Capital Markets Authority v Ogundo & 2 others (Civil Appeal 131 & 132 of 2018 (Consolidated)) [2023] KECA 1175 (KLR)
The bottom line
#Kenya's Court of Appeal ruled that capital markets regulator show-cause proceedings are administrative, not criminal, and companies facing them must first engage the regulator's process before rushing to court.
What this practically means
#Executive summary
#Key legal issues
#Nature of the NTSC proceedings
The show cause proceedings were administrative, not criminal or quasi-criminal.
The court held that securities regulators are administrative tribunals performing multiple functions with permitted overlap of roles that would be kept separate in ordinary judicial proceedings. The right to be heard under section 26(8) of the Act does not convert administrative proceedings into criminal ones. The trial judge's use of criminal terminology such as charge, offence and conviction betrayed an erroneous classification.
Scope of judicial review
The trial court erred by weighing the sufficiency of the evidence underlying the NTSC, which is an appellate, not a review, function.
Judicial review concerns the manner in which a decision was made, not its merits. The learned Judge's value judgments about the evidence and charges went beyond process and usurped the role of the decision-maker. A tribunal has jurisdiction to err on the merits and such error is a ground for appeal, not for quashing by way of judicial review.
Fair administrative action
The respondents were accorded fair administrative action under article 47(1) and section 4 of the Fair Administrative Actions Act.
The respondents received the NTSC with the allegations, knew the likely consequences, and could be heard. James and Barth appeared before the committee with counsel, made oral and written submissions; Joyce raised preliminary objections but prematurely moved to court, squandering her chance to be heard. The element of expedition under article 47(1) was also satisfied.
Legal principles established
#- A regulatory authority's notice to show cause proceedings of an administrative nature are not criminal or quasi-criminal proceedings, and courts on judicial review must not delve into the merits of the administrative decision as if on appeal.
- Administrative tribunals and regulators may discharge overlapping investigative, adjudicative and enforcement functions without fragmentation, provided they afford fair administrative action under article 47.
Court orders
#- 1.Allowed the consolidated appeals (Civil Appeal Nos. 131 & 132 of 2018)
- 2.Set aside the respective judgments of the High Court
- 3.Set aside the orders of certiorari quashing the NTSC letters issued by the appellant
- 4.Declared the appellant at liberty to continue with the administrative proceedings commenced against the respondents
- 5.Awarded the appellant the costs of the applications before the High Court and the costs of the appeal
- On appeal from
- High Court of Kenya at Nairobi
- Judicial Review Misc. Application Nos. 606 & 607 of 2016
- Jurisdiction invoked
- First appeal under the Court of Appeal Rules (rule 31); appeals from High Court judicial review judgments
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Capital Markets Authority v Ogundo & 2 others (Civil Appeal 131 & 132 of 2018 (Consolidated)) [2023] KECA 1175 (KLR)", Case Analysis (2023). Civil Appeal Nos. 131 & 132 of 2018 (consolidated). Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2023/1175/eng@2023-10-06
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.