Kenya Bankers Association v Attorney General & 2 others (Petition E007 of 1000) [2026] KEHC 12973 (KLR) (Commercial and Tax) (13 August 2026) (Ruling)

Kenya Bankers Association v Attorney General & 2 others (Petition E007 of 1000) [2026] KEHC 12973 (KLR) (Commercial and Tax) (13 August 2026) (Ruling) Neutral citation: [2026] KEHC 12973 (KLR) Republic of Kenya In the High Court at Nairobi (Milimani Commercial Courts) Commercial and Tax Petition E007 of 1000 PM Mulwa, J August 13, 2026 IN THE MATTER OF VIOLATION OF ARTICES 231(2) AND (3) OF THE CONSTITUTION OF KENYA 2010 Between Kenya Bankers Association Petitioner and The Attorney General 1st Respondent Cabinet Secretary for the National Treasury and Economic Planning 2nd Respondent and The Central Bank of Kenya Interested Party Ruling 1.The Petitioner, Kenya Bankers Association, moved the Court by a Notice of Motion dated 28th January 2026 brought pursuant to Rule 19, 23 and 24(1) of the Constitution of Kenya (Protection of Rights and Fundamental Freedoms) Practice and Procedure Rules and the inherent powers of the court, seeking a conservatory orders staying the implementation and operation of Section 44 of the Banking Act pending the hearing of both the application and its intended appeal against the judgment delivered on 11th December 2025. 2.The application is supported by the affidavit of Raymond Molenje, the Chief Executive Officer of the Petitioner. He contends that the appeal raises arguable constitutional issues with reasonable prospects of success, and that unless a conservatory order is issued, the Petitioner will suffer prejudice being compelled to comply with a statutory provision whose constitutionality is challenged, thus rendering the appeal nugatory. Background 3.By its judgment delivered on 11th December 2025, this Court held that Section 44 of the Banking Act is not inconsistent with Article 231 (2) and (3) of the Constitution. The Petitioner was aggrieved by the judgment and has since lodged a Notice of Appeal on 18th December 2025 and filed the present application on 28th January 2026. 4.The petitioner filed written submissions, which I have considered, the Respondents did not file any response or submissions to the application Analysis and Determination 5.Article 23 of the Constitution has conferred upon this Court the authority to uphold and enforce the Bill of Rights and provide remedies as follows:1.The High Court has jurisdiction, in accordance with Article 165, to hear and determine applications for redress of a denial, violation or infringement of, or threat to, a right or fundamental freedom in the Bill of Rights.2.… 3.In any proceedings brought under Article 22, a court may grant appropriate relief, including:a.a declaration of rights;b.an injunction;c.a conservatory order;d.a declaration of invalidity of any law that denies, violates, infringes, or threatens a right or fundamental freedom in the Bill of Rights and is not justified under Article 24;e.an order for compensation; andf.an order of judicial review. 6.A conservatory order is a legal remedy available to a party who can demonstrate denial, violation, infringement, or threat to a right or fundamental freedom protected by the Bill of Rights. Its main purpose is to safeguard the core aspects of the petition while awaiting the court's hearing and decision. According to Rule 23 of the Mutunga Rules, regardless of any other provisions, the judge hearing the petition must also hear and decide on applications for conservatory or interim orders. 7.The Supreme Court in Gatirau Peter Munya vs Dicksons Mwenda Kithinji & 2 others (2014) eKLR established the threshold of a conservatory order into 3 limbs as follows:“A party seeking conservatory orders must demonstrate to the Court that first, the petition is arguable and not frivolous. Second, that unless the orders sought are granted, the suit, were it to succeed, would be rendered nugatory. The first 2 limbs though linked to injunctions in private party matters, are also applicable in public law. The Supreme Court added the third test in the context of the Constitution, namely, that it is in the public interest that the orders sought are granted.” 8.Regarding the arguable case, the Petitioner argues that this court’s interpretation of Article 231(2) and (3) of the Constitution, in relation to Section 44 of the Banking Act, is contestable. An appeal deemed arguable does not necessarily have to succeed; it simply presents a legal issue worthy of appellate review. The legal question concerning the constitutional relationship between the Central Bank of Kenya's responsibilities under Article 231 and the Cabinet Secretary's role under Section 44 of the Banking Act is a genuine legal matter deserving thorough appellate consideration. 9.Under the second principle on prejudice and nugatoriness, Section 44 of the Banking Act bars commercial banks from changing loan interest rates without prior approval from the executive. If no stay is granted and banks must follow Section 44 while an appeal is pending, any later appellate decision that finds the section unconstitutional could cause significant and lasting disruption in the banking industry, along with widespread litigation over past interest charges. These issues and losses cannot be easily fixed with damages, making the appeal mostly futile. 10.On the last limb on public interest, maintaining the regulatory status quo that existed during the trial proceedings ensures stability in the financial sector while the Court of Appeal resolves the dispute. Furthermore, the Respondents did not file any response or submissions to oppose the application, leaving the Petitioner's factual assertions uncontroverted. I’m inclined to grant an order of stay for a limited period. 11.In the premises, I find that the Petitioner's application dated 28th January 2026 is merited and I make the following orders:i.A Conservatory Order is hereby issued staying the implementation and/or operation of Section 44 of the Banking Act, insofar as it restricts financial institutions from increasing the rate of interest to be charged on loans without the prior approval of the Cabinet Secretary responsible for matters relating to finance, until further orders of the Court of Appeal.ii.The costs of this application shall be in the cause. RULING DELIVERED VIRTUALLY, DATED AND SIGNED AT NAIROBI THIS 13TH DAY OF AUGUST 2026.PETER M. MULWAJUDGEIn the presence of:Mr. Lawson Ondieki & Mr. Brian Mosobera for PetitionerCourt Assistant: Sharon