BY SAM ALFAN.
The Court of Appeal has temporarily suspended a decision of the High Court quashing the Credit Reference Bureau Regulations 2020.
The Banking CRB Regulations were quashed last year over failure to comply with Sec.11 of the Statutory Instruments Act on timelines.
Appellate Judges Asike Mukhandia, Mumbi Ngugi and Mwaniki Gachoka suspended the judgement after Central Bank of Kenya(CBK) argued that the general public would suffer irreparable harm as there were no regulations in place following the declaration.
The judges further said that if the High Court declaration remains in enforce, the appeal by CBK would be rendered nugatory in the event it succeeds.
“We accordingly allow the application and grant and order that the declaration issued by the High Court that the Banking (Credit Reference Bureau) Regulation 2020 are null and void for non-compliance with section 11 of the Statutory Instruments Act 2013 be and is hereby suspended pending hearing and determination of CBK’s appeal, ” ruled the three judges.
The CBK had submitted that there was no regulatory regime in place, as the earlier regulations enacted in 2013 were repealed by the 2020 regulations.
The Appellate Court noted that the decision threw the Credit Information Sharing Framework into total disarray.
Further, the nullification hindered CBK from performing its statutory role of regulating CRBs; and there was a lacuna in the law relating to credit sharing information submitted to CRBs.
According to the Bank regulator, Justice Mugure Thande erred in law and fact in failing to recognize and appreciate the constitutional architecture for parliamentary scrutiny of subsidiary legislation under Article 94(4) and (5) of the Constitution.
In the appeal, CBK argued that the failed to appreciate the pursuant to section 3(j) of statutory instruments Act, 2013 the committee on delegated Legislation had the discretion to regulate any delay in transmission of any delayed legislation to the clerk of the National Assembly for tabling before house.
And to appreciate that in exercise of its discretion under section 13(j) of the Statutory Instruments Act of 2013, the committee approved the CRB Regulations 2020, having been satisfied with the reasons for delay in transmission to the Clerk of the National Assembly were valid.
“The applicant contends that its appeal will be rendered nugatory as the entire credit information sharing framework has been thrown into total disarray and the applicant cannot enforce or implement the said Regulations,” CBK submitted .
CBK further argued that there was a lacuna in the law, particularly in respect of three areas, which necessitated the review of the CRB Regulations 2013 namely minimum threshold for negative credit sharing information submitted to Credit Reference Bureaus (“CRBs”) in Kenya; granting of CRB clearance to first time job applicants seeking employment in public and private entities and onboarding of other financial services sector players including SACCOs regulated by the Sacco Societies Regulatory Authority (SASRA) into the Credit Information Sharing framework.
CBK argued that Benjamin Bogongo will not suffer any prejudice should the orders sought be granted pending the hearing of the appeal, which the applicant has already filed.
Bogongo opposed CBK the application arguing that the intended appeal and the present application are frivolous and lacked merit.
He said he does not dispute that the CRB Regulations 2020 published on 8th April, 2020 were transmitted on 5th May, 2020 while they ought to have been transmitted by 14th April 2020, and the Covid 19 pandemic is an excuse for indolence.
“The applicant has failed to raise a single bona fide arguable point worth considering. That the intended appeal is not arguable; and that should the intended appeal succeed, it shall not be rendered nugatory as the dispute involves constitutional issues, which can be maintained or reversed depending on the outcome of the appeal,” he said.
