Gazettement of Additional Land Parcels with Respect to the Nairobi Land Registration Unit

Posted on September 10th, 2021

Further to our legal alerts issued on 13th January 2021 and 6th April 2021, we wish to inform you that on 16th July 2021, the Ministry of Lands and Physical Planning (the Ministry) issued Gazette Notice 7146 of 2021(the Gazette Notice), which revoked Gazette Notice Numbers 11348 of 2020 and 520, 1706 and 1707 of 2021 on conversion and migration to new parcel numbers with respect to the Nairobi Land Registration Unit.

Consequently, please note that Gazette Notice 7146 of 2021 is the only subsisting conversion list from the Ministry. Additionally, the Gazette Notice stipulates that all transactions or dealings pertaining to the listed parcels shall be carried out in the new registers from 1st November 2021. As such, the proprietors of the listed parcels will acquire new titles to enable future effective dealings in their properties.

The public has been invited to scrutinize the parcels listed in the Gazette Notice and where a person is dissatisfied with information contained in the Gazette Notice, the grievance mechanisms provided under the Land Registration (Registration Units) Order of 2017 promulgated under section 6 of the Land Registration Act, 2012 are available.

Further, any person aggrieved by the information in the conversion list, or the cadastral maps contained in the Gazette Notice, may lodge a complaint with the Registrar within ninety (90) days of Gazette Notice’s publication. The aggrieved person may also register a caution pending the clarification or resolution of the complaint. Lastly, an aggrieved party may appeal the decision of the Registrar in Court.

From the foregoing, concerned proprietors are advised to exercise vigilance, to peruse and comply with the Gazette Notice in order to facilitate a smooth transition of their respective properties’ records. Members of the public are also advised to peruse the conversion list so as to confirm whether they have any interest in any of the listed parcels. If so, they should promptly liaise with the respective proprietors for the necessary compliance.

Please click here to download the alert.


This alert is for informational purposes only and should not be taken as or construed to be legal advice. If you have any queries or need clarifications with respect to this alert, please do not hesitate to contact Pamella Ager (pamella@oraro.co.ke), James Kituku, Partner (james@oraro.co.ke) or Anna Kandu (anna@oraro.co.ke) or your usual contact at our firm.

AB David Africa Wins the Africa Law Firm of the Year – Large Practice Award

Posted on September 6th, 2021

6th September 2021

AB & David Africa has been named a winner of the flagship award “African Law Firm of the Year – Large Practice” at the 2021 edition of the Africa Legal Awards hosted by Legal Week and the Corporate Counsel Association of South Africa (CCASA). The announcement was made at an online event held on September 3, 2021.

The award is set out to recognise exceptional achievement from Africa’s legal community.

The Chairman and Senior Partner of the firm, David Ofosu-Dorte, remarked “It feels good to win this award at this time of Africa’s growth, especially as it coincides with the implementation of the AfCFTA and the unfolding events of the new decade”.

In 2015 AB & David Ghana won the Africa Law Firm of the Year – Small Practice and the CSR, Diversity, Transformation and Economic Empowerment Award. In addition, the firm was highly commended in the category of the Transportation and Infrastructure Team of the Year.

Again in 2016, the firm won the Africa Law Firm of the Year – Small Practice and was nominated in a number of other categories.

This prestigious 2021 award also follows the recent expansion of the group into Kenya with Oraro Company Advocates joining the group as an affiliate member.

In addition to its 6 offices (headquartered in Ghana), the firm has a network of firms in 24 African countries and continues to remain committed to its mantra of One Continent, One Law Firm.

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Profile

Established 44 years ago by George Oraro SC (one of Kenya’s top litigators), Oraro & Company Advocates is a top-tier, full-service Kenyan law firm providing specialist legal services both locally and regionally in Arbitration, Asset Tracing & Recoveries, Banking & Finance, Capital Markets, Conveyancing & Real Estate, Corporate & Commercial, Dispute Resolution, Employment & Labour, FinTech, Infrastructure, Projects & PPP, Restructuring & Insolvency and Tax. The Firm has over the years developed a distinguished reputation which has seen it and its Partners recognised by leading international directories such as Chambers Global, Legal 500 and IFLR1000.

Kipkirui Kosgei

Head of Business Development

T: +254 709 250 000/709 250 735

E: gkosgei@oraro.co.ke

The National Hospital Insurance Fund (Amendment) Bill, 2021

Posted on August 9th, 2021

Proposed Provision for Amendment Proposed Amendment Our Comments
Title The Bill proposes to amend the title to the Act by adding the establishment of the National Health Scheme to the objects of the Act. This increased functionality is aimed at ensuring that the National Health Insurance Fund (the Fund) makes significant efforts at attaining Universal Health Coverage.
S. 1 The Bill proposes to define a child as a person who has not attained the age of 18 years and includes a posthumous child, stepchild, adopted child and any child to whom the contributor stands in loco parentis that has not attained the age of eighteen (18) years.

 

This definition would exclude persons who are over the age of eighteen (18) years and are students or indentured or are not employed and are dependent on the contributor. Also excluded from the definition of child would be persons with disabilities who are wholly dependent on and living with the contributor. These persons are proposed to be defined as beneficiaries in the Act, hence making the proposed amendment in line with the Constitution and the Children’s Act.
S. 5(1) The Bill proposes to introduce empanelled healthcare providers, who would replace “declared hospitals”. The criteria for the empanelment and contracting of healthcare providers for the purposes of the Act shall be set by the Minister of Health and the National Hospital Insurance Fund Management Board (the Board). This is a change from the current system of using “declared hospitals” to venture into the use of empanelled and contracted healthcare providers. The working of this proposed system is unclear as at now, and it is expected that the regulations to be promulgated by the Minister might shed more light on this.
The functions of the Board are proposed to be expanded to include facilitating the attainment of Universal Health Coverage including communication and stakeholder engagement. This is one of the pillars of Vision 2030 as well as a part of the President’s Big 4 Agenda and is set to be achieved through the National Health Insurance Fund, therefore including it in the functions of the Board is a move towards prioritising the aim given that 2030 is not too far off.
S. 9 The Bill provides for the Chairman and other members of the Board other than the Chief Executive Officer (CEO) to have their sitting allowances or other remuneration paid out of the Fund. The amount shall be determined by the Board and other relevant government agencies. The Act currently provides for this remuneration but only with the Board deciding in consultation with the Cabinet Secretary in charge of health. It does not provide for the sources of the funds. Therefore, the proposed amendment would give clarity on this issue as well as increased accountability when it comes to making the payments.
S. 10 It is proposed to have a CEO recruited competitively by the Board and other relevant agencies, who shall be an ex-officio member of the Board with no voting rights. The CEO shall deal with the day-to-day management of the Fund and shall serve for a term of three years, with eligibility for reappointment for a further and final term of three (3) years.

The qualifications of the CEO are also indicated as follows:

  • Having a Bachelors’ degree from a university recognized in Kenya;
  • Having at least ten (10) years’ experience at a senior management level with skills in health insurance, health financing, financial management, health economics, healthcare, administration, law, or business administration; and
  • Meets the requirements of Chapter 6 of the Constitution which provides for the integrity requirements for public officers.
This proposal is clearer than the current provisions of the Act, which neither provide for the qualifications, term of service and accountability threshold in the appointment of the CEO.
S. 10A The Bill proposes the recruitment of a qualified person to serve as the Secretary to the Board. The Act currently provides for the CEO to serve as the Corporation Secretary to the Board. The functions of the Corporation Secretary shall be as follows:

  • Issue notices for Board meetings in consultation with the CEO;
  • Keep custody of records of the deliberations, decisions and resolutions of the Board;
  • Transmit decisions and resolutions of the Board to the CEO for execution, implementation and other relevant action;
  • Provide guidance to the Board on their duties and responsibilities on matters relating to governance; and
  • Perform such other duties as the Board may direct.
The Act currently does not provide for a Secretary to the Board, therefore this proposed amendment would fill that gap. Further, specifically providing for the functions of the Secretary would also give clarity to the holder of that office as to what their role would be and provide room to hold them accountable should they not fulfil it.
S. 11 This section empowers the Board to appoint officers, inspectors and servants on terms and conditions that the Board shall determine. The Bill proposes to amend this section such that the officers, inspectors, and servants will be collectively referred to as “staff”. This term would allow for the Board to recruit the employees it needs to serve the Fund as needed, without limiting their designation.
S. 12 The Bill proposes to provide for a common seal for the Board, which shall be kept in the custody of the Corporation Secretary and is not to be used except on the direction of the Board. When the common seal is affixed, the Chairperson, CEO or any other person authorised in that behalf by a Board resolution may authenticate it. The Act currently does not clarify the persons that are to authenticate the use of the common seal on behalf of the Board. This proposed amendment would address this lack of clarity. Further, there is also a measure of accountability since the only way any other person other than the Chairperson or CEO can authenticate the common seal is through a Board resolution.
S. 15

 

 

The Bill proposes to have employers whose employees are liable as contributors to the Fund to also be contributors to the Fund. Employers shall make a matching contribution equal to that made by their employee. This shall be a mandatory contribution. The Fund’s Strategic Plan for the period 2018 – 2022 emphasises increased funding, which is geared at enhancing access to healthcare and improved service delivery. This is in line with Vision 2030 and the President’s Big 4 Agenda, which includes affordable healthcare. Therefore, the Fund has come up with these proposals on how to increase its funding. Having found that voluntary contributions have not achieved this aim, the next step is to make contributions mandatory.
The Bill also proposes to have the national government liable as a contributor to the Fund on behalf of the indigent and vulnerable persons identified as such by the relevant government body. The national government’s contribution shall be a special contribution that shall be determined by the Board in consultation with the Minister. This is also proposed to be a mandatory contribution. Employers and the government would have to shoulder this burden to ensure the achievement of these goals should this proposed section be passed into law.
The Bill also proposes to provide for enhanced benefits for members who make voluntary contributions to the Fund. This is also a means of increasing contributions to the Fund as well as services available to contributors and beneficiaries.
The Bill proposes to empower the Minister to make regulations for the better carrying out of this section that it proposes to amend. The passing of regulations by the Minister would provide further details and clarity in terms of operationalizing the Act.
S. 15A The Bill proposes the mandatory registration of all persons who have attained the age of eighteen (18) years that are not beneficiaries under the Act. This proposal is geared at increasing contributions to the Fund. Currently, all Kenyans that are employed and earning at least KES. 1,000 are to be contributors to the Fund. Further, registration by persons who are self-employed is on a voluntary basis. Should this proposed amendment be passed into law, all adult Kenyans, who are not beneficiaries, regardless of whether they are employed or not, would have to be registered under the Act. The indigent and vulnerable persons shall have their contributions paid for them by the government. Enforcement is likely to be a challenge for this proposed section, especially noting that failing to register under the Act has not been proposed to be an offence.
The Bill proposes that the Minister of Health shall make regulations for the better carrying out of the above subsection. It is not clear how the Fund intends to implement this mandatory contribution requirement. Therefore, it is important to enact regulations that will clarify the operationalization of this law.
S. 16 The Bill proposes to protect employees from having to pay the matching contributions in place of their employers. This is through prohibiting employers from deducting this matching contribution from their employees’ salary or other remuneration. Further, the employer would be obliged to pay such contribution in their capacity as an employer. This proposed section is meant to ensure that only employers pay the matching contribution and not subject employees to an additional burden.
The Bill proposes to have employers make matching contributions, where unpaid, only from the time the contributor becomes their employee and not pay it if after all other statutory deductions have been made, the remainder is insufficient to pay that contribution. This therefore means that the term “matching contribution” is given a literal meaning such that if the employee does not make a contribution, then the employer will also not be obliged to make a contribution.
The Bill proposes to delete paragraphs (b) and (c) of subsection (3), which provides for an employer to obtain an NHIF card for their employee where it is lost, destroyed or the employee has not given it to the employer. Further, paragraph (c) obliges the employer to retain the card of the employee except when the employee requires it to make a claim or benefit under the Act. This is a step towards greater practicality. For example, where emergency medical treatment is needed, it would be impractical to require the employee to seek out their employer to get the NHIF card for the purposes of seeking treatment.
The Bill proposes to delete subsection (4) and substitute it with another providing that the sum deducted from the salary or other remuneration of an employee by his/her employer is not recoverable from the employer by the employee once that contribution has been remitted to the Fund. Currently, the subsection reads that the amount is not recoverable once a stamp to the value of that sum has been affixed to a card issued to that person and duly cancelled. Since the use of stamps to prove payment is no longer applicable today, the amendment of this subsection is necessary.
The Bill proposes to amend subsection (6) such that it provides for a penalty for employers for failure to pay both standard and matching contributions into the Fund and imposes a penalty of KES. 1 million upon conviction for failing to make the payment within the time and manner provided for in the Act. This is an effort to promote compliance on the part of employers for both matching and standard contributions. Increasing the penalty from KES. 50,000 to KES. 1 million is also meant to have a deterrent effect on employers.
 

S. 18

On the penalties for late payment of contributions, the Bill proposes to have them applied not only to standard but also to matching contributions. The proposed penalty shall be equal to twenty-five per cent (25%) of the contribution. Currently, the Act provides for a penalty of twenty-five per cent (25%) of the contribution when it comes to micro and small enterprises, while applying a penalty of twice the amount of the contribution to all other entities. This proposed amendment, if passed into law, will have the effect of harmonizing penalties in all classes of enterprises.
For employers, they shall be liable to pay the penalty above, as well as the costs incurred by the employee when seeking treatment from a contracted health care provider during the period when the contribution is due. This penalty is also meant to have a deterrent effect on employers who might be considering defaulting on their contributions to the Fund. Further, it is meant to ensure that employees have access to healthcare services in any case.
The Bill proposes that the mandatory contributions of contributors who are outside the country on the day their standard or mandatory contributions fall due be payable on the day of their return to the country. This amendment would provide some reprieve for contributors who are outside the country when their contributions fall due.
S. 19 The penalty for failing to make special contributions on the part of contributors who are required to make them when due is proposed to be equal to fifty per cent (50%) of the amount of contribution for each month during which the contribution remains unpaid and is recoverable as a sum due to the Fund and when recovered shall be paid into the Fund. This penalty is a reduction from the current penalty of having to pay five (5) times the amount of the contribution for each month it remains unpaid. Perhaps the Fund expects that this will encourage an increased uptake of enhanced benefits through the payment of voluntary contributions.
S. 21

 

The Bill proposes to delete and replace this section with another that provides for the mode of identification of a beneficiary considering the existing legal framework for national registration. For the purposes of payment of contributions, the Bill proposes that the Board may require a contributor to furnish the Board with information or particulars or other documents necessary for the purpose of identification. The mode of identifying contributors or beneficiaries is currently through a card, which is given to the contributor after contributing for some months. The provision seeks to find an alternative method of identifying beneficiaries.
The Bill also proposes making it an offence to knowingly make a false statement relating to liability to remit a standard or matching contribution as well as failure to furnish information or particulars or produce a document when refusing or neglecting to do so without reasonable cause. The proposed penalty on conviction is a fine not exceeding KES 1 million or imprisonment for a term not exceeding twelve (12) months, or to both. This amendment includes matching contributions. Further, a maximum fine of KES. 10,000 is imposed or imprisonment for a term not exceeding six (6) months. This penalty is intended to operate as a deterrent.
Evidence of payment of contributions shall be deemed conclusive if the person liable to pay the contribution has a record of remittance of the contributions and in the case of a standard contribution, a record of the contributor’s monthly payslip that the contribution has been deducted from his/her salary. The proposed amendment seeks to update the type of evidence of payment of contribution as it is currently a stamp, receipt, record of payment in the register of contributors to the Fund, and the contributor’s monthly pay slip.
S. 22

 

The Bill proposes to have the Board pay from the Fund, a benefit to an empanelled and contracted healthcare provider for an expense incurred by the provider for the provision of health care services to the number of beneficiaries determined by the Board. Currently, the Act provides for payments to declared hospitals for expenses incurred by any contributor, his/her named spouse, child or other dependant. This is a move from declared hospitals to empanelled and contracted healthcare providers.
The Bill proposes to delete subsection (2), which provides for the Board paying for the medical or health care expenses covering both inpatient and outpatient medical healthcare.

 

The Fund seeks to limit its expenditure and use this amendment as a means of doing so, more so because the proposed amendment leaves out the expenses that the Fund would cover.
The Bill proposes to delete subsection (3) and substitute it with another, which provides for subjecting the benefits payable from the Fund to such limits, regulations, and conditions that the Board may prescribe and in consultation with the Cabinet Secretary. The Act currently provides for the limits set to what shall be paid out of the Fund i.e. drugs, laboratory tests and diagnostic services, surgical, dental or medical procedures or equipment, physiotherapy care and doctors’ fees, food and boarding costs. Under the proposed provision, the benefits payable will be prescribed in regulations that will follow.
The Bill proposes to delete subsection (4) which provides that no claim or benefit is payable unless the contributor has been making payments and produces this evidence at the time of making the claim or seeking the benefit as well as the card. This proposal is in line with the aim of the Bill to stop using cards for identification purposes when making claims or benefits.
The Bill proposes to add a subsection (5), which provides that where a beneficiary has a private health insurance cover, the private health insurance shall be liable for payment up to the limits the beneficiary is covered and that the Fund shall pay the daily rebate for inpatient. Further, the Fund shall cover the outstanding bill where the private insurance cover’s limits have been exhausted subject to the Fund’s applicable limits. Currently, the Fund tends to be the primary insurer for most people who are co-insured members. Therefore, this move is meant to reduce the Fund’s burden as far as payments and benefits are concerned.
S. 23 The Board is proposed to avail a statement of accounts to a contributor, or a person who is liable to remit standard and matching contributions on their contributions. Currently, for one to get a receipt of payment, they are required to present their card to an officer of the Fund. This is outdated as the Fund uses electronic and mobile payment systems, hence the need to keep the Act up to speed with current norms.
 

S. 24

S. 25(2)(b) & (c)

 

S. 26(a)

The Bill proposes to repeal this section, which provides for the printing and sale of National Hospital Insurance stamps at such prices as the Board may from time to time determine.

Further, the Bill proposes to delete the paragraphs providing for offences related to the use of cards or stamps.

The Bill provides for regulations relating to the issue of any stamps or the replacement of cards under the Act.

If the Bill is passed, stamps and cards shall no longer be used as evidence of contribution; making them obsolete hence requiring the repeal of this section 24; paragraphs (b) and (c) of section 25(2) and section 26(a).
S. 25

 

 

 

 

Subsection (1) provides for offences relating to benefits under the Act i.e. making false statements for the purpose of obtaining a benefit under the Act with a penalty of a maximum of KES 500,000 or to an imprisonment term not exceeding twenty-four (24) months. The Bill proposes to increase it to KES 10 million or to an imprisonment term of sixty (60) months. Concerns have been increasing over the fraud perpetrated to access the benefits of the Fund and the payments from the Fund as well, hence the need to increase the penalties for the same. This amendment is expected to have a deterrent effect and reduce the instances of fraud.
Subsection (2) provides for the offence of impersonating any person whether living or dead with the intent to obtain the payment of any benefit. The Bill proposes to increase the imposed penalty from KES. 500,000 or to an imprisonment term not exceeding three years to KES. 10 million, with the imprisonment term remaining unchanged.
The Bill proposes to delete subsection (5) and replace it with one that obliges the Board to cause the name of every health care provider removed from the register to be notified in the Gazette and at least three newspapers with nationwide circulation. This proposal seeks to widen the publication of this removal to include at least three newspapers with nationwide circulation. It is important for beneficiaries and contributors to know which hospitals have been removed from the register so that they will not seek services from them.
The Bill proposes to add a section 5A, which provides that a health care provider removed from the register shall not be entitled to receive any benefit from the Fund. The Act currently provides for this. The proposed amendment results in a rearrangement of the sections of the Act.
S. 26(d) The Bill proposes to remove the need for the Board to make regulations on rebates for contributors who have no dependants or who fulfil such other conditions or requirements as may be prescribed in cases of voluntary contributions. The rebates would be given at the discretion of the Board, if at all, to contributors without them having to fulfil certain conditions or be part of a certain class of contributors. However, the regulations that the Board may come up with would determine if there are any conditions precedent that would have to be fulfilled to get the rebates.
S. 30

 

 

The Bill provides for the obligation of the Board to consult the relevant accredited bodies and subsequently publish in the Gazette, a list of empanelled healthcare providers for the purposes of this Act.

The Bill proposes to delete subsection (2) and replace it with another which provides that the Gazette notice above may be accompanied by conditions relating to the fees which may be charged by the healthcare provider to any contributor under the Act.

This is to replace declared hospitals and excludes the Chairperson of the Medical Practitioners and Dentists Board from the process of consultation. Further, the proposed amendment would make this a mandatory obligation. It is currently discretionary.
The Bill proposes to give the Board the discretion to revoke, at any time, an empanelment under this section. Currently, the Act provides that the Board must consult the Minister of Health before revoking any declaration under the Act i.e. declared hospitals. This proposed amendment, if passed, would give the Board greater independence and power in relation to revoking an empanelment and may assist in enhancing efficiency.
The Bill proposes to include a subsection (4) which would oblige the Board to make regulations for the better carrying out of section 30 on the empanelment of healthcare providers. As stated in the foregoing, this system of using empanelled healthcare providers is new and the regulations are necessary to enhance clarity when it comes to actual operationalization.
S. 32

 

The Bill proposes to amend this section on the inspection of declared hospitals, to replace the words “declared hospitals” with “empanelled and contracted healthcare provider”. This proposed amendment would regularise the use of terms under the Act since the Bill proposes to phase out the use of the term “declared hospitals” under the Act.
In subsection (3) on the offences of obstructing an inspection or refusing to answer questions or furnish information, the penalty upon conviction is proposed to be enhanced to KES 1 million or an imprisonment term not exceeding twenty-four (24) months. These proposed amendments seek to increase the deterrent effect of the penalties and hence increase compliance with the law.
The Bill also proposes to enhance the penalty for an inspector giving false information to a fine not exceeding KES 10 million or an imprisonment term not exceeding sixty (60) months or to both.
S. 34 The Bill proposes to increase the scope of the use of the Board’s investment funds to include the acquisition of supportive infrastructure for empanelled and contracted healthcare providers. Further, the Bill also proposes to have the Board determine the financial viability of healthcare providers that the investment funds may be applied to in the improvement of any underserved area without including the Minister of Health. This widened scope might increase the Board’s capabilities in increasing the efficiency of healthcare providers. The amendment to the proviso is meant to exclude the Minister of Health from determining underserved areas as far as healthcare providers are concerned. This would give the Board independence from the Minister of Health.
S. 41 The Bill proposes to repeal this section, which provides for the power of the Board to determine whether and when a prosecution may be undertaken for offences committed under the Act. This proposed repeal recognizes that the mandate to prosecute is vested in the Director of Public Prosecutions, and as such the Board cannot be involved in the determining whether or when prosecution shall be undertaken.
S.43 This section provides for the recovery of compensation or damages and refers to the Workmen’s Compensation Act in doing so. The Bill proposes to update this to the Work Injury Benefits Act, 2007 which is the relevant legislation. This amendment would align the Act with the Work Injury Benefits Act, which was enacted in 2007.
S. 45 This section provides for a general penalty for offences under the Act which may not have a penalty applied to them. The penalty is currently a fine not exceeding KES 50,000 or an imprisonment term not exceeding two years or to both and is proposed to be increased to KES 1 million. The Bill does not propose to increase the prison term. The proposed amendment seeks to increase the deterrent effect of the penalties and hence increase compliance with the Act.
Second Schedule The Second Schedule to the Act, which provides for the Conduct of Business and Affairs of the Board, is proposed to be amended in paragraph 4 by providing that the quorum for meetings of the Board is two-thirds of the members. Currently, the quorum is nine (9) members, with Board members being thirteen (13) in total excluding the Chief Executive Officer.

Leading Kenyan Law Firm Oraro & Company Advocates Announces Partnership and Senior Associate Promotions

Posted on August 3rd, 2021

3rd August 2021

Leading Kenyan law firm, Oraro & Company Advocates is proud to announce the promotion of four advocates. The promotions have been made across the firm’s commercial and dispute resolution (employment & labour) practice areas.

The promotions are effective August 1, 2021.

James Kituku, highly experienced advocate in banking, finance, conveyancing and  real estate matters, has been admitted into the Partnership after working at the firm for the last eight years in Associate and Senior Associate roles. He holds a wealth of transactional experience, having been involved in high-ticket deals over the years which span across corporate lending, commercial & residential real estate projects, transfer of land, project finance, among others.

Associates Sandra Kavagi, Sheila Nyakundi, and Anne Kadima have been promoted to Senior Associate level.

Largely specialising in employment & labour law, Sandra Kavagi has over seven years of experience advising local and international clients in such sectors as education, financial services, and public entities. Sandra has developed strong expertise in contentious and advisory work in employment & labour. She also has extensive experience in handling banking and commercial litigation, constitutional law, environmental law, election petitions, fraud and land disputes.

Similarly, Anne Kadima, from the Dispute Resolution Department who specialises in employment & labour law, has been promoted to Senior Associate position after working at the firm for over five years, having joined as a pupil. Anne is also well-versed in banking and commercial litigation, defamation, and shareholder disputes.

From the Commercial Department, Sheila Nyakundi, with over seven years of experience, has been promoted to a Senior Associate. Sheila is well versed in advising on commercial contracts, due diligence, mergers & acquisition, corporate restructuring and reorganisations from target sectors such as construction, financial services, and manufacturing and industries.

Commenting on the promotions, Pamella Ager, the firm’s Managing Partner, noted that “these promotions are well-deserved and emphasize the fact that Oraro & Company Advocates is a firm that rewards hard work and recognises the importance of diversity. I heartily congratulate all the four advocates on their promotions and look forward to their enhanced service delivery and provision of innovative solutions to our clients in their new roles.”

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Kosgei Kipkirui

Head of Business Development

T: +254 709 250 000/735

E: gkosgei@oraro.co.ke

Oraro & Company Advocates Receives Top Rankings in IFLR1000’s 31st Edition

Posted on July 30th, 2021

30th July 2021

We are pleased to announce that Oraro & Company Advocates has once again been recognised for its market-leading strength in IFLR1000’s financial and corporate law rankings.

The firm earned the prestigious rankings for providing legal advisory services in the areas of Financial and Corporate, Project Development: Infrastructure, Project Development: Mining, and Project Development: Power.

Additionally, our Founding Partner, George Oraro SC, and Managing Partner, Pamella Ager, have been ranked as ‘Highly Regarded’ lawyers for their expertise in Project development, M&A and Banking, M&A, respectively. The ‘Highly Regarded’ ranking follows consistent positive client feedback and high recommendation by other lawyers as well as a strong transactional track record.

Published by IFLR1000, the guide to the world’s leading financial and corporate law firms, law firm rankings and lawyer ratings are based on three key criteria: transactional evidence, client and peer feedback.

Please see the IFLR1000 rankings on their website here.

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Profile

Established 44 years ago by George Oraro SC (one of Kenya’s top litigators), Oraro & Company Advocates is a top-tier, full-service Kenyan law firm providing specialist legal services both locally and regionally in Arbitration, Banking & Finance, Conveyancing & Real Estate, Corporate & Commercial, Dispute Resolution, Employment & Labour, Infrastructure, Projects & PPP, Restructuring & Insolvency and Tax. The Firm has over the years developed a distinguished reputation which has seen it and its Partners recognised by leading international directories such as Chambers Global, Legal 500 and IFLR1000.

Kipkirui Kosgei

Head of Business Development

T: +254 709 250 000/709 250 735

E: gkosgei@oraro.co.ke

Appealing Tax Appeals Tribunal Determinations at the High Court: Commissioner of Investigations and Enforcement v Grain Bulk Handlers Limited

Posted on July 28th, 2021

Background

In a Judgement delivered on 17th June, 2021 in Income Tax Appeal No. E005 of 2020: Commissioner of Investigations and Enforcement v Grain Bulk Handlers, the High Court dismissed an appeal by the Commissioner of Investigations and Enforcement (“the Appellant”) against the Judgment of the Tax Appeals Tribunal delivered on 18th December 2019.

Issues for determination

The Appellant raised seven grounds of appeal which the Court summarized as follows to arrive at its determination:

  1. Whether the respondent’s appeal before the Tribunal was filed out of time;
  2. Whether the Tribunal erred in finding that the respondent was not an importer and that no tax was payable on terminal tolerance or that the respondent required a destruction certificate or that the respondent was liable for un-customed goods;
  3. Whether the Tribunal erred in finding that the appellant’s documents were inadmissible; and
  4. Whether the Tribunal erred in holding that the assessment against the respondent was similar to that of its Managing Director.

The Court’s analysis & decision

  1. Whether the Appeal filed out of time (suspension of time by consent)

There was undisputed evidence that after the objection decision, Grain Bulk Handlers (“GBH”) filed a Petition in the High Court in Petition No. 239 of 2012 (the Petition) wherein the High Court suspended the 30-day period for filing an appeal and stayed the proceedings of the Committee. The stay orders were thereafter extended by consent of both parties until determination of the Petition. By this action, computation of time stopped and resumed when the High Court determined the Petition.

After the petition, the GBH appealed to the Tribunal, wherein KRA objected to the appeal on the basis that the GBH’s appeal at the Tribunal was time barred. The Tribunal dismissed the objection.

The High Court found that the appeal at the Tribunal was filed within time given that computation of time was stayed by consent of the parties. As a result, the High Court found that this ground of appeal failed.

  1. Whether the GBH was an importer (question of fact in an appeal)

The second ground was that the Tribunal erred in finding that the GBH was not an importer and that no tax was payable on terminal tolerance (grain loss that occurs during transfer from one vessel to another). KRA further claimed that the Tribunal erred in finding that the GBH did not require a destruction certificate or that it was not liable for un-customed goods.

The High Court noted that S. 56 (2) of the Tax Procedures Act limits an appeal to the High Court to questions of law only. The Court further noted that the exception to the rule was that a question of fact can give rise to a question of law on a lower court/tribunal’s misapprehension of evidence which leads to a bad decision.

On hearing the appeal, the Court found that the KRA failed to demonstrate how the Tribunal’s findings on facts were so perverse that it would amount to conversion of a point of fact into a point of law warranting the High Court’s intervention. In addition, the High Court found that the KRA failed to prove that the GBH imported grains as no tangible evidence was adduced in this regard. Further no evidence was adduced by KRA to support their allegation that GBH had sold grains to third parties. To the contrary there was sufficient evidence adduced by GBH to demonstrate that any grains released to third parties were undertaken upon instructions of their clients with whom they had executed Service Provision Agreements. The claim of dealing with un-customed goods was therefore unsubstantiated. As a result, this ground of appeal failed.

  1. Admissibility and weight of evidence (summary of bank transactions)

KRA argued that the Tribunal erred in finding as inadmissible evidence proving that GBH delivered grains to clients who were not importers. On its part GBH submitted that the Tribunal did not declare the said documents as inadmissible but that they fell short of proving the KRA’s claim that income had been earned from sale of grain as had been alleged.

The evidence relied on by KRA in support of the alleged assessment was a banking summary relating to the GBH’s director and not the GBH itself. Further, the Tribunal found that the banking summary did not disclose the relevant bank details, account name, account number or bear a signature.

The Court agreed with the Tribunal as the documents did not prove that income had been derived from the Respondent’s grain sales and held that this ground of appeal failed.

  1. Appeal on an undetermined matter

Lastly, the fourth ground argued by KRA was that the Tribunal erred in holding that the assessment against the GBH was similar to that against the GBH’s director. The Court determined that the Tribunal did not make any such determination in its judgment and stated that the KRA could not appeal on an issue that was never determined by the Tribunal in the first instance. As a result, this ground of appeal failed.

Based on the above, the Judge dismissed KRA’s Appeal in its entirety with costs to the Respondent.

Grain Bulk Handlers Limited was represented at the High Court by our tax team led by George Oraro SC, Founding Partner, assisted by Renee Omondi, Tax Partner, Wanjala Opwora, Associate and Nzioka Wang’ombe, Associate.

Please click here to download the alert.


This alert is for informational purposes only and should not be taken to be or construed as a legal opinion. If you have any queries or need clarifications, please do not hesitate to contact Renee Omondi (renee@oraro.co.ke), Wanjala Opwora (wanjala@oraro.co.ke), Nzioka Wang’ombe (nzioka@oraro.co.ke) or your usual contact at our firm, for legal advice.

Fresh Thinking Webinar on Data Protection: Overview of the Regulations Concerning Data Protection in Kenya

Posted on July 28th, 2021

Fresh Thinking Webinar on Data Protection

Posted on July 23rd, 2021

Tax Appeals Tribunal Rules Apple Concentrate is not a Beverage: Kenya Breweries Limited v Commissioner of Customs & Border Control

Posted on July 19th, 2021

In a Judgement delivered on 25th June, 2021 in Tax Appeal No. 282 of 2020: Kenya Breweries Limited v Commissioner of Customs & Border Control (2020) eKLR, the Tax Appeals Tribunal (the “Tribunal”) allowed an appeal by Kenya Breweries Limited (“KBL”) setting aside the Commissioner of Customs & Border Control Tariff Ruling dated 5th June, 2020. The Tribunal also asserted that the Apple Concentrate that KBL intended to import for manufacturing Tusker Cider, an alcoholic beverage is classifiable under HS Code 2106.90.20 (food preparations) of the East African Community Common External Tariff, 2017 (CET), thus subject to a lower customs rate.

The main dispute between the parties was the classification of the Apple Concentrate (an ingredient used for manufacturing Cider, an alcoholic beverage). KBL’s position was that the concentrate ought to be classified under Chapter 21 (edible preparations) which attracts a duty rate of 10%. On the other hand, the Kenya Revenue Authority (“KRA”) argued that the Concentrate was classifiable under Chapter 22 (beverages, spirits & vinegar), which attracts a duty rate of 25%.

The Law on Classification of Commodities

The East African Customs Management Act, 2004 (“EACCMA) governs customs administration in the East African Community and the CET governs classification of imported goods for the purpose of duty calculation. The CET ought to be interpreted in accordance with the World Customs Organization (“WCO”) General Interpretation Rules for the Interpretation of the Harmonized System (“GIRs”) and the explanatory notes to the CET.

GIR 1 provides that: “The titles of sections, chapters and sub chapters are provided for ease of reference only; for legal purposes, classification shall be determined according to the terms of the headings and any relative section or Chapter Notes.” Basically, when classifying a commodity, one should first refer to the terms of the headings of that subject then the terms of the Section then the relevant Chapter Notes.

The submissions by the parties

KBL argued, in both its Application for a Tarif Ruling before KRA and before the Tribunal, that the Apple Concentrate was classifiable under HS Code: 2106.90.20 on “Preparation of a kind used in manufacturing of beverages” in Chapter 21 that covers “Miscellaneous Edible Preparation”. KBL through its lead counsel Mr. George Oraro, SC emphasized that KRA ought to have considered the purpose, intended use, and chemical composition of the product in determining the class under which it falls. KBL further emphasized that whereas the Apple Concentrate had an alcoholic percentage of up to 14%, it was not a beverage that could be offered for human consumption in that state thus could not be classified under Chapter 22 of the CET.

KRA, on the other hand, insisted in both its Opinion and Tariff Ruling dated 5th June, 2020 that the product was classifiable under Heading 22.06 on “other fermented beverages (for example, cider, perry, mead, sake) … not elsewhere specified” under Chapter 22 that covers “Beverages, sprits and vinegar”

In KRA’s view, the Apple Concentrate was not classifiable under Chapter 20 (preparations of vegetables, fruit…) or 21 (edible preparations) due to its 14% alcohol content thus classified it under Chapter 22 of the CET. KRA based its position on Explanatory Note (d) to Chapter 20 of the CET that classifies fruit or vegetable juices of an alcoholic strength by volume exceeding 0.5% volume under Chapter 22. Further, KRA argued that the Apple Concentrate was fermented fruit thus classifiable under Chapter 22 that deals with fermented beverages such as cider.

In response to KRA’s arguments, KBL stated that the Apple Concentrate was neither a fruit nor a vegetable thus Explanatory Note (d) did not apply. KBL further argued that it would be unreasonable to insist that the Apple Concentrate is a beverage when it cannot be consumed in its imported state and had to processed to produce Tusker Cider which is fit for human consumption.

The Decision

Having heard the parties, the Tribunal was of the view that GIRs ought to be interpreted in cascading order. GIR 1 is the foremost rule of classification. This means that classification is determined first by the terms of the headings, then the section or chapter notes and other GIRs (if necessary).

The Tribunal further determined that, in establishing the appropriate Tariff Code of a product, one must consider the words of the Section and Chapter titles as a guide and faulted the Respondent for disregarding this basic yet fundamental rule.

Additionally, the Tribunal echoed that in determining classification of products, KRA must give due regard to the purpose and intended use of the product. In this respect, the Tribunal took cognizance of the undisputed fact that the Apple Concentrate was a raw material for manufacturing Cider, an alcoholic beverage. Consequently, the Tribunal found that the Apple Concentrate was not a beverage.

In conclusion, the Tribunal found that KRA had erred in classifying the Apple Concentrate under HS Code 2206.00.10 (Chapter 22) and agreed with the KBL’s argument that the concentrate ought to be classified under HS Code 2106.90.20 (Chapter 21). Accordingly, KRA’s Tariff Ruling dated 5th June, 2020 was set aside and KBL’s Appeal was allowed.

Kenya Breweries Limited was represented at the Tax Appeals Tribunal by our tax team led by George Oraro SC, Founding Partner, assisted by Renee Omondi, Tax Partner, Wanjala Opwora, Associate and Nzioka Wang’ombe, Associate.

Please click here to download the alert.


This alert is for informational purposes only and should not be taken to be or construed as a legal opinion. If you have any queries or need clarifications, please do not hesitate to contact Renee Omondi (renee@oraro.co.ke), Wanjala Opwora (wanjala@oraro.co.ke), Nzioka Wang’ombe (nzioka@oraro.co.ke) or your usual contact at our firm, for legal advice.

Bill Review

Posted on July 13th, 2021

13th July 2021

We are pleased to announce the launch of a new Bill Review portal on our website. Through this portal, we intend to provide useful insights and information on proposed legislation that is under consideration before Parliament. We shall continuously update the resource on a regular basis and provide new content by way of Reviews, Alerts, Articles, Papers and a comprehensive Bill Tracker, from which one can keep tabs with the stage and/or status of the proposed laws.

To visit this new and exciting resource, click the link here.

Kosgei Kipkirui

Head of Business Development

T: +254 709 250 000/735

E: gkosgei@oraro.co.ke

About Us

Oraro & Company Advocates is a full-service market-leading African law firm established in 1977 with a strong focus on dispute resolution and corporate & commercial law. With a dedicated team of 10 partners, 4 senior associates, 10 associates, 1 lawyer and 36 support staff, the Firm has been consistently ranked by leading legal directories such as Chambers Global, IFLR 1000 and Legal 500 as a top-tier firm in Kenya.

Oraro & Company Advocates is an affiliate member of AB & David Africa.

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