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

Way to Go: Exhaustion of Alternative Remedies and Exceptional Circumstances in Judicial Review

Posted on May 31st, 2021

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Historically, the basis of judicial review in Kenya was derived from the Law Reform Act (Cap. 26) Laws of Kenya and Order 53 of the Civil Procedure Rules, 2010 as better developed by case law on the area. On this basis, judicial review was limited to ensuring compliance by administrative bodies with the principles of proportionality, legitimate expectation and reasonableness in the carrying out of their functions.

However, the promulgation of the Constitution of Kenya, 2010 (the Constitution) brought with it Article 47 which expressly provides for the right to fair administrative action that is expeditious, efficient, lawful, reasonable and procedurally fair. In operationalising Article 47, Parliament subsequently enacted the Fair Administrative Action Act, 2015 (the FAAA). The FAAA has transformed judicial review in Kenya by expanding its scope from a review of the decisions of only public entities or administrative bodies, to include any person, body or authority which exercises a judicial or quasi-judicial function.

In this article we shall look at section 9 of the FAAA, which provides for the procedural aspect of judicial review applications by delineating the circumstances under which one may institute such proceedings. We will then examine the exceptional circumstances that might allow a party to bypass a prescribed statutory remedy and pursue a judicial review remedy through Court instead.

Statutory Remedies

Section 9 (1) of the FAAA provides that a person aggrieved by an administrative action may apply for judicial review of such a decision in the High Court or a subordinate court upon which original jurisdiction is conferred pursuant to Article 22 (3) of the Constitution. However, section 9 (2) of the FAAA limits this avenue of redress by providing a specific threshold to be satisfied whereby administrative action is only subject to judicial review if alternative mechanisms (including internal mechanisms for appeal or review), as well all remedies available under any other written law, are first exhausted.

Section 9 (2) of the FAAA may be viewed as a codification of the doctrine of exhaustion of administrative remedies. In applying the said doctrine, the Court of Appeal in the case of Geoffrey Muthinja & another v Samuel Muguna Henry & 1756 others (2015) eKLR, stated that the requirement is in conformity with Article 159 of the Constitution as it encourages the use of alternative dispute resolution. Of note was the Court’s holding that:

“It is imperative that where a dispute resolution mechanism exists outside Courts, the same be exhausted before the jurisdiction of the Courts is invoked. Courts ought to be the fora of last resort and not the first port of call the moment a storm brews… as is bound to happen. The exhaustion doctrine is a sound one and serves the purpose of ensuring that there is a postponement of judicial consideration of matters to ensure that a party is first of all diligent in the protection of his own interest within the mechanisms in place for resolution outside of Courts.”

For the above reason, a Court before which an application for judicial review is placed often satisfies itself, before seizing jurisdiction, that the parties seeking its intervention have first exhausted the prescribed statutory mechanisms for redress. In the case of Aly Khan Satchu v Capital Markets Authority (2019) eKLR, the High Court (Mativo, J) quashed the decision of the Capital Markets Tribunal on the basis inter alia, that the Tribunal that rendered the impugned decision was not properly constituted and that the applicant had not satisfied the ecxceptional circumstances requirement under section 9 (4) of the FAAA. Further, in recognizing that the Capital Markets Act (Cap. 485A) Laws of Kenya, provides for an express dispute resolution mechanism, the Court remitted the dispute back to a properly constituted Capital Markets Tribunal.

It is noteworthy that a person aggrieved by the decision of an administrative body prescribed by statute to hear a dispute has recourse to pursue redress in the High Court, either as a consequence of a provision of the statute providing for an appellate procedure to the

High Court, or in exercise of the Constitutional right of access to justice. An appeal procedure under statute ordinarily clothes the High Court with appellate jurisdiction which is often confined to determining the propriety of both the decision making process as well as a limited review of the merits of the decision itself.

It is also important to note that administrative bodies created under statute are intended to be constituted by persons who are specially trained or have knowledge in the field in question. This ensures that any grievance arising under the statute is heard by persons who are uniquely qualified to handle the issues at hand and who have the ability to foresee the implications of any decision made.

Exceptional Circumstances

In order to address unique and peculiar circumstances, the Courts have recognised exceptions to the doctrine of exhaustion of remedies, which exceptions are also provided for under the FAAA. Section 9 (4) of the FAAA provides that in exceptional circumstances, and on application by a party, the Court may exempt such party from the obligation of exhausting alternative remedies if the Court considers such exemption to be in the interest of justice. The exceptional circumstances are not outlined in the Act, thus leaving the Courts to exercise their discretion when faced with an application for exemption.

The High Court in the case of Krystalline Salt Limited v Kenya Revenue Authority (2019) eKLR expressed its view on the definition of “exceptional circumstances” as follows:

What constitutes exceptional circumstances depends on the facts and circumstances of the case and the nature of the administrative action at issue. Thus, where an internal remedy would not be effective and/ or where its pursuit would be futile, a court may permit a litigant to approach the court directly. So too where an internal appellate tribunal has developed a rigid policy which renders exhaustion futile.

The Fair Administrative Action Act does not define ‘exceptional circumstances’. However, this court interprets exceptional circumstances to mean circumstances that are out of the ordinary and that render it inappropriate for the court to require an applicant first to pursue the available internal remedies. The circumstances must in other words be such as to require the immediate intervention of the court rather than to resort to the applicable internal remedy.”

In Republic v Council for Legal Education ex parte Desmond Tutu Owuoth (2019) eKLR, the High Court went further to state that in determining whether an exception to internal remedies should be granted in allowing parties to institute judicial review proceedings, the Court must look at whether the internal appeal mechanism available to a party under statute would serve the ends of justice. The Court had previously stated that the doctrine of exhaustion of remedies would not be applied where a party may not have an audience before the forum created, or the party may not have the quality of audience before the forum created which would be proportionate to the interests the party wishes to advance within the suit.

Therefore, a Court is obliged to look at whether the dispute resolution mechanism established under the statute in question is competent in the circumstances of the case to serve the interests of justice, or whether it warrants a party applying for an exemption from the doctrine of exhaustion of remedies.

Of interest, when faced with an application under section 9 (4) of the FAAA, the Courts have looked at the practicality and efficacy of the statutory remedies as well as the nature of the issue at hand when making their decision. For instance, in the case of Republic v Kenya Revenue Authority ex parte Style Industries Limited (2019) eKLR, the Court held that it would grant exemption where it would be impractical to make an application to the administrative body.

For example, where the issue at hand is legal in nature and thus ought to be decided by the Courts rather than an administrative body, the Court would grant the exemption.

Upshot

Our review of case law reveals that parties tend to institute judicial review proceedings in Court for a variety of reasons. It may be that the statutory body that ought to hear the dispute at hand has not been constituted, and yet the dispute is time sensitive in nature, or the nature of the complaint is such that the statutory body cannot render an effective, impartial or dispassionate decision.

However, the downside of pursuing judicial review remedies through Court action is the comparatively longer time that Courts take to hear and determine matters. Another downturn is the fact that judicial review proceedings are restrictive, and save for exceptions, the Courts have been reluctant to delve into a review of the merits of the decision, placing the focus more on the propriety of the decision making process itself.

‘Ad-Sense’: Thoughts on Direct Digital Marketing and Data Protection in the Information Age

Posted on May 31st, 2021

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The rise of the information age has forced businesses to re-evaluate their modes of carrying on business with a key shift in advertising. Advertising is no longer the dominant way to pay for information and culture. What previously was the purview of corporate logic has been replaced by algorithms and informational architecture meant to create a personalised experience for the user. In the heightened noise of marketing, with all fighting for the user’s attention, the temptation to directly engage the user with a targeted and personal advertisement is understandable, yet such engagement often comes at the risk of violating the user’s right to privacy. In this article, we explore ways through which a business can navigate these murky waters and strike a balance between respecting a customer’s right to privacy whilst creating an effective and satisfactory user experience through direct marketing.

Direct Digital Marketing: The Basics

Hamman and Papaodulos define direct digital marketing (DDM) as a system of marketing where the marketer communicates directly with the intended customer over a medium, with the expectation that such interaction will elicit a measured response, often positive. Whereas traditional direct marketing can take various forms such as the use of fliers, DDM involves the use of a digital medium such as a mobile phone, e-mail, television, or web-based platforms for the direct or indirect purpose of promoting a good or a service. Practically, this can take the form of Short Message Services (SMS) alerts sent to a person informing them of the latest offers in a particular restaurant or email alerts notifying a user of an ongoing promotion in a department store.

In Kenya, an attempt to codify the meaning of DDM has been made under regulation 13 of the Draft Data Protection (General) Regulations, 2021 (the Draft Regulations) which are still under consideration. Regulation 13 stipulates that a data processor or controller will be deemed to have used data for commercial purposes where they send a catalogue through any medium which addresses a data subject; display an advertisement on an online media site where a data subject is logged on using their personal data relating to the website the data subject has viewed – this includes the use of data collected by cookies to target users; send an electronic message to a data subject about a sale or other advertising material relating to a sale, using personal data provided by a data subject.

The foregoing definition of DDM casts a wide net as to the possible forms of DDM that may be used by advertisers in marketing. This includes covert methods of targeting audiences such as the use of cookies and data analytics to determine the age, gender and sites visited by a data subject for the purposes of determining which forms of advertisements should be displayed to the user, as well as overt methods such as the use of SMS to target a data subject.

It is critical to note that under the Draft Regulations, a person will not be considered to have utilised a data subject’s personal data for DDM purposes, where the personal data is not used or disclosed to identify or target particular recipients. For instance, the use of data analytics by a data processor or controller for the purposes of estimating the content most viewed by users, or the resources a user sought when using an organisation’s website, would not qualify as DDM. However, should the organisation proceed to either use personal data collected from an analytical review of their website, such as one’s age and gender to then target the user during their next visit to the organisation’s website or to sell that data to an advertiser, then such use would effectively qualify as DDM thus calling for the application of the Data Protection Act, 2019 (DPA).

The Risk

For DDM to be successful, marketers need to address a target audience. To accomplish this, marketers will ordinarily require large volumes of personal data thus the crux of direct marketing. This is premised on the fact that most of the data sought by marketers is often of a personal nature such as details of a person’s name, age, gender, residence, purchase habits or preferences. In most instances, this data is likely to be collected from a consumer’s interaction with the concerned entity or platform. DDM may however present a risk to a marketer, where the marketer obtains a consumer’s personal data without their consent. An example would be the collection of one’s phone number by a hotel while booking one’s accommodation where the hotel uses such information to send promotional messages on their discounted rates, without disclosing to the customer that they intended to use the customer’s phone number for that purpose. As innocuous as such collection, storage and subsequent use might seem, it presents a real legal risk to the enterprise. To begin with, such collection would be a violation of a data subject’s rights under section 26 (1) (a) of the DPA which provides that a data subject has the right to be informed of the use to which their personal data is to be put. Further, these actions would constitute a violation of section 30 (1) of the DPA which prohibits the processing of a data subject’s personal data without their consent. In addition to this, the resultant storage and use of a customer’s data in the example above would be in further breach of the DPA which prohibits the use and storage of personal data without obtaining a data subject’s consent. As such, the enterprise is likely to incur liability for breaching the user’s right to privacy thereby exposing the business to the risk of lawsuits and regulatory fines. The unlawful disclosure of personal data constitutes an offence under the section 72 (1) of the DPA and upon conviction, one would be liable to a fine not exceeding KES 3,000,000 (USD 30,000) or to a term of imprisonment not exceeding ten (10) years or both.

Solutions

a. Obtain consent

Businesses that intend to adopt a DDM strategy should obtain consent from their intended audience before carrying out any advertising campaign. This obligation is founded on the provisions of section 30 (1) of the DPA which imposes the obligation to obtain a data subject’s consent before processing any data upon a data controller or data processor. The above position is further bolstered by the provisions of regulation 14 (1) of the Draft Regulations which sets out the instances in which commercial use of personal data other than sensitive data may be permitted.

Under regulation 14 (1), a data controller or processor would be permitted to use personal data if they meet five (5) conditions. Firstly, the data controller or processor must have collected the personal data sought to be used from the data subject. Secondly, the data subject must be notified that direct marketing is one of the purposes for which the data has been collected. Additionally, the data subject must have consented to such use of their personal data. Further, the data controller or processor must provide an opt-out mechanism for the data subject to not receive the DDM communications.

Generally, opt-out mechanisms allow a data subject to withdraw their consent from the use of their personal data in DDM. Practically, this may be in the form of an unsubscribe button. To effect this, regulation 15 (1) of the Draft Regulations prescribes the features that should accompany an opt-out mechanism. First, opt-out mechanisms must have a visible, clear, and easily understandable explanation of how to opt-out, such as instructions written in simple language and in a font size that is easy to read. Also, opt-out mechanisms must use a simplified process for opting-out that requires minimal time and effort. In addition, opt-out mechanisms must provide a direct and accessible communication channel and be free or involve not more than a nominal cost to a data subject. Finally, the data subject must have not made an opt-out request at the time of the collection, use and/or processing of the data.

b. Use the data obtained for a limited purpose

The obligations of a business entity are not strictly limited to lawfully obtaining data. A business must also ensure that they use the data obtained for the purpose for which it was acquired. Where the initial purpose for which personal data was obtained changes, a data controller may still use the data, subject to obtaining consent from the data subject for the changed use. This is in line with regulation 5 (3) of the Draft Regulations which provides that where the data controller or processor intends to use personal data for a new purpose, it shall ensure that the new purpose is compatible with the initial purpose. For instance, if a business collects a customer’s phone number for the purposes of determining whether payment made through a mobile money payment platform has been effected, the same number should not be used to send out promotional messages. To use such data for a purpose which is not intrinsic to the root purpose would constitute a violation of the data subject’s rights under section 26 of the DPA.

c. Respect the data subject’s rights

A data subject has a right under section 26 (c) of the DPA to object to the processing of their personal data. Examples of this include the sending of SMSs to specific codes calling for the cessation of promotional marketing messages or the clicking of an unsubscribe button on email marketing. It is critical to note that once a customer has objected to the processing of their data, then, any subsequent use of such data becomes unlawful, and the marketer runs the risk of incurring liability for such use. For this reason, once a customer objects to the use and or processing of their data, a business is obliged to comply with the same and cannot continue to use the customer’s data.

d. Adopt data protection by design in devising DDM Strategies

The use of DDM as a marketing strategy involves the collection and subsequent storage of data. Therefore, a business which seeks to adopt DDM must at the very core ensure that its technical and organisational measures are designed at all times to implement the data protection principles in an effective manner and integrate necessary safeguards for the purposes of processing. The above obligation is consistent with the provisions of section 41 (2) of the DPA, which mandates data processors and data controllers to adopt technical and operational measures that implement the data protection principles at the time of determining the means of processing the data and at the time of processing data. Failure to adopt technical and organisational measures that ensure data protection by design, may expose the business to a data breach and potential legal liability. It is thus important for a business to ensure that the technical and operational measures adopted comply with this principle.

e. Notify the data subject in case of breach

If a data breach occurs, the business must first notify the data subject of the breach, the nature of data lost, and the intended remedial action taken up to prevent further loss of data. This obligation is imposed by section 43 (1) (b) of the DPA which mandates a data controller to notify a data subject of any unauthorised access or risk of unauthorised access to the data subject within forty-eight (48) hours. Such notification not only serves to alert the data subject of the expected loss of personal data, but also allows the data subject to take on remedial actions as an end-user such as changing or updating their credentials, which can stave off the worst of attacks.

In conclusion, the use of DDM, whilst a viable and useful method of reaching and engaging with one’s clientele, is often laden with the risk of violating a customer’s right to privacy. To avoid such risk, businesses are advised to adopt a DDM strategy that is alive to the target’s right to privacy and data protection duties and obligations.

Going Paperless: Advent of Digital Land Transactions Systems in Kenya

Posted on May 31st, 2021

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In tandem with the advent of the digital age, states and organisations are moving to adopt modern, open, data-centric and digitally enabled operations and systems. These systems offer many benefits both to the public and private sector including efficiency, cost-saving and convenience. It is on this premise that there is a distinct transition from manual to paperless and digitised records and systems.

Kenya has not been left behind. The Ministry of Lands and Physical Planning (the Ministry) has recognized the need to embark on its own transformative journey. As such, the Ministry has embarked on an initiative to digitise the Registry and the introduction of electronic land transactions systems. This initiative has been named the National Land Information Management System (the NLIMS) which we highlight in this article.

We also highlight the key features of the conversion process under the Sectional Properties Act No. 21 of 2020 (the SPA), an Act which has far-reaching effects on land ownership for developments such as apartments, units and offices.

The Digitisation of Land Records

NLIMS is a digitised land records system aimed at improving service delivery for the general public in relation to land transactions. NLIMS’ objective, as pronounced by the Ministry, is to enhance efficiency, transparency and security of land records, while reducing land transaction costs and opportunities for fraud. This digitised system is set to go hand-in-hand with the other land management developments, creating a platform for the smooth transitioning of other proposed mechanisms.

Legislative Background

The recent milestones in the development of a digitised land registration framework are anchored in various laws and statutes as stipulated below:

a. The Constitution of Kenya, 2010

The Constitution of Kenya, 2010, at Chapter Five deals with matters relating to land and the environment. Article 60 of the Constitution provides that land in Kenya shall be held, used and managed in a manner that is equitable, efficient, productive and sustainable, in accordance with principles such as sustainable and productive management of land resources and transparent and cost-effective administration of land.

b. Land Act, 2012

Pursuant to section 6 (h) of the Land Act, 2012 the Cabinet Secretary is empowered to co-ordinate the development and implementation of a National Land Information System, in collaboration with the National Land Commission. This section has ushered in the advent of the digitised records at the Registry through a contemplated “one-stop shop’’ system.

c. Land Registration Act, 2012

The Land Registration Act, 2012 (LRA) at section 54 (5), aims at streamlining land administrative processes. It stipulates that the Registrar shall register long-term leases and issue certificates of lease over apartments, flats, maisonettes, town houses or offices having the effect of conferring ownership, if the property comprised is properly geo-referenced and approved by the statutory body responsible for the survey of land.

d. Sectional Properties Act, 2020

The SPA at section 13 (2), provides that all long-term sub-leases that are intended to confer ownership of an apartment, flat, maisonette, town house or an office that were registered before the commencement of the SPA, shall be reviewed to conform to section 54 (5) of the LRA highlighted above.

e. Land Registration (Electronic Transactions)

Regulations, 2020

The Land Registration (Electronic Transactions) Regulations, gazetted in July 2020 (the Regulations), provide the framework for the roll-out of an electronic land transactions system. The Regulations provide for the conduct of searches on an electronic system, valuation for payment of stamp duty online and registration of interests in land on the electronic land register. The Regulations also make provision for the execution of instruments using electronic signatures by parties.

The Conversion of Units

In a bid to harmonise legislative provisions specifically in the LRA and SPA, the Ministry is spearheading various initiatives including the conversion of titles. This is being undertaken by replacing old land reference numbers with new title numbers, created under newly established land registration units. The conversion process is set to unify the land registration systems, while conforming to sustainable land management principles.

In this regard, on 7th May 2021, the Ministry issued a Notice (the Notice) stating that it would work towards the conversion of longterm leases registered based on architectural drawings to conform to section 54 (5) of the LRA. The Notice also provides that the Ministry shall no longer register long-term leases supported by architectural drawings to confer ownership. Additionally, registration will be premised on a sectional plan with the property being geo-referenced and approved by the Director of Surveys. We shall keep abreast with any developments on this Notice post publication of this edition of the Newsletter and shall issue further insights on the same as and when necessary.

Sectional Property

Some eight (8) years since the enactment of the land laws in 2012, the newly enacted SPA has come into force, replacing the earlier Sectional Properties Act of 1987. The enactment of the SPA was intended to align registration of sectional properties with current land legislation, noting that the Registered Land Act (Cap. 300) Laws of Kenya (RLA), which substantively governed sectional units under the 1987 statute, was repealed. The SPA has not departed significantly from the RLA. However, the SPA emphasises the aim of regulating and providing for the division of buildings into units that can be owned by individuals, while providing for the use and management of common property. Some of the salient features introduced by the new SPA include:

a. Unexpired Residue of the Term on the Title

The SPA provides that it shall only apply in relation to land that is held on freehold or leasehold title with a residual term of not less than twenty-one (21) years, with an intention to confer ownership.

b. Conversion of Units and Issuance of Certificates of Lease

Where sub-leases intended to confer ownership of an apartment, flat, maisonette, town house or an office and were registered before the commencement of the SPA, the said sub-leases shall be reviewed in order to conform with the provisions of the LRA to the extent that the property is geo-referenced and approved by the Director of Surveys, in order to issue Certificates of Lease within a period of two (2) years.

c. Closure of Old Registers

The SPA also provides that the Registrar shall close the registers made under the Certificate of Title/Lease and register the sectional plan in a sectional plan register. The Registrar shall proceed to open new registers depending on the nature of interest that was in the Title/Lease that was submitted.

d. Restriction of Use and Density

The SPA also introduces restrictions on the by-laws of a corporation under the statute from materially changing the use or density of the common property, without the approval of the relevant county government.

e. Dispute Resolution Mechanisms

The SPA provides for both internal dispute resolution mechanisms through a Dispute Resolution Committee (DRC) and recourse to the Environment and Land Court (ELC) on appeal from the DRC’s decision.

Procedure for Conversion

With regard to the process to be followed for conversion, firstly, all sectional plans submitted for registration will need to be geo-referenced; to indicate the parcel plans, the number identifying the unit, the approximate floor area of each unit, and the user of the units.

Thereafter, the plans must be signed by the proprietor, signed and sealed by the Director of Surveys, registered and a Certificate of Title/Lease issued for each unit.

For purposes of conversion of already registered long-term sub-leases, the owners of the property will be required to submit the following documents at the Registry:

  • A sectional plan
  • The original title document (i.e. head title)
  • The long-term lease previously registering the unit
  • The rent apportionment for the unit

The Registrar may dispense with the production of the original title, if the developer is unwilling or is unavailable to surrender the title for the purposes of conversion. Upon submission of the above, the sectional plan will be registered and the original register closed. A new register will thereafter be opened for each unit, with a registered sectional plan. Finally, a Certificate of Lease shall be issued.

Way Forward

We note that digitisation of land records does not come without its fair share of challenges. Not only does the adoption of technology pose a major challenge due to a cultural heritage of “paper filing”, but several rules and regulations still require approval by the relevant state agencies, to effectively implement a digitised system. Further, the digitalisation of any record management systems including that of land, requires security features that would guarantee the security of land records and boost public confidence.

Moreover, in spite of the developments, there are various concerns around the conversion process. Some aspects of the conversion procedure for instance remain unclear, while the Conversion Guide issued by the Ministry does not exhaustively address the concerns. In this regard, it is noted that the draft Sectional Property Regulations (currently undergoing stakeholder consultation) are under consideration. The Regulations, once promulgated, are set to provide clarity on the processes and documentation required for the conversion process. Until then, stakeholders and the general public remain in the dark on some of the procedures prescribed in the SPA.

Nonetheless, the Ministry must be applauded for the significant steps it has made towards the realisation of an effective land management system, as contemplated under the Constitution. It is the hope of Kenyans that the next steps taken by the Ministry will accelerate and improve the ongoing digital transformation with effective stakeholder participation, to ensure that all views are taken into account.

Before ‘I Do’: Validity and Enforcement of Prenuptial Agreements in Kenya 

Posted on December 11th, 2018

By Georgina Ogalo-Omondi | Jill Barasa

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Issue No. 2 of this newsletter featured an article titled For Better or Worse: A Reflection on the Matrimonial Property Act, 2013 (the Act), in which we explored the salient features of the Act and introduced our readers to section 6(3) of the Act on prenuptial agreements. In the present article, we take a closer look at prenuptial agreements, which are gradually gaining recognition in Kenya as an efficient and cost effective way for couples to iron out, before entering marriage, property rights issues that could arise in the event of separation, divorce or death.

Legal Framework Governing Prenuptial Agreements Article 40(1)(b) of the Constitution of Kenya, 2010 (the Constitution) provides for the right to own property in any part of Kenya either individually or in association with others. Further, Article 40(2)(b), as read with Article 27(4), provides that Parliament shall not enact any laws that permit the State or any person to limit or in any way restrict the enjoyment of any right to own property on the basis of marital status.

Nevertheless, it was not until the enactment of the Act that prenuptial agreements gained official recognition in Kenya. The Act came into force on 16th January, 2014 and repealed the Married Women’s Property Act of 1882, which made no provision for prenuptial agreements. Its main objective is to provide for the rights and responsibilities of spouses in relation to matrimonial property and connected purposes. Section 6(3) of the Act provides that parties to an intended marriage may enter into an agreement prior to their marriage to determine their property rights. Indeed, in the case of MBK v MB (2016) eKLR, the Court was called upon to determine whether an apartment thatnthe defendant had bought prior to the marriage formed part of the
matrimonial property. The prenuptial agreement had only two clauses and provided, inter alia, that any property acquired by either party prior to their intended marriage would belong to that party after marriage. The Court held that since there was no evidence that the parties had agreed that the apartment would form part of the matrimonial property, it followed that the property belonged exclusively to the defendant.

Grounds for Invalidating a Prenuptial Agreement

Section 6 (e) of the Act provides that prenuptial agreements should be entered into freely by the spouses while section 6 (4) states further that a party to a prenuptial agreement may apply to the Court to set aside the agreement on the ground that the agreement was influenced by fraud, coercion or is manifestly unjust. However, the Act is silent on what amounts to fraud or coercion or what would render an agreement manifestly unjust.

It should be noted that common law principles and other laws of England have played an important role in shaping the history of Kenya’s legal framework. Kenyan jurisprudence has continually been influenced by that of England and as a result, English jurisprudence is still influential in Kenya. In fact, it is not uncommon for Kenyan Courts to refer to and apply English cases, particularly to fill gaps in the legislation or where certain matters have only recently been given force of law in Kenya and have not been dealt with in depth by the Courts, as is the case with the provisions on prenuptial agreements under the Act.

In England, the case of Radmacher v Granatino (2010) UKSC 42 provided the first significant judgment about the status of prenuptial agreements. In its judgment, the United Kingdom Supreme Court set out the following factors that increase the likelihood of a prenuptial agreement being binding the parties:

(i) The agreement must be freely entered into.
(ii) The parties must have a full appreciation of the implications of the agreement.
(iii) It must not be unfair to hold the parties to their agreement in the circumstances prevailing.

Before entering into a prenuptial agreement, it is important that each party seeks independent legal advice. Taking independent legal advice will aid in establishing that an individual was fully aware of the terms of the agreement and therefore freely entered into it, particularly if warnings were raised at a preliminary stage. For instance, in the case of DB v PB (2016) EWHC 3431 (Fam), the wife’s assertion of misrepresentation failed because it revealed that she had received independent legal advice in the United States advising her not to sign the agreement.

A person’s emotional state at the time of making the agreement is also relevant to whether the person entered into the agreement of his or her own free will, without undue influence or pressure. The Courts will also take into account the individual’s age and maturity and whether either or both had been married or been in long-term relationships before.

Timing is equally important and signing the prenuptial agreement immediately before the marriage increases the risk that one party will be considered to have put undue pressure on the other. The parties should have a full appreciation of the implications of the prenuptial agreement. This requires an exchange of financial disclosure before the agreement is signed to ensure that each party is aware of the extent of the claims he or she may potentially be giving up. On this point, in the case of Y v Y (2014) EWHC 2920, the Court refused to give effect to a French-style prenuptial agreement entered into by a French coupleliving in London who signed the agreement barely two days before their wedding. The Court took the view that while the wife had understood the function of the agreement when she signed it, she had not had any understanding of the financial consequences should the marriage breakdown.

The agreement must also be fair in the circumstances of the case. Concept of fairness has been subjected to much debate. The English courts have a broad discretion in financial remedy proceedings and at an absolute minimum will seek to ensure that both parties’ needs, and in particular the needs of the financially weaker party, and the needs of any children of the family are met. As a general rule, the longer the marriage, the lower the chance that the prenuptial agreement will be upheld, particularly if there have been significant or unforeseen changes in circumstances. In the case of WW v HW (2015) EWHC 1844, the Court accorded significant weight to the prenuptial agreement and went on to find that it would be fair to hold the husband to its terms unless his needs dictated a different outcome.

Way Forward

In view of the provisions of the Act on prenuptial agreements and the jurisprudence, couples contemplating signing a prenuptial agreement should be mindful of the following points:
• The parties should seek independent legal advice as a prerequisite to signing the agreement, even where one of the parties insists that he or she has read and understood the terms of the agreement, the rights and obligations that he or she will be surrendering. This is an essential element as it tends to show that the agreement was freely entered into by the parties without coercion or fraud.
• The parties should make full and frank disclosure of all of their assets including those that they intend to exclude under the prenuptial agreement. This is a requirement at common law.
• The parties should note that the agreement could be set aside by the Courts on the ground that it was unfair or manifestly unjust; therefore, the parties should ensure that the agreement does not have the effect of producing gross inequality between them either at the time of execution or during the marriage and that the division of assets is not weighted too heavily in favour of one party.
• The right of the child to support should be addressed prior to signing the Agreement, noting that the interests of the child take precedence over all other interests under Kenyan law. As was held in Radmacher v Granatino, the agreement cannot be allowed to prejudice the reasonable requirements of any children of the family.
• While there is no minimum time requirement for a party to review and sign a prenuptial agreement under the Act, the position at common law appears to be that prenuptial agreements must not be entered into less than twenty-one (21) days before the marriage.
• Signing the prenuptial agreement closely before the wedding is not recommended. The party initiating the process should therefore ensure that the other party is provided sufficient time to review the prenuptial agreement and the financial disclosures.

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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.

Contact Us

Oraro & Company Advocates
ACK Garden Annex, 6th Floor, 1st Ngong Avenue
P. O. Box 51236 - 00200, Nairobi, Kenya.
T: +254 709 250 000
E: legal@oraro.co.ke | W: www.oraro.co.ke

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