Introduction The High Court’s decision in Riungu v Capital Markets Authority addresses the critical constitutional requirement for fair administrative action in Kenya, as enshrined in Article 47 of the 2010 Constitution. The case puts a spotlight on the obligations of regulatory bodies and the impact on professionals in the financial services industry, particularly regarding administrative timelines and procedural fairness.
Factual Background The petitioner, a finance industry professional, was subject to the “Fit & Proper” assessment under section 24 of the Capital Markets Authority Act—essential for renewal of his license. He made this application while at Genghis Capital Limited, but the Capital Markets Authority (CMA) failed to respond in a timely manner. Despite the Act requiring a determination (approval or objection) for key personnel, it set no deadline for doing so.
CMA’s inaction, including a confidential notification that the application was “held in abeyance,” resulted in the petitioner losing his role at Genghis Capital Limited. The petitioner later faced similar non-responsiveness from CMA for a subsequent application with May Fair Asset Managers Limited. He argued that such delays violated his constitutional right to fair administrative action (Article 47), causing substantial financial loss—estimated at nearly Ksh. 46 million. Additionally, although CMA failed to determine his applications, they instigated disciplinary proceedings against him related to an earlier tenure elsewhere.
Court’s Decision and Reasoning The High Court held that the CMA was in violation of Article 47, which guarantees all citizens administrative action that is expedient and for which reasons must be given when adverse decisions are made or applications are denied. The court recognized that, although neither the Act nor regulations set a clear timeframe for CMA’s decision, there is a constitutional and legitimate expectation for decisions to be made within a reasonable time.
In defining “expeditious” administrative action, the Court relied on Utalii Transport Company Limited & 3 Others v NIC Bank Limited & Another eKLR, where it was established that a decision must not be unreasonably delayed (“inordinate delay”). The standard is whether the conduct and timeline involved are so excessive compared to what would be considered normal that the delay becomes inexcusable.
The Court clarified that whether an administrative action is expeditious is to be determined case-by-case, but the burden remains on administrative agencies to act promptly and, where they do not, to provide written reasons for their inaction or adverse decision.
Implications
Onus on Decision-Makers: Decision-making bodies (like CMA, but extending to all statutory and administrative bodies) must act promptly, and delays—unless properly justified—may constitute constitutional violations. Legitimate Expectation: The existence of a legitimate expectation for timely outcomes, even in the absence of explicit statutory timelines, creates an actionable right for applicants. Inordinate Delay Defined: Any considerable lapse that departs from accepted or expected timelines, if left unexplained, is inexcusable. Reasoned Decisions: Where adverse administrative action occurs, or there is deprivation of rights, written reasons must be provided to satisfy the test for fairness. Sector-wide Effect: The precedent sets a judicial standard for what constitutes a reasonable time in administrative action, providing a practical metric for litigants and a caution for administrative bodies to avoid procrastination or procedural inertia. Conclusion The Riungu v CMA decision underscores and enforces the burden on public and statutory decision-makers to act timely and transparently. It advances Kenyan constitutional law on administrative justice by making clear that justice delayed—without adequate excuse—is justice denied, and by affirming the constitutional principle that the machinery of administration must operate efficiently and in good faith for the people it serves.
