The Supreme Court on Friday upheld a ruling by the Appellate Court declaring the SACCO Societies (Amendment) Act unconstitutional.
In a ruling delivered by Chief Justice Martha Koome, the Supreme Court found that the Act affected the functions and powers of counties and, as a result, ought to have been considered by the Senate. The court therefore ruled that its enactment without Senate participation was unconstitutional.
“Consequently, we uphold the determination by the Court of Appeal that the Senate ought to have been involved in the consideration and enactment of the SACCO Societies (Amendment) Act No. 16 of 2018,” read part of the ruling by Koome.
The SACCO Societies (Amendment) Act focused on the regulation, licensing, and supervision of Sacco societies in Kenya. The amendment introduced changes to enhance governance, streamline operations, and align the Act with evolving financial and cooperative sector needs.
Some of the key aspects of the amendments included adjustments to licensing requirements for SACCO societies, enhancing oversight and regulatory powers for the Sacco Societies Regulatory Authority (SASRA), and provisions to address insider lending and governance issues within SACCO societies.
Although the court declared the Act unconstitutional, it suspended the declaration of invalidity for 18 months from March 21. The court delayed annulling it to allow time for the issue to be addressed.
The ruling now means that SACCOs will be operating under some level of uncertainty in their regulatory environment. With the suspension of the Act’s invalidity for 18 months, Saccos might function under unclear transitional regulations, potentially causing confusion.
Following the suspension, Parliament has a window of time to address the constitutional concerns raised by the court. To rectify the issues highlighted, Parliament may re-submit the Bill to the Senate for consideration and enactment if it wishes for the law to remain in effect after the suspension period.
The Supreme Court also issued rulings on the Equalisation Fund Appropriation Act and amendments made to Sections 3 and 4 of the KEMSA Act by the Health Laws (Amendment) Act, declaring them all unconstitutional.
According to Koome, the National Assembly was wrong to enact both Acts without involving the Senate.
“Therefore, the action of excluding the Senate from the enactment of the Equalisation Fund Appropriation Act, No. 3 of 2018, and KEMSA Act by the Health Laws (Amendment) Act was unconstitutional,” part of the ruling read.
The ruling was also jointly made by Deputy Chief Justice Philomena Mbete Mwilu, and Justices Mohammed Khadhar Ibrahim, Njoki Ndung’u, Smokin Wanjala, Isaac Lenaola, and William Ouko on Friday, 21 March.
Source: kENYANS.CO.KE