Court of appeal ruling on CRB regulation 2020 that was declared null and void

Court of appeal ruling on CRB regulation 2020 that was declared null and void

On August 28, 2023, the high court declared (Credit Reference Bureau) Regulations 2020 null and void for no compliance with sec 11 of the Statutory Instruments Act. However, the Court of Appeal has ruled in favor of CBK request by suspending the high court ruling pending hearing and determination of the case at the Nairobi Civil Appeal No. E782 of 2023. Below is a section of the ruling.

Credit Reference Bureau Regulations 2020 Court of appeal ruling

16. In its decision, the trial court found that it was within the applicant's mandate to formulate and publish the CRB Regulations 2020. While it found no violation of the 1st respondent's constitutional rights as alleged in the Petition before it, the trial court nonetheless declared the CRB Regulations 2020 null and void for non-compliance with section Page 9 of 12 11 of the Statutory Instruments Act with respect to timeliness.

Whether it ought to have made its decision on this basis, an argument, according to the applicant, that had not been pleaded, (though the 1st respondent asserts that he had pleaded it) is one of the matters to be considered on appeal.

17. The effect of the trial court's decision, however, is that there are now no Regulations in force relating to CRBs. As conceded by the 1st respondent, upon the enactment of the CRB Regulations 2020, the 2013 Regulations were repealed. A declaration of invalidity of the CRB Regulations 2020 meant therefore that there was no longer a regulatory regime in place, as recourse cannot be had to the repealed statutory instrument. The decision of the trial court, as argued by the applicant, therefore threw the Credit Information Sharing Framework into total disarray; the applicant cannot perform its statutory role of regulating CRBs; and there is thus a lacuna in the law relating to credit sharing information submitted to Credit Reference Bureaus in Kenya, among other public functions. In the circumstances, we find that the applicant has satisfied the second limb under rule 5(2)(b)...

18. 18. In Schachter v. Canada Lamer [1992] 2 S.C.R. 679, it was held that a court may strike down legislation or a legislative provision but suspend the effect of that declaration until Parliament has had an opportunity to fill the void; and that such an approach is clearly appropriate where the striking down of a provision poses a potential danger to the public or otherwise threatens the rule of law. See also National Assembly of Kenya v Kina & another (supra). 

19. Having considered the facts of this case and the respective submissions of the parties, as well as the jurisprudence on the exercise of jurisdiction under rule 5(2)(b), we are satisfied that the application dated 28th September, 2023 is merited. The REPUBLIC applicant and the general public would suffer irreparable harm in light of the lacuna that has been left by the impugned declaration, and the applicant's appeal, which has already been filed, would be rendered nugatory in the event that it succeeds 

20. We accordingly allow the application and grant an order that the declaration issued by the High Court that the Banking (Credit Page 11 of 12 Reference Bureau) Regulations 2020 are null and void for non-compliance with section 11 of the Statutory Instruments Act 2013 be and is hereby suspended pending the hearing and determination of the applicant's appeal, Nairobi Civil Appeal No. E782 of 2023.

21. The costs of the application shall abide the outcome of the appeal.

Dated and delivered at Nairobi this 9th day of February, 2024.

You might be interested in reading the (Credit Reference Bureau) Regulations 2020

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