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THE MBWA KALI (FEROCIOUS DOGS) DECLARATIONS BY LOUNGES, BARS & RESTAURANTS-IMAGE RIGHTS IN KENYA

The “Mbwa Kali” Declarations by Nairobi Lounges, Bars, & Restaurants: Understanding Image Rights in Kenya

In our recent WKA Advocates newsletter, we discussed the uninformed notices issued by some entertainment venues and restaurants in Nairobi, such as #TheLoftLounge and #TheQuiverLounge. These establishments have informed their patrons about the presence of photographers, implying that customers consent to the use of their image rights by simply entering the venue. This raises a crucial question: who invited these photographers, and do patrons fully understand their privacy rights?

The increasing panic among Nairobi business owners reveals widespread ignorance about Kenya’s Data Protection Laws. Fortunately, the Office of the Data Protection Commissioner (ODPC) is taking decisive action to end this era of ignorance. With the growing collection, storage, and use of personal data by third parties, it’s critical for both businesses and individuals to familiarize themselves with the Data Protection Act, 2019 (DPA, 2019). Do data subjects in Kenya know their rights? Are data controllers aware of their legal obligations under the DPA, 2019?

Data Protection Laws in Kenya: A Growing Concern for Lounges and Restaurants

Ignorance of the law is no defense. This has been demonstrated by the recent penalties issued by the ODPC. On 26th September 2023, the ODPC imposed penalties on three Data Controllers for violating Kenya’s Data Privacy Rights and failing to comply with the Data Protection Act.

Key ODPC Penalties:

  • Mulla Pride Ltd, a digital credit provider running the KeCredit and Falcrash mobile lending apps, was fined Ksh. 2,975,000 for misusing complainants’ names and contacts for harassing messages.
  • CasaVera Lounge, a restaurant on Ngong Road, Nairobi, was fined Ksh. 1,850,000 for posting a patron’s image on social media without their consent.
  • Roma School in Uthiru was fined Ksh. 4,550,000 for sharing minors’ photos online without parental consent.

Nairobi Venues React with Misleading Notices

In response to these penalties, many Nairobi bars and restaurants, such as Evo Lounge, The Loft, Texas Barbeque, Platinum 7D, and Quiver Lounge Kilimani, have issued warning notices implying that entry to their premises constitutes consent to be photographed or recorded. Here’s an excerpt from Evo Lounge’s notice:

“Your entry and presence on the premises constitute your consent to be photographed, filmed, and/or recorded… By entering, you waive and release any claims related to the use of recorded media of you… including invasion of privacy.”

These notices are what we call Mbwa Kali Declarations. Unfortunately, many business establishments have misunderstood the penalties issued by the ODPC. Rather than respecting Kenya’s Data Privacy Laws, they resort to invalid and aggressive warnings of “implied consent.” This is not how the law works.

Data Protection Obligations for Nairobi Businesses Under the DPA, 2019

Bars, restaurants, and other establishments in Kenya must comply with the Data Protection Act, 2019, especially if they hire photographers to capture images (which constitute personal data) of their patrons for marketing purposes.

Obligations Include:

  1. Registration: All Data Controllers and Data Processors must register with the ODPC before collecting any personal data. The ODPC maintains a register of certified entities.
  2. Consent: Businesses must obtain free, informed, and express consent from patrons before collecting and using their personal data. Consent cannot be implied.
  3. Compliance: All personal data must be processed lawfully and fairly, respecting the rights of the data subjects.

The 8 Key Data Protection Principles in Kenya

Kenya’s Data Protection Act emphasizes the following principles:

  • Right to Privacy: Data must be processed with respect for privacy.
  • Lawfulness, Fairness, and Transparency: Processing must be lawful and transparent, with clear communication to data subjects.
  • Purpose Limitation: Data collection must be for specific, legitimate purposes.
  • Data Minimization: Only relevant data should be collected.
  • Accuracy: Data must be accurate and regularly updated.
  • Storage Limitation: Personal data should be stored only for as

long as necessary for its intended purpose.

  • Integrity and Confidentiality: Data must be processed securely and confidentially.
  • Accountability: Data Controllers must demonstrate compliance with the Data Protection Act, 2019.

Commercial Use of Personal Data in Nairobi

Section 37(1) of the DPA, 2019, strictly prohibits the commercial use of personal data without explicit consent or legal authorization. Any personal data collected must be anonymized to prevent identification of the individual.

Data Subject Rights in Kenya

Under Section 26 of the DPA, 2019, data subjects in Kenya have the right to:

  • Be informed about the usage of their data.
  • Access their personal data.
  • Object to the processing of their data.
  • Correct inaccurate or misleading data.
  • Have their data deleted if it’s inaccurate or unlawfully processed.

Data subjects can file complaints with the ODPC for any violations of their data rights. The ODPC has the authority to investigate and impose penalties or enforcement notices.

Nairobi Businesses Must Take These Obligations Seriously

Restaurants, bars, hair salons, gyms, and other establishments in Kenya cannot:

  • Collect personal data without registration.
  • Assume consent through “implied” warnings.
  • Use personal data indefinitely for any purpose.
  • Deny data subjects access to inspect their personal data.

Conclusion: The Misuse of “Implied Consent” by Nairobi Bars and Restaurants

Warning notices of “implied consent” issued by businesses such as #EvoLounge, #QuiverLounge, and #Platinum7D are illegal and invalid. Business owners must understand that Data Protection Officers (DPOs) are essential in ensuring compliance with data privacy laws in Kenya to avoid hefty penalties.

At WKA Advocates, we offer specialized Data Protection Officer (DPO) services to ensure businesses comply with Kenya’s Data Protection Laws.

We hope this article helps clarify the key provisions of the Data Protection Act, 2019. For further legal assistance or compliance advice, contact us at:

Email: info@wka.co.ke
Website: wakilihub.co.ke/
Phone: +254 798 03 580
Location: Nairobi Hub, Parklands, Valley View Business Park, 6th Floor, City Park Drive, Off Limuru Road.

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HOW TO AVOID PROBATE-WKA ADVOCATES

How to Avoid Probate in Kenya

One common question was, ‘Can I avoid drawing a will and still maintain control over my estate upon my demise?’ We found it important to address this pertinent issue.

Death is inevitable, and it is essential to plan for the future, particularly regarding your property (estate). It is imprudent to live without making arrangements for how your property will devolve upon death. Such plans ensure that dependents and next of kin are well provided for, and the wishes of the deceased are respected.

The Law of Succession Act provides rules for writing a valid and enforceable will, as well as the rules for the succession of an intestate’s estate. However, Kenyan courts have often declared wills invalid or revoked them, rendering the deceased person intestate. The main disadvantage of dying intestate is the loss of control over property upon death, exposing next of kin to the arbitrary rules of intestacy and potential disputes among family members.

Fortunately, the law provides other means to maintain control over estates upon death without writing a will or dying intestate. These include survivorship, nomination, family trusts, and donatio mortis causa (gifts in contemplation of death).

1. Survivorship

In re Estate of Johnson Njogu Gichohi (Deceased) [2018] EKLR, the court stated that property can pass upon death other than by will through survivorship, particularly in cases of joint tenancies. Section 91(4) of the Land Registration Act, CAP 300 states that in joint tenancies, a co-owner’s interest automatically passes to the surviving tenant upon death by virtue of the principle of survivorship. Section 43 of the Law of Succession Act adds that in the event of simultaneous deaths, it is presumed that the younger person survives the older person, and for spouses, it is presumed they died simultaneously.

2. Nomination

A nomination is a direction by a nominator to a trustee holding an investment to pay the funds to a nominee upon the nominator’s death. In Kenya, nominations are common for savings and investments in cooperative societies and provident pension schemes. Nominations take effect upon death and are not subject to the law of succession. They can be revoked by a later nomination, subsequent marriage of the nominator, or the death of the nominee before the nominator. However, a nomination cannot be revoked by a subsequent will or codicil.

3. Family Trusts

A Family Trust is created by a Settlor through a Trust Deed, instructing a Trustee to manage assets for the benefit of the Beneficiary. Section 3D of the Trustees (Perpetual Succession) Act, 2021 Cap 164 defines a family trust, which can be living (inter vivos) or testamentary. The advantages of family trusts include avoiding probate, benefiting unrelated persons, protecting assets from creditors, benefiting multiple generations, and imposing restrictions on beneficiaries. Trusts are also valuable for estate and tax planning.

4. Donatio Mortis Causa (Gifts in Contemplation of Death)

For a gift in contemplation of death to be valid, as outlined in Cain v Moon {1896} 2 QB 283 and Section 31 of the Law of Succession Act, it must be given because of a present illness or imminent danger, be conditional upon the donor’s death, be delivered to the donee, be capable of making the subject matter of donation mortis causa, and the donee must survive the donor.

Contact Us

We at WKA Advocates have a dedicated Real Estate and Succession Planning department. If you have any questions or require assistance in avoiding probate, drawing up your family trust, or will, kindly feel free to contact us by email at info@wka.co.ke.

We hope this information helps you understand the ways to avoid probate in Kenya and maintain control over your estate upon death. Please note that this newsletter provides a general guide to the subject matter and should not be relied upon without legal advice.

For further information or legal assistance, contact us at info@wka.co.ke, visit wakilihub.co.ke/, or call +254 798 03 580. Our office is located at Nairobi Hub: Parklands, Valley View Business Park, 6th Floor, City Park Drive, Off Limuru Road.

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President Assents to 4 Universal Health Coverage Bills, Restructuring NHIF kenya

President Assents to 4 Universal Health Coverage Bills, Restructuring NHIF

In honor of the pledge to accelerate Kenya’s attainment of Universal Health Coverage (#UniversalHealthCoverage), President William Samoei Ruto signed four crucial bills promoting healthcare on October 19, 2023. These are:

  1. The Primary HealthCare Bill, 2023
  2. The Digital Health Bill, 2023
  3. The Facility Improvement Financing Bill, 2023
  4. The Social Health Insurance Bill, 2023

Transformative Changes

These four bills usher in a paradigm shift in Kenya’s healthcare legal and institutional framework by repealing the current NHIF and establishing three new funds:

  • Primary Healthcare Fund (PHF)
  • Social Health Insurance Fund (SHIF)
  • Emergency, Chronic, and Critical Illness Fund (ECCIF)

The NHIF has recorded a steady decline in fulfilling its mandate recently. The Kenya Association of Private Hospitals (KAPH) had even banned the use of the NHIF card due to non-payment by the insurer. This situation has caused anguish for many Kenyans, as NHIF is the most popular health insurance in the country and is heavily relied upon. Patients have had to pay in cash or remain untreated. Public hospitals still accept the NHIF card for payment, but the insurer covers only limited services, prompting patients to seek assistance from private hospitals.

The President’s move to assent to the four Universal Health Coverage Bills, which repeal the current NHIF, has elicited mixed reactions as discussed in our newsletter.

Important Highlights

Section 26 of the Social Health Insurance Act, 2023 makes it mandatory for every Kenyan citizen to register as a member of the Social Health Insurance Fund. The Emergency, Chronic, and Critical Illness Fund will cover emergency and chronic illness costs once the Social Health Insurance Fund is depleted.

The Primary Healthcare Act, 2023

Section 2 of the Primary Healthcare Act defines Universal Health Coverage as ensuring “all individuals and communities receive the health services they need, including the full spectrum of essential, quality health services from health promotion to prevention, treatment, rehabilitation, and palliative care without suffering financial hardship.”

The Act further defines Primary HealthCare as “essential health care based on practical, scientifically sound, and socially acceptable methods and technology, made universally accessible to individuals and families in the community at every stage of their development, through their full participation and at an affordable cost to the community and country, in the spirit of self-reliance and self-determination.”

Its main objective is to promote and fulfill Article 43(1) of the Constitution of Kenya, 2010, which provides for every person’s right to the highest attainable standards of health care. Other objectives under Section 3 include:

  • Implementing primary health care through a systemic approach and clear delineation of roles of all stakeholders towards the realization of universal health coverage
  • Establishing Primary Health Care Networks, Community Health Units, and other stakeholder-centered engagement forums for sustainable primary healthcare services
  • Providing for the role of the multidisciplinary team in the provision of primary health care services
  • Providing for the role of community health officers, community health assistants, and community health promoters in providing community-based primary health care services

Digital Health Act, 2023

The Digital Health Act streamlines the adoption of technology to facilitate data sharing and resource utilization.

Section 3 outlines its objectives to ensure and promote Universal Health Coverage, including:

  • Establishing the Digital Health Agency
  • Maintaining a comprehensive integrated health information system
  • Promoting innovation and the safe, efficient, and effective use of technology for healthcare, including continuity of care, emergency and disaster preparedness, and disease surveillance
  • Establishing a regulatory framework for the e-Health ecosystem data life cycle
  • Ensuring privacy, confidentiality, and security of health data
  • Developing standards for the provision of m-Health, telemedicine, and e-learning
  • Establishing a regulatory framework for e-Waste Management
  • Ensuring the safe and secure transfer of personal, identifiable health data and client medical records to and from health facilities outside Kenya

Social Health Insurance Act, 2023

The Social Health Act does away with the NHIF by introducing three new funds: Primary Healthcare Fund, Social Health Insurance Fund, and Emergency, Chronic, and Critical Illness Fund.

Section 26 makes it mandatory for every Kenyan citizen to register as a member of the Social Health Insurance Fund. The Primary Healthcare Fund will enable Kenyans to purchase health services from level one to three hospitals, while the Social Health Insurance Fund will cover services from level four to six hospitals. The Emergency, Chronic, and Critical Illness Fund will cover emergency and chronic illness costs once the Social Health Insurance Fund is depleted.

The main objective, as outlined under Section 3, is to establish a framework for improved health outcomes and financial protection in accordance with the right to the highest standards of healthcare and Universal Health Coverage.

Facilities Improvement Financing Act, 2023

Section 4 provides that the Act applies to level one to level five public health facilities.

Objectives under Section 3 include:

  • Enabling the collection, retention, and management of revenue derived from health services offered at public health facilities in Kenya
  • Establishing a governance framework for effective planning, coordination, mobilization, and access to public facilities’ improvement financing
  • Appropriating, managing, and using budgeted health services revenue to supplement operations and facilitate quality service delivery in public health facilities
  • Promoting equitable public health facilities improvement financing, including benefit sharing
  • Providing a unified system for financial management in public health facilities, improving efficiency and effectiveness, and promoting quality health service delivery

Response and Reactions from Kenyans

The President’s assent to the new legislation has not been well received by some Kenyans, primarily due to concerns about the high cost to salaried workers. The Standard newspaper highlighted this concern on October 23, 2023. However, Health Cabinet Secretary Susan Nakhumicha assured citizens on October 25, 2023, that a regulatory body will determine the premiums and oversee the implementation of the Universal Health Coverage Act. The transition from NHIF to the Social Health Authority will take 12 months.

Conclusion

We hope this information is helpful in understanding the current developments regarding the repeal of the National Health Insurance Fund and the establishment of the Primary Healthcare Fund, Social Health Insurance Fund, and Emergency, Chronic, and Critical Illness Fund. Please note that this newsletter provides a general guide and should not be relied upon without legal advice.

For further information or legal assistance, contact us at info@wka.co.ke, visit wakilihub.co.ke/, or call +254 798 03 580. Our Nairobi Hub is located at Parklands, Valley View Business Park, 6th Floor, City Park Drive, Off Limuru Road.

Authors:

  • William Karoki, Founding Partner
  • Florence Mwende, Lawyer
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The Supreme Court Rules That an Allotment Letter is Not a Title Deed and Cannot Be Transferred

The Supreme Court Rules That an Allotment Letter is Not a Title Deed and Cannot Be Transferred

On 22nd September 2023, the Supreme Court delivered a verdict in SC Petition No.5 (E006) of 2022, known as the “Torino case.” The Court ruled that an Allotment Letter is not a title deed and cannot confer any interest in land. It is merely an offer awaiting the fulfilment of specified conditions, including the payment of a Stand Premium and Ground Rent within prescribed timelines. Even after these conditions are met, an allottee cannot pass valid title to a third party until they acquire title through proper registration under applicable laws.

This ruling underscores that an Allotment Letter is not a title deed and cannot be transferred from one person to another. Property buyers must conduct thorough due diligence (#BuyerBeAware) to ensure they obtain a valid title deed. The principle of indefeasibility of title does not apply if the initial land allocation was illegal or procedurally flawed.

The judgment has significant implications, particularly for many Kenyans in the Coastal region, Kajiado, Juja, Nairobi (Embakasi and Starehe), and other areas, who hold #AllotmentLetters and attempt to transfer them as #TitleDeeds. Many buyers end up in court upon realizing their title deeds are invalid. Conducting thorough #DueDiligence is crucial to avoid land fraud. Allotment Letter holders can transfer land through registration via the Ardhisasa platform under the #NationalLandCommissionServices to obtain valid title deeds.

The Torino Case: From Trial Court to Supreme Court

Trial Court: Constitutional Petition No. 38 of 2011
Torino Enterprises Limited vs. The Honourable Attorney General

Timeline of Allocation
On 21st February 1964, a freehold title known as Embakasi L.R No. 11344 (Original No. 41/3), measuring 5639 acres, was granted to Kayole Estates Limited. This parcel was transferred to the Nairobi City Council (NCC) on 22nd November 1971. In 1973, it was subdivided into 8 parcels, including LR No. 22524 (83.910 Hectares), which was transferred to Renton Company Limited in 1999 via an Allotment Letter. Renton then transferred it to Torino Enterprises Limited in 2000 for Kshs.12,000,000. Torino claimed it received a title deed under the Registration of Titles Act on 26th April 2001.

In 2005, Torino argued that the Department of Defence (DoD) unlawfully fenced off 90 acres of its property. Torino contended that DoD’s actions were illegal, infringing on its constitutional property rights under Article 40 of the Constitution, and that DoD failed to comply with #CompulsoryAcquisitionProcedures.

Court Rulings
On 4th July 2011, the trial court ruled in favor of Torino, declaring the suit property a freehold private property and not public land. The court ordered the Respondent to restore possession to Torino or pay Kshs.1,530,000,000, the market value of the land. The Attorney General appealed this decision.

Civil Appeal No.84 of 2012
Attorney General vs. Torino Enterprises Limited (2019)

On 4th February 2022, the Court of Appeal overturned the High Court’s judgment, stating that the suit property was private land and not unalienated government land before NCC’s purchase in 1971. It held that the #CommissionerOfLands lacked authority to allocate it. The court found Torino was not an innocent purchaser, as it should have been aware of DoD’s occupation. Consequently, the #CertificateOfTitle issued to Torino was deemed illegal.

Supreme Court: Petition No. 5 (E006) of 2022
Torino Enterprises Ltd vs. The Attorney General

The Supreme Court concluded that an Allotment Letter cannot confer land interest and cannot be transferred until proper registration is completed. It determined that Torino was not an innocent purchaser and dismissed the appeal.

Similar Verdict in Dina Management Limited Case

In Dina Management Limited vs. The County Government of Mombasa & 5 Others (Petition 8 (E010) of 2021), the Supreme Court revoked a title deed due to non-compliance with legal procedures, emphasizing the #BurdenOfProving the #Legality and #Validity of a title rests with the buyer.

Conclusion

These precedents highlight the necessity for buyers to conduct thorough due diligence before purchasing property. WKA Advocates’ Real Estate, Conveyancing, and Construction Law department can assist with this process, ensuring compliance and reducing the risk of land fraud.

For further legal assistance or more information, contact us at info@wka.co.ke, visit wakilihub.co.ke/, or call +254 798 035 580. Our Nairobi Hub is located at Parklands, Valley View Business Park, 6th Floor, City Park Drive, Off Limuru Road.

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Can Widows Inherit from Their Parents-In-Law? in kenya

Can Widows Inherit from Their Parents-In-Law? in kenya

Following our recent publication, WKA Newsletter Edition #10 ‘Divorce by Mutual Consent in Kenya – Marriage (Amendment) Bill, 2023,’ we received a flurry of questions from you, our esteemed readers. One of the most common questions was, ‘Can a widow inherit from her parents-in-law?’ We found it important to address this pertinent issue.

In Kenya, there are two forms of succession: testate and intestate succession.

Testate Succession

Testate succession occurs when a person makes arrangements to ensure that upon death, their property passes to the person of their choice. These arrangements are made through a valid and enforceable will.

Intestate Succession

Intestate succession occurs under the following situations as provided under Section 34 of the Law of Succession Act:

  1. A person dies without making a will.
  2. Upon their death, the person’s will is invalidated or revoked.
  3. The person fails to revive their earlier revoked will or make another will.

In most instances, a majority of Kenyans are not keen to write their wills, and hence they die intestate. This is evidenced by the large number of succession cases in courts where family members fight over inheritance. These cases drag on for years before the deceased person’s property is finally allocated to their rightful dependents.

Unfortunately, the most affected dependents are widows (mothers) who have to cater for their children’s needs while battling their in-laws in court to get a share of their spouse’s estate.

Recent Court Ruling

Recently, Justice William Musyoka tackled this issue in the case of Re Estate of Francis Andachila Luta (Deceased) (Succession Cause 875 of 2012) [2022], where the High Court declared that daughters-in-law are not entitled to a portion of their deceased parents-in-law’s estate in cases of intestacy, whether under the Law of Succession Act or customary law. The Honorable Justice stated:

“The protestor is not a child of the deceased. She is, therefore, not entitled to anything out of the estate of the deceased herein. She is a daughter-in-law of the deceased, as she was married to his late son, Henry Lisansa. She has not come out clearly to say who she represents in these proceedings, whether it is her children, the grandchildren of the deceased, or whether she represents the estate of her late husband, Henry Lisansa. She cannot speak for their children, because the said children are entitled to direct access to the estate, vide section 41 of the Law of Succession Act. If she purports to be pursuing the interest due to her late husband, then she will require to take out letters of administration in the estate of her late husband, in order to have authority to claim his stake in the estate…”

This means that if you are a married woman and your husband passes on, you cannot inherit from your parents-in-law if they die intestate. As a daughter-in-law, you will not be considered a dependent within the meaning of Section 29 of the Law of Succession Act. Note that these provisions also apply to widowers.

Rights of a Surviving Spouse in Intestacy

A surviving spouse is entitled to:

  1. A life interest on the whole of the residue of the net estate. The ultimate destination of this property is to the deceased’s children.
  2. The life interest of the surviving widow terminates upon her remarriage.

However, the case of Ripples International v Attorney General & another; FIDA (Interested Party) (Constitutional Petition E017 of 2021) [2022] introduced new developments in the interpretation of Sections 35, 36, and 39 of the Law of Succession Act. The Court declared Sections 35(1)(b), 36(1)(b), and 39(1)(a)(b) unconstitutional on grounds of gender inequality and must be interpreted in a manner that gives effect to the equality of women and men. This means that if a widower remarries, his life interest will also terminate just like that of a widow who remarries.

We hope this information helps answer your questions and understand the interesting developments in the Law of Succession Act, Cap 160. Please note that the contents of this newsletter are intended to provide a general guide to the subject matter and should not be relied upon without legal advice.

For further information or legal assistance on compliance or any other legal issue, kindly contact us at info@wka.co.ke, visit wakilihub.co.ke/, or call +254 798 03 580. Our Nairobi Hub is located at Parklands, Valley View Business Park, 6th Floor, City Park Drive, Off Limuru Road.

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Divorce by Mutual Consent in Kenya

Divorce by Mutual Consent in Kenya – Marriage (Amendment) Bill, 2023

The National Assembly of Kenya introduced the Marriage (Amendment) Bill on June 27, 2023, aiming to amend the Marriage Act of 2014 (Marriage Act, 2014) to facilitate divorce by mutual consent and related purposes.

The current Marriage Act, 2014 lacks a legal framework for couples to voluntarily dissolve their marriage without resorting to court orders initiated by one party. Section 66 of the Marriage Act, 2014 outlines the separation process, which often leads to conflicts and hostile interactions between spouses.

The Amendment Bill addresses this issue by allowing spouses to mutually agree to divorce, promoting an amicable, straightforward, and cost-effective process.

Key Amendments Proposed:

  1. Reduction of Waiting Period: The proposed amendment reduces the waiting period for divorce under Section 66(1) from 3 years to a minimum of 1 year after the marriage celebration.
  2. Introduction of Section 75A: A new section, 75A, is introduced, enabling parties to jointly petition the court for divorce by mutual consent, provided certain conditions are met. These include mutual separation for at least one year, agreement to dissolve the marriage, and presentation of the petition after at least one year of marriage celebration.

Legal Background:

The constitutionality of Section 66(1) of the Marriage Act was challenged in the case of Tukero Ole Kina v Attorney General & Another (2019), where the court declared it unconstitutional due to its disproportionate effect. This decision was upheld by the Court of Appeal in National Assembly of Kenya v Kina & another (2022), suspending its effect for 3 years to allow necessary parliamentary amendments.

Current Status:

As of the date of our WKA Advocates Newsletter, Section 66(1) of the Marriage Act, 2014 remains in force pending parliamentary amendments. The Marriage (Amendment) Bill represents a positive step towards implementing the court’s decision.

Conclusion:

The proposed amendments aim to simplify and expedite the divorce process for mutually consenting couples, aligning Kenyan law with evolving societal needs and expectations.

We trust this information provides clarity on the key provisions of the Marriage (Amendment) Bill 2023. Please note that this newsletter serves as a general guide and should not be relied upon without legal advice.

For further information or legal assistance on any legal issue, please contact us at info@wka.co.ke, visit wakilihub.co.ke/, or call +254 798 03 580. Our Nairobi Hub is located at Parklands, Valley View Business Park, 6th Floor, City Park Drive, Off Limuru Road.

Authors:

  • William Karoki, Founding Partner
  • Florence Mwende, Associate
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Kenya: President Signs the Climate Change (Amendment) Bill 2023 Ahead of International Climate Summit

Kenya: President Signs the Climate Change (Amendment) Bill 2023 Ahead of International Climate Summit

The President of Kenya has signed the Climate Change (Amendment) Bill 2023 following its approval by the Senate. This Bill aims to amend the Climate Change Act of 2016 to regulate carbon markets, an area not addressed in the current Act.

The Bill aligns with the Paris Agreement, which Kenya ratified and became a party to on December 28, 2016. The Paris Agreement encourages parties to raise their mitigation ambition through carbon markets and non-market approaches.

Key Aspects of the Carbon Market Regulation

  • Carbon Market Mechanism: The carbon market enables public and private entities to transfer and transact emission reduction units, mitigation outcomes, or offsets generated through carbon initiatives, programs, and projects. This is subject to compliance with national and international laws.
  • Usage of Carbon Credits: Companies or individuals can use carbon markets to compensate for their greenhouse gas emissions by purchasing carbon credits from entities that remove or reduce greenhouse gas emissions.

The Presidential assent to the Bill comes days ahead of the African Climate Change Summit (ACS) 2023 and Africa Climate Week, scheduled from September 4 to 8, 2023, in Nairobi. This international event has garnered significant attention as climate change is a pressing global challenge.

We will attend the African Climate Change Summit (ACS) 2023 and keep you updated on the developments.

Conclusion

We hope this information helps in understanding the main objective of the Climate Change (Amendment) Bill 2023. Please note that the contents of this newsletter are intended to provide a general guide to the subject matter and should not be relied upon without legal advice.

For further information or legal assistance on compliance or any other legal issue, contact us at info@wka.co.ke, visit wakilihub.co.ke/, or call +254 798 03 580. Our Nairobi Hub is located at Parklands, Valley View Business Park, 6th Floor, City Park Drive, Off Limuru Road.

Authors:

  • William Karoki, Founding Partner
  • Florence Mwende, Lawyer
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Kenya: President Signs the Anti-Money Laundering and Combating of Terrorism Financing Laws (Amendment) Act 2023

Kenya: President Signs the Anti-Money Laundering and Combating of Terrorism Financing Laws (Amendment) Act 2023

In a significant move to enhance financial security and combat illicit activities, the President of Kenya officially signed into law the Anti-Money Laundering and Combating of Terrorism Financing Laws (Amendment) Act 2023 on September 1, 2023. This Amendment Act underscores Kenya’s commitment to strengthening its financial regulatory framework, fostering international cooperation, and aligning with global standards in the fight against money laundering, terrorism financing, and related illicit financial activities.

Prior to the enactment of the Amendment Act, the Law Society of Kenya (LSK) sought a court repeal of amendments compelling lawyers to disclose suspicious financial deals involving their clients. Consequently, the LSK agreed with the State to be designated as a self-regulating body in line with the Financial Action Task Force (FATF) standards, protecting client-attorney privileges.

Key Highlights of the Amendment Act

Beneficial Ownership

Limited Liability Partnership Act, 2011 (No. 42 of 2011):

  • Definition: The Amendment Act defines a Beneficial Owner as “the natural person who ultimately owns or controls a legal person or arrangement or the natural person on whose behalf a transaction is conducted, including those who exercise ultimate effective control over a legal person or arrangement.”
  • Register Requirements: Section 31B requires every limited liability partnership (LLP) to maintain a register of its beneficial owners and lodge a copy with the Registrar, both for proposed LLPs and existing LLPs within 60 days of the section coming into force.
  • Update and Record Maintenance: LLPs must update the Registrar with any amendments to the register within 14 days and keep records for at least 10 years.
  • Penalties: Penalties range from KES 100 for each day of default to a maximum of KES 500,000. The Registrar may also issue directives for compliance.

Foreign Limited Liability Partnership:

Section 34B(1)(b)(iv) mandates that applicants for foreign LLP registration submit a notarized copy of a list of beneficial owners and their particulars, along with other requirements.

Companies Act, 2015 (No. 17 of 2015):

  • Register Requirements: Section 16A requires applicants for company registration to ensure compliance with beneficial ownership particulars. Section 93A mandates every company to maintain a register of its beneficial owners and lodge a copy with the Registrar, both for proposed and existing companies within specified time frames.
  • Update and Record Maintenance: Companies must update the Registrar with any amendments within 14 days (30 days for public listed companies) and keep records for at least 10 years.
  • Penalties: Similar to LLPs, penalties range from KES 100 per day of default to a maximum of KES 500,000, with additional directives for compliance.

Additional Highlights of the Amendment Act

  1. Consensual Extradition: Fugitive criminals can now consent to extradition without formal proceedings, facilitated through Mutual Legal Assistance, streamlining international cooperation in combating cross-border crimes, including terrorism.
  2. Enhanced Regulatory Authority: The Capital Markets Authority (CMA) and Insurance Regulatory Authority (IRA) have expanded powers to ensure licensee compliance with anti-money laundering and terrorism financing laws.
  3. Operational Independence for the Financial Reporting Centre (FRC): The FRC gains operational independence, exempting it from the definition of a State Corporation, to strengthen its capacity to combat money laundering.
  4. Strengthened Reporting Obligations: Reporting entities must promptly report suspicious transactions to the FRC, which will analyze these reports and coordinate with law enforcement agencies for appropriate action.
  5. Central Bank Supervision: The Central Bank of Kenya (CBK) will oversee financial institutions and agents of reporting institutions to ensure compliance with anti-money laundering regulations.
  6. Expanded Scope and Coverage: The Act broadens the definition of money laundering offenses to include proceeds from domestic and international criminal activities, terrorism financing, and corruption, addressing emerging threats in digital and cryptocurrency spaces.
  7. Increased Penalties and Deterrents: The amendments introduce more severe penalties, including higher fines and extended prison terms, to deter illicit financial activities.
  8. Enhanced Customer Due Diligence: Financial institutions and designated non-financial businesses must conduct thorough customer due diligence according to Know Your Customer (KYC) standards, promoting transparency.
  9. Harmonization with FATF Standards: The legislation aligns Kenya’s licensing regime with FATF standards, establishing global standards to combat money laundering, terrorism financing, and financing of weapons of mass destruction.

Conclusion

We hope this information is helpful in understanding the key benefits of the Anti-Money Laundering and Combating of Terrorism Financing Laws (Amendment) Act 2023. Please note that this newsletter provides a general guide and should not be relied upon without legal advice.

For further information or legal assistance on compliance or any other legal issue, contact us at info@wka.co.ke, visit wakilihub.co.ke/, or call +254 798 03 580. Our Nairobi Hub is located at Parklands, Valley View Business Park, 6th Floor, City Park Drive, Off Limuru Road.

Authors:

  • William Karoki, Founding Partner
  • Florence Mwende, Lawyer
Categories
Uncategorized

Kenya Cabinet Approves Splitting of NHIF (National Health Insurance Fund)

Kenya Cabinet Approves Splitting of NHIF (National Health Insurance Fund)

In honor of the President’s pledge to accelerate Kenya’s attainment of Universal Health Coverage (UHC), the Cabinet has considered and approved four crucial bills that promote healthcare, to be transmitted to Parliament. These are:

  1. The Primary HealthCare Bill, 2023
  2. The Digital Health Bill, 2023
  3. The Facility Improvement Financing Bill, 2023
  4. The Social Health Insurance Bill, 2023

These four bills usher in a new paradigm in the legal and institutional framework for healthcare in Kenya by repealing the current NHIF and establishing the following three funds in its place:

  • Primary Healthcare Fund
  • Social Health Insurance Fund
  • Emergency, Chronic, and Critical Illness Fund

The NHIF has experienced a steady decline in fulfilling its mandate in recent years. The Kenya Association of Private Hospitals (KAPH) had even banned the use of the NHIF card due to nonpayment by the insurer. This situation left many Kenyans in distress because the NHIF is the most popular health insurance in the country and is relied upon by the majority. Patients have had to pay in cash or go untreated. While public hospitals still accept the NHIF card as a mode of payment, the insurer only covers limited services, prompting patients to seek assistance from private hospitals. The Cabinet’s decision to repeal the current NHIF is a significant relief for Kenyans.

We will be updating the public on the provisions of these bills as they are published. We hope this information helps in understanding the current developments regarding the repeal of the National Health Insurance Fund and the establishment of the Primary Healthcare Fund, Social Health Insurance Fund, and Emergency, Chronic, and Critical Illness Fund.

Please note that the contents of this newsletter are intended to provide a general guide to the subject matter. It should not be relied upon without legal advice on its contents.

For further information or legal assistance on compliance or any other legal issue, please contact us at info@wka.co.ke, wakilihub.co.ke/, +254 798 03 580, Nairobi Hub: Parklands, Valley View Business Park, 6th Floor, City Park Drive, Off Limuru Road.

Authors:

  • Founding Partner: William Karoki
  • Lawyer: Florence Mwende
Categories
Uncategorized

A NEW DAWN FOR FOREIGN INVESTORS IN THE ICT SECTOR IN KENYA

A NEW DAWN FOR FOREIGN INVESTORS IN THE ICT SECTOR IN KENYA

The Information and Communications Technology (ICT) Sector Policy Guidelines 2020 in Kenya introduced a requirement for foreign firms licensed to provide telecommunications services to have at least 30% of their shares held by locals within a three-year grace period.

The rationale behind the 30% local shareholding requirement was to ensure national security, attract foreign investment, and create employment for Kenyans. The policy aimed to equip Kenyans with sufficient knowledge to help local ICT firms flourish. However, it did not achieve its mandate as the number of foreign investors in the ICT sector declined significantly. Foreign companies found the policy prohibitive and were reluctant to find local partners, making it harder for existing startups to increase their stake beyond the 30% equity threshold.

Consequently, President William Ruto proposed the removal of the mandatory local shareholding requirement as part of the fiscal policy changes expected in the Finance Bill 2023 and the Budget Policy Statement. This proposal was made during the American Chamber of Commerce (AmCHAM) Summit held on March 29th and 30th, 2023, in Nairobi. In a Cabinet dispatch dated July 18th, 2023, the Kenyan Cabinet approved the President’s proposal. The dispatch stated that the rationale for scrapping the 30% requirement is “part of the reforms to enhance Kenya’s overall ease of doing business index while also fortifying legislative consistency in the governance framework for foreign investments. The policy shift is geared towards facilitating technology and knowledge transfer as well as aiding the expansion of the digital economy by positioning the country for increased foreign investments in technology as envisioned in the Administration’s Bottom-Up Economic Transformation Agenda (BETA).”

Following Kenya’s Cabinet approval of abolishing the mandatory local shareholding requirement in the ICT sector, Elon Musk launched his satellite Internet firm, Starlink, in Kenya on July 19th, 2023. Starlink partnered with a local internet company, Karibu Connect, as its first authorized distributor in Kenya. The launch made Kenya the sixth African country to be explored for business by Starlink after Nigeria, Mozambique, Mauritius, Rwanda, and Comoros. Shortly after the launch of Starlink, United States (US) Ambassador Meg Whitman attended the 8th Devolution Conference in Eldoret. In her address, she strongly pitched Kenya as Africa’s best investment destination for the international community. The envoy did not hide her enthusiasm about Kenya’s investment prospects and climate, describing the country as the region’s ICT Hub and gateway to East Africa.

Local Shareholding Requirements in Other Sectors:

  • Engineering: The Engineering Technology Act No. 23 of 2016 requires a foreign firm to be incorporated in Kenya and have a minimum local shareholding of 51% to be registered as an engineering consulting firm.
  • Aviation: Regulations 5 and 12 of the Civil Aviation (Licensing) require a prospective licensee to be a Kenyan citizen or, if a body corporate or a partnership, to have at least 51% of its voting rights held by the Kenyan government, a Kenyan citizen, or both.
  • Private Security: The Private Security Regulation Act, 2016 mandates a prospective license holder to have a minimum of 25% local shareholding.
  • Pension Funds/Schemes: The Retirement Benefits Act, 1997 requires at least 60% of the paid-up share capital of a scheme administrator to be held by Kenyan citizens unless the administrator is a bank or an insurance company.
  • Shipping: The Merchant Shipping (Maritime Service Providers) Regulations, 2011 require an applicant for a license to be a Kenyan citizen or, if a body corporate, to have at least 51% of its share capital held by Kenyan citizens.
  • Insurance: The Insurance Act (CAP 487) stipulates that not less than one-third of the paid-up share capital of an insurance company must be owned by citizens of the states forming the East African Community or wholly owned by the Kenyan government.
  • Mining: Under the previous Mining Act, a mining license applicant needed 35% local shareholding for a mineral right. The 2016 Mining Act allows the Cabinet Secretary to set capital expenditure limits. If a licensee’s planned spending surpasses this limit, they must list 20% of equity on a local stock exchange within three years of production start. Small-scale operations tied to mineral rights are limited to Kenyan citizens or bodies corporate with 60% local shareholding.
  • Capital Markets: The Capital Markets (Foreign Investors) Regulations require every legal entity that offers securities to the public or a listed company to reserve at least 25% of its ordinary shares for investment by Kenyan citizens.
  • Financial Institutions: The Banking Act (CAP 488) also imposes specific local shareholding requirements.

We hope this information is helpful in understanding the 30% local shareholding requirement in the ICT sector and the effects of its abolishment in Kenya. Please note that the contents of this newsletter are intended to provide a general guide to the subject matter and should not be relied upon without legal advice on its contents.

For further information or legal assistance on compliance or any other legal issue, please contact us at info@wka.co.ke, wakilihub.co.ke/, +254 798 03 580, Nairobi Hub: Parklands, Valley View Business Park, 6th Floor, City Park Drive, Off Limuru Road.

Authors:

  • Founding Partner: William Karoki
  • Lawyer: Florence Mwende