Cabinet Secretary for the National Treasury and Planning & another v Okoiti & 12 others (Civil Application E304 of 2023) [2023] KECA 1375 (KLR)
The bottom line
#Kenya's Court of Appeal lifted orders that had suspended the Finance Act 2023, meaning the government could resume collecting taxes while the main case continues.
What this practically means
#Executive summary
#Key legal issues
#Test for stay under Rule 5(2)(b) of the Court of Appeal Rules
Both twin principles - arguability and nugatory effect - must be demonstrated to the court's satisfaction; the jurisdiction is discretionary and guided by the interests of justice.
The court restated the settled principles: the applicant must show a bona fide arguable ground worth ventilation and that, absent stay, the appeal would be rendered nugatory. Both limbs must be satisfied. The court does not make definitive findings of fact or law that could embarrass the bench hearing the appeal. Arguability does not require the appeal to succeed, only that it is not frivolous; nugatory means reversible harm or harm damages cannot reasonably compensate.
Whether memorandum of appeal required
A Notice of Appeal filed under Rule 75 is sufficient to found an application under Rule 5(2)(b); no memorandum of appeal is required.
The first respondent argued the application was incompetent for want of a memorandum of appeal. The court rejected this, holding that it is sufficient to file a Notice of Appeal, which the applicants had done. The grounds of the intended appeal were adequately elaborated in the supporting affidavit.
Arguability of the intended appeal
The intended appeal was arguable on presumption of constitutionality, judicial overreach, separation of powers, and the propriety of suspending an entire Act when only some provisions were challenged.
The court found several contested issues requiring full evaluation: whether a presumed constitutional statute may be suspended before full hearing; whether the ruling violated separation of powers under Article 129; whether the entire Act could be suspended when only certain provisions were challenged; and allegations of judicial overreach in the conduct of proceedings. The Article 165(4) certification and public interest reinforced arguability.
Nugatory aspect and public interest
The appeal would be rendered nugatory absent stay, given serious irreversible economic consequences, and public interest favoured setting aside the conservatory orders.
The court noted the interdependence of the Finance and Appropriation Acts, the continuous revenue loss, and the absence of transition or saving provisions in the Act. It balanced the parties' competing public interest claims - irrecoverable government revenue versus irrecoverable tax borne by the public - and concluded that the trial judge, had she weighed the substantial and irreversible public interest, would have hesitated to suspend the whole Act. Damages would not compensate, and respondents showed no capacity to pay.
Legal principles established
#- An application under Rule 5(2)(b) does not require a memorandum of appeal; a Notice of Appeal under Rule 75 suffices.
- Under Rule 5(2)(b), a single bona fide arguable ground suffices, and the court makes no definitive findings of fact or law at that stage.
- The Finance Act and the Appropriation Act are interdependent, and courts may suspend specific provisions of a statute rather than the whole Act where some measures have irreversible, non-refundable effects.
Court orders
#- 1.The order made on 10th July 2023 suspending the Finance Act 2023, and the order prohibiting the implementation of the Finance Act 2023, lifted pending the hearing and determination of the appeal
- 2.The orders to apply mutatis mutandis in Civil Application No. E310/2023
- 3.Applicants to file the appeals within 14 days
- 4.Parties to file and serve submissions within 30 days
- 5.Both appeals to be heard and determined within 60 days from the date of the ruling
- 6.Costs to abide the outcome of the appeal
- On appeal from
- High Court of Kenya
- Jurisdiction invoked
- Article 164(3) of the Constitution and section 3(1) of the Appellate Jurisdiction Act; Rule 5(2)(b) of the Court of Appeal Rules
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.
Cite this brief
#Cite this brief
Caselaw, "Cabinet Secretary for the National Treasury and Planning & another v Okoiti & 12 others (Civil Application E304 of 2023) [2023] KECA 1375 (KLR)", Case Analysis (2023). Civil Application No. E305 of 2023 (with Civil Application No. E310 of 2023). Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2023/1375/eng@2023-07-28
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.