Murang’a County Executive v Murang’a County Assembly & 5 others; Equity Bank Kenya Limited & 4 others (Interested parties) [2020] eKLR Case Summary

Court
High Court of Kenya at Muranga
Category
Civil
Judge(s)
Kanyi Kimondo
Judgment Date
October 28, 2020
Country
Kenya
Document Type
PDF
Number of Pages
3

Case Brief: Murang’a County Executive v Murang’a County Assembly & 5 others; Equity Bank Kenya Limited & 4 others (Interested parties) [2020] eKLR


1. Case Information:
- Name of the Case: Murang’a County Executive v. Murang’a County Assembly & 5 Others
- Case Number: Constitutional Petition No. 37 of 2019
- Court: High Court of Kenya at Murang’a
- Date Delivered: October 28, 2020
- Category of Law: Civil
- Judge(s): Kanyi Kimondo
- Country: Kenya

2. Questions Presented:
The central legal issues in this case involve whether Sidian Bank Limited should be enjoined as an interested party in the petition concerning the unauthorized borrowing of money by Murang’a Water & Sanitation Company Limited and Murang’a South Water & Sanitation Company Limited, without the approval of the Murang’a County Assembly, and whether such borrowing contravenes statutory limits and principles of public finance.

3. Facts of the Case:
The petitioner, Murang’a County Executive, filed a petition against the Murang’a County Assembly and several other respondents, including Murang’a Water & Sanitation Company Limited and Murang’a South Water & Sanitation Company Limited. Sidian Bank Limited sought to be included as an interested party, claiming that it had extended credit to the aforementioned companies, secured by their assets. The bank expressed concern that the petition's reliefs could invalidate their contracts or jeopardize the securities. The petitioner argued that the petition aimed to regulate the borrowing practices of public entities and that the bank's concerns were unfounded and intended to delay the proceedings.

4. Procedural History:
The case progressed through the High Court, where Sidian Bank Limited filed a motion to be enjoined as an interested party on February 14, 2020. The motion was contested by the petitioner, who provided a replying affidavit asserting that the petition focused on the legality of the borrowing practices of the respondents as public entities. The court considered the application, noting that the other respondents did not oppose enjoining Sidian Bank.

5. Analysis:
- Rules: The court referenced Rule 2 of the Constitution of Kenya (Protection of Rights and Fundamental Freedoms) Practice and Procedure Rules 2013, which allows for the enjoinment of interested parties who have an identifiable stake in the suit. Additionally, Article 159(2)(d) of the Constitution mandates the court to ensure substantial justice.

- Case Law: The court cited *Trusted Society of Human Rights Alliance v. Mumo Matemu & 5 Others, Supreme Court Petition No. 12 of 2013* and *Harit Sheth Advocate v. Shamas Charania, Nairobi, Civil Appeal 68 of 2008* to support the principle of allowing interested parties to join proceedings if they demonstrate a genuine stake. The court also referenced *Francis Karioko Muruatetu & another v. Republic & 5 others, Petition 15 & 16 of 2015* to clarify that an interested party should not introduce new issues.

- Application: The court found that Sidian Bank Limited demonstrated a valid concern regarding its financial interests tied to the borrowing practices of the respondents. The court concluded that the fears expressed by the bank were legitimate, especially given that the petition sought to declare the borrowing practices unlawful under sections 142 and 149 of the Public Finance Management Act (PEMA) and Article 201 of the Constitution.

6. Conclusion:
The court ruled in favor of enjoining Sidian Bank Limited as the 6th Interested Party in the petition, allowing it to file a response to the Notice of Motion and Petition. This decision underscores the importance of protecting the interests of financial institutions involved in public financing and the need for compliance with statutory borrowing limits.

7. Dissent:
There were no dissenting opinions noted in this ruling, as the decision appears to have been unanimous regarding the enjoinment of Sidian Bank Limited.

8. Summary:
The High Court of Kenya at Murang’a granted Sidian Bank Limited the status of an interested party in the ongoing constitutional petition concerning the legality of borrowing by public entities. This case highlights the intersection of public finance law and the rights of creditors, emphasizing the court's role in ensuring that financial agreements are not undermined by changes in public borrowing practices. The ruling may have broader implications for how public entities engage in financial obligations and the protection of creditor rights in similar contexts.

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