https://new.kenyalaw.org/akn/ke/judgment/keelrc/2026/2098

 **REPUBLIC OF KENYA** **IN THE EMPLOYMENT *&* LABOUR RELATIONS** **COURT OF KENYA AT KISUMU** **CAUSE NO. E009 OF 2022** THE LOCAL AUTHORITIES PROVIDENT FUND BOARD…..............................…………....**CLAIMANT** **VERSUS** THE COUNTY GOVERNMENT OF MIGORI…………………………………….…...........**1ST RESPONDENT** THE CHIEF FINANCE OFFICER MIGORI COUNTY GOVERNMENT………….………**2ND RESPONDENT** **RULING** 1. The Respondents have moved the Court by an application dated 12th March 2026 in response to the Claimant's suit seeking payment of Kshs. 1,006,098,350.09, being alleged unremitted provident fund contributions collected by the 2nd Respondent from the 1st Respondent's employees. Through the application, the Respondents seek the following orders: * + 1. *Spent* 2. *Spent* 3. That this court be pleased to dismiss the suit for want of *locus standi* and for failure, refusal and/or neglect to disclose material and truthful facts; 4. That this Court be pleased to strike out the Claimant’s pleadings and documents filed in this matter for being filed without *locus standi*. 5. That this Court be pleased to declare that the Claimant lacks the legal capacity, *locus standi*, authority and competence to institute, maintain, prosecute or sustain the instant suit. 6. That costs of the application be provided for. 2. The application is premised on the grounds set out on its face and is supported by the affidavit of Mr. George Orimbo, the 1st Respondent's Legal Officer. The Respondents contend that the Claimant lacks *locus standi* because it ceased to exist upon the coming into force of the County Governments Retirement Scheme Act on 17th October 2019. They argue that the proper entity to institute the claim is the County Governments Retirement Scheme, a body corporate established under section 3 of the Act with capacity to sue and be sued. Consequently, they maintain that the suit is incompetent, bad in law and fatally defective due to material non-disclosure. They further urge the Court to strike out the suit to avoid issuing orders that would ultimately be incapable of enforcement. 3. The Claimant opposes the application through a replying affidavit sworn by its Secretary and General Manager, Legal Services, Ms. Velma Okoth. It contends that the application is founded on an erroneous interpretation of the statutory framework governing the Claimant, the law on *locus standi* and the legal regime relating to pension and provident fund schemes. The Claimant acknowledges that section 52 of the County Governments Retirement Scheme Act repealed the Local Authorities Provident Fund Act but asserts that the repeal was subsequently nullified by a three-judge bench on 20th December 2022 in **Okoiti *&* 11 others *v* County Governments Retirement Scheme *&* 164 others [2022] KEELRC 13584 (KLR)**, which declared the Act unconstitutional. 4. The Claimant further contends that, even if the question of the Act's constitutionality remained unresolved, the issue could not properly be determined at an interlocutory stage through an application to strike out the suit. It argues that striking out is a draconian remedy, reserved only for the clearest of cases. Regarding the allegations of misrepresentation and material non-disclosure, the Claimant maintains that no particulars of fraud or misrepresentation have been specifically pleaded. It further contends that the Respondents' assertion that the County Governments Retirement Scheme is the proper party to sue is misconceived, as the transition of statutory functions, particularly where the enabling legislation is under constitutional challenge, does not automatically extinguish accrued rights or ongoing enforcement mandates. According to the Claimant, the cause of action arose from statutory obligations that accrued before and during the transition period and cannot be defeated by legislative or administrative uncertainty. It therefore urges the Court to dismiss the application with costs, maintaining that the Respondents have failed to demonstrate that the suit is hopeless, frivolous or incapable of being sustained. 5. In rejoinder the Respondents contend that contrary to the Claimant’s assertions the case of **Okoiti *&* 11 others *v* County Governments Retirement Scheme *&* 164 others [2022] KEELRC 13584 (KLR),** was determined by a single judge. Moreover, they contend that when this suit was instituted on 14th February 2022, the County Governments Retirement Scheme Act, which had commenced on 7th October 2019, enjoyed the rebuttable presumption of constitutionality until it was declared unconstitutional on 20th December 2022. They therefore argue that the decision in ***Okoiti*** neither revived the Claimant's statutory mandate nor reversed remittances lawfully made under the prevailing legal framework. The Respondents further submit that, since the **Okoiti** decision is allegedly pending appeal, these proceedings ought to be stayed to avoid the risk of conflicting outcomes should the Court of Appeal reverse the declaration of unconstitutionality. They maintain that the threshold for striking out has been met because, by the time the suit was filed, the Claimant had ceased to exist and its statutory functions had fully transitioned to the County Governments Retirement Scheme. They add that all contributions claimed in this suit, including remittances for the period between 2019 and 2022, were duly paid to the County Governments Retirement Scheme. Accordingly, they urge the Court to strike out the suit for want of *locus standi* and for failure by the Claimant to disclose the true legal position regarding the statutory regime governing pension contributions. 6. The application was canvassed by way of written submissions. The Respondents filed submissions dated 13th April 2026 together with supplementary submissions dated 22nd May 2026, While the Claimant filed submission dated 13th May 2026. Respondents’ Submissions 1. The Respondents identify the following issues for determination: * + 1. Whether the Claimant has *locus standi* to institute this suit; and 2. Whether the suit should be struck out. 2. On the issue of *locus standi*, the Respondents submit that the Claimant has neither demonstrated a sufficient interest in the subject matter nor shown that its interest is superior to that of any other person or entity. They argue that the County Governments Retirement Scheme is the proper body to institute the claim by virtue of sections 4 and 24 of the County Governments Retirement Scheme Act, which establish the Scheme and govern the remittance of retirement contributions. They further submit that section 52 of the Act repealed the Local Authorities Provident Fund Act, thereby extinguishing the Claimant's statutory mandate. Consequently, they contend that, at the time this suit was filed, the Claimant had no greater interest than the County Governments Retirement Scheme and therefore lacked the requisite *locus standi*. 3. On whether the suit should be struck out, the Respondents submit that *locus standi* goes to the root of a court's jurisdiction and that a suit instituted without *locus standi* is incompetent and liable to be struck out. They rely on **Toronken *&* 5 others *v* Nguruman Limited *&* 10 others, County Government of Narok *&* another (Interested Parties) 2025 KEELC 7598 (KLR),** where the court held: *“Without Locus Standi a suit cannot stand and the most possible effect would be to strike it out or dismiss the said suit. A court cannot therefore hear the merits of the case if the person bringing the suit cannot demonstrate a sufficient interest or a real connection to the harm or issue complained of”* 1. They also rely on the decision in the case of **Hussein *v* Gedi; Adan (Interested Party) [2025] KEELC 931 (KLR)**, where the Court underscored that lack of *locus standi* renders a suit incompetent, null and void. In their supplementary submissions, the Respondents reiterate that the County Governments Retirement Scheme Act enjoyed the rebuttable presumption of constitutionality from 7th October 2019, when it came into force, until 20th December 2022, when it was declared unconstitutional. They therefore submit that, by the time this suit was filed on 14th February 2022, the Local Authorities Provident Fund Act had already been repealed and remittances made to the County Governments Retirement Scheme during that period were lawful and cannot now be impugned. In support of the proposition that a declaration of invalidity does not ordinarily operate retrospectively, they rely on **Shahbal *v* Independent Electoral and Boundaries Commission *&* 3 others [2014] KESC 1 (KLR),** **Chicot County Drainage District *v* Baxter State Bank, 308 U.S. 371 (1940)**, as cited in **Mwarome Hempstone Mwadzua *&* 7 others *v* Law Society of Kenya *&* another [2021] KEHC 5969 (KLR)**, and **Opondo *v* Standard Group PLC [2024] KEELRC 342 (KLR).** They further submit that the Claimant's reliance on **Okoiti *&* 11 others *v* County Governments Retirement Scheme *&* 164 others [2022] KEELRC 13584 (KLR),** while simultaneously acknowledging that the decision is pending appeal, is disingenuous, as it invites the Court to proceed on the assumption that the legal position is finally settled. Claimant’s Submissions 1. On its part the Claimant identifies the following issues for determination: * + 1. Whether it retains *locus standi* to institute and maintain this suit notwithstanding the enactment of the County Governments Retirement Schemes Act; and 2. Whether the suit ought to be struck out *in limine*. 2. On the first issue, the Claimant submits that it possessed full legal personality and *locus standi* when it instituted the suit on 14th February 2022 because the repeal of the Local Authorities Provident Fund Act did not take immediate effect. It argues that although the County Governments Retirement Scheme Act, 2019 commenced on 7th October 2019, sections 52 and 55 thereof only became operative five years later by virtue of section 58, with the result that the repeal only took effect on 7th October 2024. Accordingly, the Claimant maintains that the Local Authorities Provident Fund Act remained in force when the suit was filed and that it retained full legal capacity to institute the proceedings. The Claimant further submits that the Respondents have misconstrued the effect of the commencement of the Act by equating its commencement with the immediate operation of all its provisions. It contends that Parliament deliberately enacted transitional provisions to preserve LAPFUND during the transition period and that it would therefore be erroneous to regard the Fund as having ceased to exist before the expiry of the statutory transition period. The Claimant further submits that the Respondents' reliance on section 52 of the Act, to the exclusion of its transitional provisions, is legally untenable. In support of this proposition, it relies on **Attorney General *v* Law Society of Kenya *&* 4 others [2019] KECA 283 (KLR)**, for the principle that statutes must be interpreted holistically rather than by isolating individual provisions. It further maintains that, even if the Respondents commenced remitting contributions to the County Governments Retirement Scheme from October 2019, they nevertheless remain liable for all arrears that accrued before that date. 1. As concerns the Respondents’ reliance onthe decision in the case of **Toronken *&* 5 others *v* Nguruman Limited [2025] KEELC 7598 (KLR)**, the Claimant submits that the decision is distinguishable. It argues that, unlike the claimant in that case who lacked any connection with the dispute, the Claimant herein is the statutory body mandated to receive the pension contributions that form the subject of these proceedings. The Claimant further relies on **Okiya Omtatah Okioti *v* County Governments Retirement Scheme *&* others [2022] KEELRC 13584 (KLR)**, in which the Court restrained the wholesale transition of funds and members from LAPFUND to the County Governments Retirement Scheme. 2. On its interest in the subject matter of the suit, the Claimant submits that it is statutorily mandated to recover pension contributions. It emphasizes that the claim relates to arrears dating back to 2013, well before the enactment of the County Governments Retirement Scheme Act, and therefore contends that the Respondents cannot rely on subsequent legislation to evade liability for earlier statutory defaults. In support of this position, the Claimant relies on **Local Authorities Provident Fund Board *v* County Government of Laikipia [2022] KEELRC 13559 (KLR)**, where the Court held that LAPFUND could recover unremitted pension contributions under section 53A of the Retirement Benefits Act. It also cites**Local Authorities Provident Fund Board *v* County Government of Isiolo [2024] KEELRC 1901 (KLR)*,*** where the Court proceeded to determine the claim on its merits notwithstanding a challenge to LAPFUND's *locus standi*, thereby affirming its capacity to institute such proceedings. The Claimant further submits that Articles 22, 43, 47 and 258 of the Constitution have broadened the doctrine of *locus standi* and permit statutory bodies acting as trustees to institute proceedings for the protection of pension rights. It therefore urges the Court to find that it retains both the statutory and constitutional capacity to prosecute the present claim. 3. On whether the suit ought to be struck out *in limine*, the Claimant submits that the Respondents have failed to satisfy the threshold for striking out pleadings. It relies on **D.T. Dobie *&* Company (Kenya) Ltd *v* Muchina [1982] KLR 1**, where the Court of Appeal held that a suit should only be struck out where it plainly discloses no reasonable cause of action or constitutes an abuse of the court process. The Claimant asserts that the present claim discloses a clear cause of action founded on the Respondents' failure to remit statutory pension contributions amounting to Kshs. 1,006,098,350.90 and therefore raises substantial triable issues. It further submits that the application raises contested questions of fact, including whether the contributions were remitted, the entity to which they were remitted and the amounts, if any, that remain outstanding, all of which require evidentiary determination and cannot properly be resolved through a preliminary application. The Claimant also contends that the application is a belated attempt to derail the hearing of a suit that has been pending for several years. It maintains that the Respondents were at all material times aware of the statutory framework they now invoke but deliberately waited until the eve of the hearing to raise the objection, thereby abusing the court process. The Claimant thus asserts that entertaining the application would sanction delay tactics and undermine the administration of justice. It therefore urges the Court to find that the Respondents have failed to demonstrate that it lacks legal personality or *locus standi*, or that the suit is frivolous, vexatious or otherwise unsustainable. Consequently, it prays that the application be dismissed with costs and that the suit proceeds to hearing on its merits. Disposition 1. The Claimant was a body that existed under the old dispensation of the former Constitution of Kenya replaced on 27th August 2010. The Claimant was replaced by successor in title being the County Provident Fund Board. As you all are aware, in Kenya, County Public Provident Funds and Retirement Schemes fall under the [County Governments Retirement Scheme Act (Cap. 189B)](https://new.kenyalaw.org/akn/ke/act/2019/21), which was enacted to consolidate various retirement schemes for County Governments and for the defunct local authority employees. The Act repealed older legislation, to wit, the [Local Authorities Provident Fund Act (Cap. 272)](https://new.kenyalaw.org/akn/ke/act/1960/25/eng%401960-07-05). It merged schemes like LAPFUND and LAPTRUST into a unified system with these falling under various aspects of management by the CPF Group in the schemes managed thereunder. The Claimant is therefore the wrong party to be in Court seeking provident funds for the employees of the defunct local authorities. Upon repeal of Cap 272 by the County Governments Retirement Scheme Act on 7th October 2019, the Claimant ceased to exist or was swallowed up by the new structures in place. It is therefore incompetently before this Court as it no longer exists. The suit is for dismissal having been filed by an entity that ceased to exist on repeal of cap 272. Suit dismissed no order as to costs. It is so ordered. **Dated and delivered at Kisumu this 22nd day of July 2026** **Nzioki wa Makau, MCIArb.** **JUDGE**