of revenue

Holding

Section 4 of the CDF Act 2013, which directly allocates 2.5% of national revenue to the Fund, violates Article 202(1) by disrupting the equitable sharing of revenue between the national and county governments.

Reasoning

Article 202(1) requires that 'revenue raised nationally' be shared equitably between the two levels of government. This revenue is not available to the national government until after the Division of Revenue Act allocates the equitable share. Allowing a 'third' entity like the CDF to participate in this vertical division before the national government receives its share violates both Article 202(1) and Article 218(1)(a). Any allocation to the CDF must come from the national government's share as a grant, not directly from the national revenue.

p. 31
05

Whether the CDF Act 2013 offends the constitutional principle of separation of powers

Holding

The CDF Act 2013 violates the separation of powers by vesting service delivery (executive) functions in Members of the National Assembly, creating a conflict of interest and undermining their oversight role.

Reasoning

Applying the two-pronged test: (1) The Act gives MPs control over the Constituency Development Fund Committee, which initiates, prioritizes, and implements projects—functions within the nucleus of the Executive branch. (2) This creates a conflict of interest as MPs have a personal stake in the Fund's success, compromising their constitutional oversight role and violating the values of accountability and good governance under Article 10(2)(c). The court held that legislators must not be involved in any service-based mandate to preserve their oversight function.

p. 37

Legal principles established

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  • A bill affecting county governments must be tabled in the Senate; Speakers' concurrence does not prevent court review.
  • The constituency is an electoral unit, not a service delivery unit; creating a parallel level of government violates the Constitution.
  • Direct allocation of a fixed percentage of national revenue to a fund violates equitable sharing between national and county governments.
  • Public funds must be managed prudently; a fund that duplicates county functions violates this principle.
  • The test for separation of powers violation: whether the mandate strays into another branch's core functions and harms accountability.
  • Legislators must not be involved in implementing service mandates; that is an executive function and creates conflict of interest.

Court orders

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  1. 1.The appeal dated December 29, 2017 is allowed.
  2. 2.The cross-appeal dated November 6, 2019 is disallowed.
  3. 3.A declaration is hereby made that the Constituency Development Fund Act, 2013 is unconstitutional.
  4. 4.Each party to bear their own costs.

The bench

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One judgment of the whole court — no separate or dissenting opinions.

Martha Karambu Koome
M.K KoomeCJ
Currently serving
majority

Wrote the judgment

Philomena Mbete Mwilu
P.M MwiluDCJ
Currently serving
majority
Smokin Charles Wanjala
S.C WanjalaSCJ
Currently serving
majority
Njoki Susanna Ndungu
Njoki NdunguSCJ
Currently serving
majority
William Ouko
W. OukoSCJ
Currently serving
majority
On appeal from
Court of Appeal at Nairobi
Civil Appeal No 92 of 2015 (Consolidated with Civil Appeal No 97 of 2015)
Jurisdiction invoked
Article 163(4)(a) of the Constitution

Relief refused

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Cross-appeal by the 1st respondent seeking to overturn the declaration that sections 24(3)(c) and (f) and 37(1)(a) of the CDF Act 2013 are unconstitutional

The Supreme Court found the entire CDF Act 2013 unconstitutional, including those sections, and upheld the High Court's broader declaration.

p. 38

Costs

Each party to bear their own costs.

Quotable passages

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Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.

A declaration is hereby made that the Constituency Development Fund Act, 2013 is unconstitutional.
p. 39 Final orders - declaration of unconstitutionality
Each party to bear their own costs.
p. 9 Costs order in public interest litigation
Therefore, we see a 'third' or 'parallel' structure of government as altering the basic premises of the system of government created by the Constitution and as distorting the devolved structure of government.
p. 30 Division of functions - no third level of government
To allow an agency of the national government or a 'third' structure whose location within the constitutional system is unclear to participate in the sharing of the 'revenue raised nationally' is a clear case of violation of not only article 202(1) but also article 218(1)(a) of the Constitution.
p. 31 Division of revenue - violation of Article 202(1)
Members of legislative bodies, being Members of the National Assembly, Senators, County Women Representatives, and Members of County Assemblies ought not to be involved in the implementation of any service- based mandates which are a preserve of the Executive branch.
p. 37 Separation of powers - legislators cannot implement executive functions
We now adopt a two-pronged test to be used in assessing whether a particular allocation of mandate, function, or power to a public agency or institution amounts to an unconstitutional intrusion that threatens or violates the separation of powers.
p. 35 Test for separation of powers violation

Key timeline

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2013
CDF Act 2013 enacted.
2015
NGCDF Act 2015 enacted but did not resolve constitutional issues.
2017-12-29
Appeal filed at the Supreme Court.
2022
Supreme Court declares CDF Act 2013 unconstitutional.

Practical implications

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For lawyers

New test for separation of powers

The Supreme Court adopted a two-pronged test for assessing whether a legislative mandate violates separation of powers: (a) whether it strays into the core functions of another branch, and (b) whether it harms national values like accountability. This test can be applied in future constitutional challenges to legislative mandates.

For businesses

Impact on CDF-funded contracts

Businesses with contracts funded by the Constituency Development Fund should be aware that the legal basis for the Fund has been declared unconstitutional. The judgment may not automatically void existing contracts; legal advice is needed on the status of ongoing projects and future funding.

For individuals

Holding MPs accountable for projects

The Court ruled that MPs should not be involved in implementing projects. This means you can challenge any project where your MP is directly involved in implementation, as it creates a conflict of interest. Citizens can demand that county governments handle service delivery, not constituency offices.

Frequently asked questions

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Is the Constituency Development Fund (CDF) in Kenya unconstitutional?+

Yes, the Supreme Court declared the CDF Act 2013 unconstitutional in 2022 for violating devolution and separation of powers.

Can MPs still implement projects in their constituencies in Kenya?+

No, the Court ruled that MPs should not be involved in implementing service-based projects; that is an executive function.

What happens to ongoing CDF projects in Kenya after the Supreme Court ruling?+

The ruling declared the Act unconstitutional, but the Court did not give specific transitional orders. Affected parties should seek legal advice on the status of existing projects.

Why did the Supreme Court rule that the CDF Act violated the Constitution?+

The Court found that the Act created a parallel level of government at the constituency level, encroached on county functions, and allowed MPs to implement projects, creating a conflict of interest.

Later judgments citing this (17)

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Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.

Cite this brief

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Cite this brief

Caselaw, "Institute for Social Accountability & another v National Assembly & 5 others", Case Analysis (2022). Petition 1 of 2018. Source: https://new.kenyalaw.orghttps://new.kenyalaw.org/akn/ke/judgment/kesc/2022/39/eng@2022-08-08

Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.