Kenya Deposit Insurance Corporation v Richardson & David Limited & 1 other
The bottom line
#Kenya's Court of Appeal restored the Central Bank and KDIC's power over a failed bank, holding courts cannot micromanage statutory bodies or strike down laws without hearing parties.
What this practically means
#Executive summary
#Key legal issues
#Validity of the High Court's suo motu declaration of unconstitutionality of section 46(1) of the KDI Act
The declaration was made in error: the motion contained no prayer for it and no party was heard on it. Constitutional adjudication is a matter of such importance that parties must be afforded the opportunity to address the court.
The court endorsed the principle that courts determine issues raised in the pleadings (Paul Gondi), subject to the Odd Jobs exception for unpleaded issues left to the court. Questions of constitutionality of a statute demand public interest considerations: the matter must be properly brought before the court, parties served and heard, and where the issue ensues from the pleadings the court must invite the parties' views before deciding.
Constitutionality of section 46(1) of the Kenya Deposit Insurance Act
Section 46(1) is not unconstitutional. It merely ousts the court's power to grant an injunction upon assumption of control by the receiver; it does not affect the litigant's right of access to the court for other matters or damages.
Parliament may lawfully curtail the court's power to grant particular relief. Where the court lacks jurisdiction to grant a remedy, the fundamental right of access to justice is not violated. Section 46(1)(a) bars challenge only to the assumption of control; management under receivership and suits for damages remain open. Under Articles 23(1) and 23(3)(d) the litigant's right is left intact; only the court's remedial power is limited.
Whether the High Court could suspend liquidation, revive receivership and direct consideration of capital-injection proposals
The court exceeded its jurisdiction by substituting itself for CBK and KDIC. The power to receive, liquidate and wind up an institution is vested in KDIC by section 5(1) of the KDI Act, and Parliament has not conferred such powers on the court.
The judge's orders—staying liquidation, re-instituting a lapsed receivership and directing CBK and KDIC to consider proposals—show the court took over the statutory roles of CBK and KDIC. There was no evidence that the statutory discretion had been improperly exercised. A court of law is not an expert in managing financial institutions and cannot do what it thinks the authority should have done.
Standard of judicial interference with statutory discretion
The Wednesbury standard applies: the court reviews only legality and reasonableness of the statutory body's decision, and cannot override the decision as an appellate authority.
Relying on Associated Provincial Picture Houses v Wednesbury Corporation, the court held that where Parliament entrusts discretion to a statutory body, that discretion is absolute within lawful limits; the court checks only that the body directed itself properly in law, considered relevant matters, excluded irrelevant ones, and did not reach a decision so unreasonable that no sensible authority could reach it.
Legal principles established
#- A court may not declare a statutory provision unconstitutional where no prayer for such declaration is made in the pleadings and where the parties have not been afforded an opportunity to address the court on the issue.
- A court may not, at an interlocutory stage, grant final orders that determine or render superfluous the suit, save in extremely rare circumstances.
- There is nothing unconstitutional in an Act of Parliament ousting or curtailing the court's jurisdiction; if the court has no jurisdiction to grant a remedy, the right of access to justice is not violated.
- A court may not substitute itself for, or micromanage, a statutory institution in the exercise of its statutory discretion; its role is to sanction what is done properly or invalidate what is done improperly.
- In reviewing decisions of public bodies, the court may only examine whether the body has acted unlawfully, taken into account irrelevant matters or disregarded relevant ones; it cannot interfere as an appellate authority over the decision itself (the Wednesbury standard).
Court orders
#- 1.Both appeals Nos. 66/2016 and 67/2016 allowed
- 2.The Ruling and orders of the High Court issued on 18th November 2015 in HCCC No. 482 of 2015 set aside
- 3.The 1st respondent's notice of motion dated 2nd October 2015 in HCCC No. 482 of 2015 dismissed with costs to CBK and KDIC
- 4.Costs in the appeals and in the High Court awarded to the appellants, CBK and KDIC
- On appeal from
- High Court of Kenya, Nairobi (Commercial and Admiralty Division)
- HCCC No. 482 of 2015
- Jurisdiction invoked
- First appeal against interlocutory orders of the High Court under the Court of Appeal's appellate jurisdiction; consolidation of appeals by consent order
Key timeline
#Practical implications
#Frequently asked questions
#Later judgments citing this (1)
#Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.
- Maanzoni Owners Association v Bramview Enterprises Limited & 5 others (Environment and Planning Petition E004 of 2025) [2026] KEELC 3160 (KLR)[2026] KEELC 3160 (KLR)19 May 2026applied
Cite this brief
#Cite this brief
Caselaw, "Kenya Deposit Insurance Corporation v Richardson & David Limited & 1 other", Case Analysis (2017). Civil Appeal No. 66 of 2016 (consolidated with Civil Appeal No. 67 of 2016). Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2015/4/eng@2015-12-15
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.