OECD Peer Reviews of Competition Law and Policy: Kenya

8. Judicial review

Abstract

This chapter covers the law, procedures and practice for appeals of decisions of the Competition Authority of Kenya. This includes appeals to both the Competition Tribunal and the High Court of Kenya.

8.1. Law and practice

This chapter addresses only the judicial review process of CAK administrative decisions that are of relevance to competition law and policy in Kenya as noted in Chapters 1 and 3 above, the Competition Act does contain a framework for criminal enforcement of anticompetitive conduct in Kenya. However, the CAK has never and does not intend to use the criminal enforcement framework.

8.1.1. Overview of the judicial system

There are two bodies in the Kenyan judicial system that are empowered to hear appeals of CAK decisions. At first instance, appeals are made to the Competition Tribunal of Kenya (the “Tribunal”), with a second and final level of appeal to the High Court of Kenya.

The Tribunal is established in 2016 under the Competition Act to hear appeals of CAK decisions.1 The Tribunal is composed of a chairperson and must have between two and four ordinary members.2 The chairperson and members serve for a period not exceeding five years, unless they resign or are relieved of duties (due to health or lack of attendance at Tribunal meetings).3 In recent practice, Tribunal members are appointed by the government for a three‑year term, and then re‑appointed for another three‑year term (exceeding the five year mandate period).

Quorum for a decision requires the chairperson and at least two members.4 Positions on the Tribunal are not full time, with the chairperson and members receiving fees and allowances for their work.5

The Competition Act grants the Tribunal powers to convene hearings, for parties to appear before the Tribunal and to award costs at the Tribunal’s discretion.

The operations of the Tribunal are governed by a Cabinet Secretary. The Cabinet Secretary and a staff of around seven others are seconded from the Kenyan National Treasury and the Ministry of Justice to provide administrative support. In consultation with the Tribunal, the Cabinet Secretary is empowered under the law to make rules regarding:6

• the legal form for appeals to the Tribunal and any fees charged

• the procedural rules for appeals and record keeping

• arranging the schedule for hearings and meetings of the Tribunals

• setting the fees and allowances that are to be paid to Tribunal members.

Kenya’s court system is structured as set out in the Kenyan Constitution.7 The High Court of Kenya is third highest court in the hierarchy as set out in the Constitution. Among its roles, the High Court has supervisory jurisdiction over bodies exercising a judicial or quasi-judicial function, such as the Tribunal.8 The Competition Act establishes that parties have a right to appeal Tribunal decisions to the High Court.9 The term of a High Court judge runs from their appointment until their compulsory retirement age of 70, unless they choose to resign earlier, take early retirement after the age of 65, or are removed pursuant to the grounds in the Constitution (such as gross misconduct or becoming bankrupt).10

The High Court is the final avenue of appeal for CAK decisions. There is no scope to appeal High Court decisions to the Court of Appeal or the Supreme Court of Kenya.

Appeals at the High Court are typically heard by a single judge. Any matter certified by the court as raising a substantial question of law can be assigned by the Chief Justice to a panel of judges (at least three and the number of judges must be uneven).11 CAK appeals are heard by judges that are assigned to the Commercial Division of the High Court (judges are rotated across the various Divisions of the Court and do not specialise).

Decisions of the High Court are binding on subordinate courts and tribunals under the doctrine of stare decisis.

8.1.2. Standing to appeal

The Competition Act states that any “person aggrieved by a determination” of the CAK has standing to appeal.12

Additionally, the Competition Tribunal (Procedure) Rules set out which persons may also be parties to an appeal of a CAK decision. These are:13

• In the context of an appeal of a merger decision, an interested party to the transaction.14

• A party joined to the appeal by the Tribunal.

• Any other persons affected by a decision of the CAK that have applied to be enjoined to the appeal.

8.1.3. Decisions subject to appeal

All final decisions of the CAK can be appealed to the Tribunal at first instance and finally to the High Court of Kenya at second instance.15

In addition to these final decisions relating to anticompetitive conduct or mergers, the Competition Act also allows parties to appeal decisions relating to interim measures and decisions relating to claims for confidentiality or non-disclosure of information.16

8.1.4. Appeal process

For CAK decisions that relate to anticompetitive practices, parties must lodge an appeal to the Tribunal within 30 days of receiving the CAK’s decision. There is also a 30‑day timeframe for appealing Tribunal decisions to the High Court.17

For merger decisions, parties have 30 days after the merger decision is issued by the CAK to appeal to the Tribunal. The Tribunal is bound under the Competition Law to issue its decision within four months of the appeal being lodged.18 Merger-related decisions of the Tribunal may then be appealed to the High Court within 30 days of the Tribunal’s decision, though the legislation does not set any obligations on the speed of the High Court’s decision.19

During the course of the litigation, the CAK and the party appealing a decision may arrive at a settlement and seek permission of the Tribunal or High Court to close the legal proceedings. As noted in ‎8.1.6 below, this has been the typical outcome of proceedings in the past five years, with 5 of the 6 concluded Tribunal appeals ending in a settlement.

8.1.5. Standard of review

Appeals can be in relation to the procedural legality or merits of CAK decisions. In practice, the CAK report that roughly 80% of the appeals are challenging the legality of CAK decisions. Common grounds of appeal are claims the CAK has failed to follow fair administrative processes, failed to instigate an investigation within the three‑year limitation period, that the CAK lacks jurisdiction, or that the CAK has breached the rules of evidence.

In an appeal, the Tribunal and High Court have the power to conduct a hearing de novo, and to confirm, modify or reverse the decision subject to the appeal.

In its determination of any appeal, the Tribunal may confirm, modify, or reverse the order appealed against, or any part of the CAK’s decision.20 The Tribunal may also refer the matter back to the CAK with directions on how to reconsider the matter.21

The standard of proof is the balance of probabilities. The burden of proof is on the party seeking the appeal.

8.1.6. Decisional practice

There are very few decisions of either the Tribunal or High Court. In practice, very few decisions of the CAK are appealed. Of the few that are appealed, almost all are settled by the parties before the Tribunal or High Court has issued its decision.

The table below sets out the decisional practice of the Tribunal and High Court over the last five years, as reported to the OECD by the CAK.

Table ‎8.1. Decisions of the Tribunal and High Court relating to competition enforcement

Year	Tribunal appeals of CAK decisions from that year*	Tribunal outcomes	Subject of decision	High Court appeals of CAK decisions from that year*	High Court outcomes
2020	3 (separate parties in same case)	3 settled before appeal decision issued	Horizontal agreements	0	N/A
2021	1	1 CAK upheld	Merger	0	N/A
2022	0	N/A	N/A	0	N/A
2023	8 (separate parties in same case)	2 settled before appeal decision issued
6 still ongoing	Horizontal agreements	0	N/A

Note: Decisions of Tribunal or High Court were not necessarily issued in the same year that the CAK issued the decision.

Source: CAK questionnaire.

This means that the Tribunal has issued one decision about mergers and none on antitrust enforcement over the past five years, with the High Court issuing no decisions at all.

The Tribunal has also heard three cases covering the related conduct of misuse of buyer power (one of which was also unsuccessfully appealed by a party to the High Court). However, as noted in Chapter 1 above, abuse of buyer power is not interchangeable with abuse of dominance and is outside of the scope of this Peer Review exercise.

8.1.7. Judicial expertise

For the Tribunal, the Competition Act requires that the chairperson be a lawyer of at least seven years standing.22 There is no requirement for the chairperson to have any particular experience or expertise in competition or consumer protection law.

There are no skill or expertise requirements at all for the other members of the Tribunal.

No competition law training has been provided to the Tribunal in at least the last five years. The Competition Act does not empower the Tribunal to call or remunerate independent experts to assist the Tribunal in appeal proceedings.

The criteria for appointing High Court judges are set out in the Kenyan Constitution. Appointees must have at least ten years of relevant experience as a judge, magistrate, lawyer or academic.23 Judges of the High Court do not specialise and after three years are rotated across the High Court’s Divisions, including the Commercial Division which hears CAK related appeals.

The OECD team was unable to meet with the High Court during the fact-finding mission. However, no evidence gathered from the questionnaire or other stakeholders suggests that any training has been provided to the High Court in relation to competition law.

8.2. Analysis

The Recommendation on Transparency and Procedural Fairness in Competition Law Enforcement [OECD/LEGAL/0465] calls on adherents to “ensure access to an impartial review by an adjudicative body that is independent and separate from the competition authority”, adding that the appeal body should be able to examine “facts and evidence, and the merits of competition law enforcement decisions”.

While the Competition Act envisages the Tribunal as a specialised body to hear appeals, there are significant challenges impeding its ability to do so. However, the Tribunal has no competition law expertise and has no resources to develop expertise. This critically undermines the Tribunal’s capacity to act as an effective check on the CAK’s decisions.

Further, the only eligibility criterion is that the chairperson of the Tribunal is a lawyer of seven years standing and that there are no criteria at all for ordinary members of the Tribunal. This creates a situation where appeals to the specialised tribunal body are in practice being heard by people with no underlying knowledge or experience in the competition field.

Historically, Tribunal members were not remunerated, meaning that in the past Tribunal members had included workers such as schoolteachers due to the lack of candidates willing to take on the role. The Tribunal is now able to remunerate its members on a part time basis when they are required to hear and decide cases. The Tribunal is now made up of private legal practitioners, though none practice competition law. The reliance on private practitioners as Tribunal members may raise additional concerns about potential conflicts of interest when these lawyers or the firms they work in may have business before the Tribunal.

With the exception of the Tribunal’s Secretary, none of the Tribunal’s other administrative staff have any expertise in competition law or economics, being on secondment from government ministries. This means there is no capacity for the Tribunal to seek research assistance in conducting its cases, nor the ability for the Tribunal to seek external experts or advice to assist in appeals.

During OECD fact-finding, there was no evidence to suggest that the Tribunal has had access to any training on competition law or economics. There is no co‑operation between the CAK and Tribunal on training.

Stakeholders were of the view that these factors cumulatively meant that the Tribunal is not capable of acting as an effective appellate body, as it is too deferential to the CAK’s decisions. Private practitioners reported being hesitant to appeal cases to the Tribunal as they knew their prospects for success are very low. Stakeholders see this as creating a cycle which reduces the opportunities for the Tribunal to hear cases and further limiting the amount of meaningful oversight of CAK decisions.

Given there have been no appeals of competition cases to the High Court in at least the last five years and no participation from the High Court in relevant training, stakeholders held similar concerns regarding the prospects of effective judicial review at second instance.

Notes

← 1.  Competition Act, p.p. VII.

← 2.  Competition Act, s 71(2).

← 3.  Competition Act, s 71(3).

← 4.  Competition Act, s 71(4).

← 5.  Competition Act, s 71(5).

← 6.  Competition Act, s 71(6).

← 7.  Constitution of Kenya (2010), s 165.

← 8.  Constitution of Kenya (2010), s 165(6).

← 9.  Competition Act, s 77.

← 10.  Constitution of Kenya (2010), ss 167‑168.

← 11.  Constitution of Kenya (2010), s 165(4).

← 12.  Competition Act, ss 40, 73.

← 13.  Competition Tribunal (Procedure) Rules (2017), r 11.

← 14.  See Competition Act, s 48(2).

← 15.  Competition Act, ss 40, 48, 73.

← 16.  Competition Act, s 20(9).

← 17.  Competition Act, s 40.

← 18.  Competition Act, s 48.

← 19.  Competition Act, s 49.

← 20.  Competition Act, s 74(3).

← 21.  Competition Act, s 75.

← 22.  Competition Act, s 71(2)(a).

← 23.  Constitution of Kenya, s 166(5).