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Court of AppealDismissedCourt of Appeal Civil Appeal (Nairobi)

Council of Governors & 5 others v Senate & another (Civil Appeal 204 of 2015) [2019] KECA 704 (KLR)

Court of Appeal of Kenya
7 June 2019
12,899 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~52 min to read original · ~4 min brief

The bottom line

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Kenya's Court of Appeal confirmed the Senate can summon governors over national funds, but cannot itself stop money flowing to counties.

What this practically means

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Executive summary

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This appeal, from a three-judge High Court bench, arose from summonses issued by the Senate Committee on Finance, Commerce and Economic Affairs to fifteen county governors following the Auditor General's report for the 2012/2013 financial year. Four governors refused to attend; the Senate resolved that the National Treasury stop transfers of funds and the Controller of Budget decline withdrawals for their counties. The governors petitioned the High Court, which upheld the Senate's power to summon governors and accounting officers but quashed the stoppage resolution for non-compliance with Article 225 of the Constitution and the Public Finance Management Act. Both sides appealed. The Court of Appeal dismissed the appeal and the cross-appeal except on one point. It held that the High Court had jurisdiction despite non-compliance with sections 12(1) and 13A of the Government Proceedings Act, and that parliamentary privilege did not oust judicial review where parliamentary action is unconstitutional. On the merits, the court held that oversight of county public finances operates at two levels: the Senate oversees national revenue allocated to counties under Article 96(3), while county assemblies oversee locally generated revenues and the county executive under Article 185(3). The governor, as chief executive accountable for county resources, is answerable to the Senate for national revenue allocated to counties, so the Senate was constitutionally empowered to summon him. However, the Senate had no power to direct stoppage of funds; that power lies with the Cabinet Secretary. The court also faulted the High Court for determining the unargued issue of the defunct local authorities' finances. Each party was ordered to bear its own costs.

Key legal issues

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01

Jurisdiction of the High Court notwithstanding non-compliance with the Government Proceedings Act

Holding

Failure to sue or be sued by the Attorney General under section 12(1) and failure to give 30-day notice under section 13A did not render the suit incompetent

Reasoning

Section 12(1) applied literally would create an absurdity under the 2010 Constitution, where national and county governments are distinct and the Attorney General could not represent both sides. On section 13A, the declaration of unconstitutionality by Majanja J in Kenya Bus Service had not been overturned on appeal and this Court, in Joseph Nyamamba, endorsed that reasoning, so no reason existed to depart from it.

p. 16
02

Parliamentary privilege and judicial review of parliamentary proceedings

Holding

Parliamentary privilege did not oust the court's jurisdiction to consider the constitutionality of the Senate's resolution

Reasoning

Relying on Doctors for Life International and the Supreme Court's decision in Speaker of the National Assembly vs Attorney General, the court held that where parliamentary proceedings violate the Constitution, courts will lift the veil of parliamentary privilege; a resolution with no basis in law is not immunised merely because it is a resolution rather than a decision.

p. 19
03

Whether the Senate can summon governors and accounting officers

Holding

Yes. Governors are accountable to the Senate for national revenue allocated to counties; the accounting officer is accountable to the county assembly but may appear before the Senate

Reasoning

Article 96(3) charges the Senate with oversight over national revenue allocated to counties; Article 179(4) makes the governor chief executive and section 30(3)(f) of the County Governments Act makes the governor accountable for county resources. Article 125 permits either House to summon any person. The accounting officer's accountability lies to the county assembly, but appearance before the Senate does not equate to accountability to it.

p. 28
04

Exclusive oversight over national revenue allocated to counties

Holding

The Senate's oversight is confined to national revenue allocated to counties; county assemblies oversee locally generated revenues and the county executive

Reasoning

Article 96(3) restricts the Senate's oversight to national resources allocated to counties and does not authorise oversight of other county resources. Article 185(3) vests county assemblies with oversight over the county executive, including locally generated revenues. The two oversight roles are separate, distinct and complementary under Article 6(2).

p. 24
05

Senate's power to stop transfer of funds to counties

Holding

The Senate has no such power; stoppage of funds is a matter for the Cabinet Secretary for Finance under Article 225 and section 96 of the Public Finance Management Act

Reasoning

The Senate resolution directing the National Treasury and Controller of Budget to stop transfers did not conform to Article 225 or sections 93 and 94 of the Public Finance Management Act, which vest stoppage powers in the Cabinet Secretary upon serious or persistent breach. The Senate overstepped and usurped the roles of the Cabinet Secretary and the Controller of Budget.

p. 19
06

Defunct local authorities' financial affairs

Holding

The High Court erred in determining an issue that was not properly before it

Reasoning

The pleadings did not competently raise the question of queries on the assets and liabilities of the defunct local authorities, and the parties did not canvass it in submissions, so it was not a matter for determination.

p. 29

Legal principles established

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  • The Senate may summon county governors to answer queries concerning national revenue allocated to counties, but any stoppage of funds to county governments lies with the Cabinet Secretary for Finance, not the Senate
  • Oversight of county public finances operates at two levels: the Senate over national revenue allocated to counties, and county assemblies over locally generated revenues
  • The Senate's oversight role under Article 96(3) cannot be equated to the accounting officer's role of rendering accounts
  • Courts may lift the veil of parliamentary privilege where parliamentary proceedings or decisions violate the Constitution

Court orders

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  1. 1.The appeal and the cross appeal are dismissed
  2. 2.Each party to bear their own costs
On appeal from
High Court of Kenya
Petition No. 14 of 2014
Jurisdiction invoked
First appeal to the Court of Appeal from a three-judge High Court bench, arising from the Senate's summons and resolution concerning county public finance management

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (1)

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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, "Council of Governors & 5 others v Senate & another (Civil Appeal 204 of 2015) [2019] KECA 704 (KLR)", Case Analysis (2019). Court of Appeal Civil Appeal (Nairobi). Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2019/704/eng@2019-06-07

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