BY SAM ALFAN.
East African Development Bank (EADB) has suffered a major blow after High Court declared that section 2 (1) & (2) of the EADB Act, which grants the regional lender immunity from prosecution as unconstitutional.
The lender, which has been entangled in various legal dispute with former Cabinet Secretary Raphael Tuju was dealt the blow when High Court judge Francis Olel further declared the amendments made in 2013 as unconstitutional.
The court went ahead and directed Treasury Cabinet Secretary to produce records of all payments made from the Consolidated Fund to the regional lender, from 2014 to-date and the same be tabled in Parliament within 60 days from the date of the judgment.
The judge said the amendment to the EADB Act, as passed by Parliament in 2014 was un-procedural hence unconstitutional by lack of a proper public participation.
The judge further said that any private entity that receives public funds and other state resources is obliged to account for the utilization of the same to the public through appropriate legislation to be put in place by parliament.
“A declaration be and is hereby issued that Amendments effected to the the said East African Development Act CAP 493A, through clause 29/30 of the finance bill, 2013 as ratified by the National Assembly of Kenya on 25th September 2013, were un-procedurally enacted without regard to the Rule of law, and in a manner that offends Article 10 & 118 (1) (b) of the Constitution of Kenya 2010,” declared justice Olel in his decision.
In a 92 page decision, Justice Olel said to the extent that there are no checks and balance mechanisms placed under Section 2(1) and (2) of the EADB Act as to how Treasury CS accesses the consolidated fund to undertake his obligations to EADB, the same violates the principles enshrined in Articles 10, 95 (4) (b), 201, 206, 228(5) & and 232 of the Constitution.
The court said this was because the process of funding the regional lender lacked transparency, good governance, and accountability.
The judge sitting in Marsabit further declared that the rights of the petitioner Paul Lihanda Nusu were breached when the bank failed to supply him with the information he sought.
Lihanda had urged the court to declare that by providing immunity from judicial proceedings to the EADB, Article 44 of the EADB Charter contained in the schedule to the EADB Act, contravenes Articles 50 as read with Article 25 of the Constitution on the right to a fair trial and is therefore unconstitutional.
The petitioner also sought the High Court to intervene and declare that by providing immunity from judicial proceedings to the EADB, Article 44 of the EADB Charter contained in the schedule to the EADB Act, contravenes Article 48 of the Constitution on access to justice and is therefore unconstitutional.
“A declaration that by providing immunity from judicial proceedings to the EADB, Articles 44 and 51 of the EADB Charter contained in the schedule to the EADB Act contravenes Articles 1, 2, 10, 22, 23, 25, 48, & 50 of the Constitution and is therefore unconstitutional,” urged Lihanda.
Lihanda told the court that under Section 2(1) and (2) of the EADB Act, the government of Kenya was required to pay out of the consolidated fund or make all other payments required to be made from time to time under the terms of the treaty to EADB and the same was being effected without further appropriation other than as provided for under the said EADB Act.
This in effect, had bestowed on the CS Treasury the sole responsibility, without parliamentary oversight and accountability, to charge on and issue public debt out of the consolidated fund in breach of the clear principles of public finance and accountability.
He submitted that the CS Treasury could unilaterally withdraw money from the consolidated fund, without the oversight of the National Assembly, Senate or approval of the Auditor General, offended and ran contrary to provisions of Articles 95(4),(b) & (c), 201, 214 and 2016 of the constitution of Kenya 2010.
He urged the court to remedy this situation as this process clearly lacked transparency and accountability.
“It also offended the principles of good governance as enshrined under the constitution,” court heard.
He also contended that the EADB Act, Revised 2014, was passed by the National Assembly and Senate in an omnibus manner without reviewing the constitutionality of each provision of the Amended EADB Act, and thus ended up passing legislation that was manifestly unconstitutional.
He noted that there was a complete lack of Public participation in the process of amending the said Act, in line with Article 118(1) of the Constitution of Kenya 2010, which also reinforced his view that the whole Amended Act as passed was null and void ab initio.
