Daily Archives: June 26, 2026

Overview

Kenya’s Senate has introduced the Artificial Intelligence Bill, 2026, the country’s first dedicated legal framework for the regulation and governance of AI. The Bill establishes a new regulator, sets rules for how AI systems may be developed and deployed, and creates criminal offences for non-compliance. Once enacted, it will affect any business or individual that develops, deploys, or uses an AI system in Kenya.

2.The New Regulator

This article explores the opportunity, the regulatory framework, and the legal considerations surrounding REITs in Kenya and why forward-thinking investors and developers should start paying attention.

3.What This Means for Your Business

i. Risk Classification

All AI systems will be classified into one of four risk tiers, which determines the level of compliance required:

• Unacceptable Risk — banned outright with no exceptions.

• High Risk — AI used in healthcare, finance, agriculture, education, security, employment, or public administration. Subject to the most demanding obligations.

• Limited Risk — moderate-risk systems, primarily subject to transparency and disclosure requirements.

• Minimal Risk — low-risk systems with minimal compliance obligations.

If You Deploy a High-Risk AI System
Businesses operating in high-risk sectors will be required to:

• Conduct a risk assessment and a human rights impact assessment before deploying the system.

• Ensure the system is transparent and explainable, so that users understand how decisions are made.

• Keep records of data inputs, training datasets, outputs, and performance metrics for at least five years.

• Obtain explicit consent and clearly label AI-generated content where the system produces or manipulates images, voice, or likeness.

• Submit annual compliance reports to the AI Commissioner.

ii. Workforce Obligations

Any business introducing an AI system likely to displace workers must conduct a workforce impact assessment and implement reskilling programs in collaboration with government agencies. This applies to any employer automating functions that affect existing roles. ESK ADVOCATES LLP APRIL 2026 eskadvocatesllp.co.ke 4.Key Takeaways The AI Bill 2026 signals a significant regulatory shift for any organization developing, deploying, or using AI systems in Kenya.

iii. Penalties

Clients should note the following: Non-compliance carries serious consequences. Major violations such as deploying a prohibited or high-risk AI system without the required assessments shall attract a fine of up to Kshs. 5,000,000 and/or two years’ imprisonment. Transparency and disclosure failures attract a fine of up to Kshs. 1,000,000 and/or six months’ imprisonment. Directors and officers can be held personally liable where they had knowledge of an offence and failed to act.

4.Key Takeaways

The AI Bill 2026 signals a significant regulatory shift for any organization developing, deploying, or using AI systems in Kenya. Clients should note the following:

• Organizations should begin auditing their existing AI systems against the Bill’s risk classification tiers now, ahead of the Act’s commencement.

• Businesses operating in healthcare, finance, education, agriculture, security, employment, or public administration should expect the most intensive obligations including pre-deployment impact assessments, record-keeping for five years, and annual compliance reporting.

• Any AI product that generates or manipulates images, voice, or likeness will be subject to strict consent and labelling requirements with criminal sanctions for non-compliance.

• All county and national government bodies using AI must comply with the Act in full. Non-compliant public sector AI use is a criminal offence.

• Employers introducing AI that may displace workers must conduct impact assessments and implement reskilling programs in partnership with government agencies.

• The sandbox mechanism offers an avenue for businesses to test innovative AI solutions in a supervised environment clients in the innovation and technology sector should monitor sandbox eligibility criteria once the Commissioner is appointed.

• The Act will be reviewed every three years to keep pace with technological change, meaning compliance obligations may evolve.

5.How ESK Advocates LLP Can Help

The AI Bill introduces a new layer of legal and regulatory obligations that will require careful navigation. ESK Advocates LLP is well positioned to guide your business through this transition in the following ways;

· AI Compliance Audits — reviewing your existing and planned AI systems to determine their risk classification and the compliance obligations that apply to your business.

· Impact Assessments — advising on and preparing the risk assessments and human rights impact assessments required before deploying high-risk AI systems.

· Regulatory Engagement — representing your interests before the Office of the AI Commissioner, including in enforcement proceedings, investigations, and sandbox applications. · Contract and Policy Review — updating your internal AI policies, data processing agreements, and vendor contracts to align with the new law.

· Workforce Advisory — advising employers on workforce impact assessment obligations and the legal framework for reskilling and transition programs.

· Ongoing Compliance Support — providing continued legal support as regulations and guidelines are issued under the Act and as the law evolves through its three-year review cycle.

To discuss how the AI Bill may affect your business, please contact ESK Advocates LLP.

Article By :

Joyce Nduta

Holding-Over Associate

A Critical Analysis of Sections 97 and 98 of the Evidence Act in I & M Bank Limited v Buzeki Enterprises Limited (2026)

Abstract

The 2026 decision of the High Court of Kenya in I & M Bank Limited v Buzeki Enterprises Limited delivered on 13th February 2026 represents a significant reaffirmation of the parol evidence rule under Sections 97 and 98 of the Evidence Act (Cap 80). Although arising from enforcement of a promissory note, the judgment offers broader doctrinal clarification on the admissibility of oral evidence in the face of written commercial instruments. This note examines the Court’s interpretation of Sections 97 and 98, its narrowing of the “condition precedent” exception, and the implications of the decision for evidentiary certainty in commercial litigation. It argues that the ruling reflects a deliberate judicial preference for documentary supremacy and commercial predictability over equitable flexibility

Definition of the Parol Evidence Rule

The parol evidence rule is a principle of contract and evidence law which provides that where parties have reduced their agreement into writing, oral statements or other outside evidence are not admissible to contradict, vary, add to, or subtract from the terms of the written document.

The rule rests on the presumption that the written instrument embodies the final and complete expression of the parties’ intentions. Accordingly, once contractual terms are formally recorded, the document itself becomes the exclusive source of proof of those terms, subject only to limited statutory or common law exceptions such as fraud, mistake, or the existence of a collateral agreement. In Kenya, the rule is codified in Sections 97 and 98 of the Evidence Act (Cap 80), which govern the admissibility of oral evidence in relation to written contracts.

The decision of the High Court of Kenya in I & M Bank Limited v Buzeki Enterprises Limited (2026) provides a modern judicial exposition of Sections 97 and 98 of the Evidence Act (Cap 80). While framed as a commercial dispute concerning enforcement of a promissory note, the case is fundamentally lay a straightforward but doctrinally significant question: “Can oral evidence be admitted to vary the express terms of a written negotiable instrument?” The Court answered firmly in the negative. In doing so, it reaffirmed the centrality of the parol evidence rule in Kenyan jurisprudence and clarified the limited scope of its statutory exceptions.

Section 97 and the Statutory Entrenchment of the Parol Evidence Rule The Structure of Section 97

Any business introducing an AI system likely to displace workers must conduct a workforce impact implement reskilling assessment programs collaboration with government agencies. This applies to any employer automating functions that affect existing roles. Section 97(1) of the Evidence Act provides that where the terms of a contract have been reduced into writing, no evidence shall be given in proof of those terms except the document itself or admissible secondary evidence of its contents. Section 97(2) goes further and prohibits the admission of oral evidence to contradict, vary, add to, or subtract from the written terms. This provision codifies the common law parol evidence rule and rests upon three foundational assumptions: 1. A written agreement embodies the final intention of the parties. 2. Documentary evidence is inherently more reliable than oral recollection. 3. Commercial stability depends upon certainty of written obligations. Section 97 therefore serves both evidentiary and policy functions.

Application in the Case

In I & M Bank v Buzeki, the Defendant argued that payment under a promissory note was conditional upon the sale of a parcel of land known as “Taru Ranch.” The written instrument, however, was clear and unequivocal. It specified: · A fixed principal sum; · A fixed maturity date; · An unconditional promise to pay. The Defendant sought to introduce oral testimony to demonstrate that repayment would only crystallize upon sale of the property.

The Court rejected this attempt and held that admitting such evidence would directly contradict the fixed maturity date and transform the nature of the instrument from unconditional to contingent. Under Section 97, the written document was conclusive proof of its terms. The evidentiary inquiry ended with the document itself. The judgment thus affirms that Section 97 is not a mere technical rule of exclusion; it is a structural doctrine safeguarding the integrity of written agreements.

Section 98 and the Limits of Flexibility The Provisos to Section 98

Section 98 introduces exceptions to the rigidity of Section 97. Oral evidence may be admitted to prove: Fraud Mistake Illegality Failure of consideration A separate oral agreement not inconsistent with the written contract A condition precedent These provisos ensure that the parol evidence rule does not operate as an instrument of injustice. However, they are carefully circumscribed.

The Defendant relied, implicitly, on the proviso permitting proof of a condition precedent but the Court drew a crucial doctrinal distinction. A valid condition precedent must operate consistently with the written contract. It cannot negate or contradict its express terms.The alleged oral condition in this case was not collateral or explanatory. It directly displaced the fixed maturity date and sought to introduce an uncertain contingency. The Court concluded that the oral evidence was inconsistent with the written instrument and fell outside the protective scope of Section 98. This interpretation narrows the practical operation of the condition precedent exception and reinforces the primacy of documentary clarity in commercial contexts.

Documentary Supremacy in Commercial Transactions

An important dimension of the decision is its commercial context. The instrument in question was not an informal private agreement; it was a promissory note a negotiable instrument capable assignment and reliance by third parties. Allowing oral conditions to modify such an instrument would introduce uncertainty into commercial finance and undermine negotiability.

The Court’s strict application of Sections 97 and 98 reflects an appreciation of this commercial reality. Evidence law, in this instance, serves a systemic function: Protecting financial predictability; Preserving reliance on written instruments; Preventing opportunistic litigation defences. The decision thus situates Sections 97 and 98 within a broader policy framework of commercial certainty.

Pleadings, Discipline Proof, and Evidentiary

Although primarily an interpretation of Sections 97 and 98, the judgment also reinforces the pleadings relationship and between admissibility.The Defendant’s reliance on an oral condition was not firmly grounded in the pleadings. The Court’s unwillingness to entertain that line of defence underscores a broader evidentiary principle. Issues for determination flow from pleadings, and evidence inconsistent with pleaded terms cannot be introduced to reshape the dispute. This procedural discipline complements the substantive rigidity of Section 97.

Critical Evaluation

APRIL 2026 eskadvocatesllp.co.ke The decision may be viewed as reflecting a formalist approach to contractual interpretation. Critics might argue that strict enforcement of documentary supremacy may sometimes subordinate equitable considerations.
However, in commercial litigation, particularly involving negotiable instruments, predictability often outweighs flexibility. The Court appears to have consciously prioritised systemic stability over case-specific accommodation.
From an evidence law perspective, the ruling clarifies that: · Section 97 establishes a strong presumption of documentary completeness. · Section 98 does not permit contradictions disguised as explanations. · Oral evidence cannot be used to rewrite clear written obligations. The case therefore strengthens doctrinal coherence in Kenyan evidence jurisprudence.

Conclusion

I & M Bank Limited v Buzeki Enterprises Limited stands as a contemporary reaffirmation of the parol evidence rule in Kenya. Daniel Munyoki Article By : Associate Advocate The High Court demonstrated that: Written contracts are conclusively proved by the document itself under Section 97. The exceptions in Section 98 are narrow and cannot be invoked to contradict express terms. In commercial litigation, documentary certainty is paramount. The decision reinforces the evidentiary hierarchy between written and oral proof and signals that courts will guard the integrity of commercial instruments with doctrinal firmness. As Kenyan commercial litigation continues to expand in complexity and volume, this case will likely serve as a leading authority on the operation of Sections 97 and 98 of the Evidence Act.

Article By:

Daniel Munyoki
Associate Advocate