Posts in category: Law

Introduction

Commercial leasing is an indispensable aspect of Kenya’s economy. Every day, businesses enter into leases for shops, offices, restaurants, and other commercial premises, often assuming that the written lease agreement alone defines their rights and obligations. However, one of the most misunderstood areas of Kenyan commercial property law is the distinction between an ordinary commercial lease and a controlled tenancy under the Landlord and Tenant (Shops, Hotels and Catering Establishments) Act, Cap. 301 (“the Act”). This distinction is not merely technical. It determines whether a landlord may freely terminate a tenancy, revise rent or recover possession, or whether such actions are subject to the mandatory statutory safeguards administered by the Business Premises Rent Tribunal (BPRT).

Many costly disputes arise because parties fail to appreciate that the law, rather than the wording of the lease alone, determines whether a tenancy is controlled. Recent decisions of the superior courts have consistently reaffirmed that parties cannot circumvent the protections afforded under Cap. 301 through contractual drafting or self-help remedies. Both landlords and tenants must therefore understand the legal implications of the tenancy they create.

The Legal Framework

• Commercial leases in Kenya are principally governed by:
• the Landlord and Tenant (Shops, Hotels and Catering Establishments) Act (Cap. 301);
• the Land Act, 2012;
• the Land Registration Act, 2012;
• the general law of contract;

Controlled Tenancy: The Landlord and Tenant (Shops, Hotels and Catering Establishments) Act

The Act is a statute specifically enacted to protect tenants occupying business premises from arbitrary eviction and unreasonable alteration of tenancy terms while balancing landlords’ proprietary rights through an orderly disputeresolution process. Section 2 of Cap. 301 defines a controlled tenancy as a tenancy of a shop, hotel or catering establishment that:

• has not been reduced into writing;
• is reduced into writing for a term not exceeding five years;
• or although exceeding five years, contains a provision permitting termination (otherwise than for breach) within the first five years.

The above definition demonstrates that the legal character of a tenancy depends on its substance rather than the title given to the agreement. This principle was emphasized by the Court of Appeal in African Universal Merchandise Ltd v Kulia Investments Ltd [1980] eKLR, where the Court held that whether a tenancy is controlled depends upon whether it falls within the statutory definition under Section 2 of Cap. 301, rather than the parties’ subjective intentions. Similarly, in Bachelor’s Bakery Ltd v Westlands Securities Ltd [1982] eKLR, the Court observed that Cap. 301 is a special statute enacted for the protection of certain classes of commercial tenants and that a written lease exceeding five years generally falls outside its scope unless it contains an early termination clause.

Why the Distinction Matters
The legal consequences are significant. Where a tenancy is controlled:

• the landlord cannot simply terminate the tenancy;
• rent cannot be varied arbitrarily;
• statutory notices must be issued in the prescribed form;
• disputes fall within the jurisdiction of the Business Premises Rent Tribunal; a
• nd tenants enjoy security pending determination of any reference before the Tribunal.

Conversely, where a tenancy falls outside Cap. 301, the parties’ rights are primarily governed by the lease agreement and the general law relating to contracts and property. Dispute Resolution Forum under Cap 301: Business Premises Rent Tribunal Sections 11 and 12 of Cap. 301 establish the Business Premises Rent Tribunal and confer extensive powers upon it. Among other things, the Tribunal may: determine whether a tenancy is controlled; assess or vary rent; determine the validity of termination notices; order recovery of possession; authorize distress for rent; award costs; and make such further orders as are necessary for the ends of justice. Because Parliament has conferred these powers upon the Tribunal, courts have repeatedly held that parties should first invoke the Tribunal’s jurisdiction where disputes concern controlled tenancies.

Dispute Resolution Forum under Cap 301:

Business Premises Rent Tribunal Sections 11 and 12 of Cap. 301 establish the Business Premises Rent Tribunal and confer extensive powers upon it. Among other things, the Tribunal may:

• determine whether a tenancy is controlled;
• assess or vary rent;
• determine the validity of termination notices;
• order recovery of possession;
• authorize distress for rent;
• award costs;
• and make such further orders as are necessary for the ends of justice.

Because Parliament has conferred these powers upon the Tribunal, courts have repeatedly held that parties should first invoke the Tribunal’s jurisdiction where disputes concern controlled tenancies.

We urge our readers to be on lookout for our upcoming article that will delve extensively into the Business Premises Rent Tribunal.

Termination of a Controlled Tenancy

One of the most common misconceptions is that a landlord may terminate a commercial tenancy simply because the lease has expired or because rent is in arrears. Section 4 of Cap. 301 provides otherwise. A landlord wishing to terminate a controlled tenancy or alter its terms must issue the prescribed statutory notice specifying the grounds relied upon. If the tenant disputes the notice and files a reference before the Tribunal within the prescribed period, the notice is suspended until the Tribunal determines the dispute.

The Court of Appeal underscored this principle in Caledonia Supermarket Ltd v Kenya National Examinations Council [2000] 2 EA 351, holding that termination of a controlled tenancy must strictly comply with the statutory procedure. Even where the landlord believed the tenant’s protection had ceased, the Court emphasized that lawful notice remained indispensable.

Self-Help Remedies Remain Unlawful

Despite the clarity of the law, some landlords continue to lock business premises, disconnect utilities or remove tenants’ goods without obtaining the requisite orders. Courts have consistently condemned these actions. Despite the clarity of the law, some landlords continue to lock business premises, disconnect utilities or remove tenants’ goods without obtaining the requisite orders. Courts have consistently condemned these actions.

In Munaver N. Alibhai t/a Diani Gallery v South Coast Holdings Ltd [2020] eKLR, the High Court held that locking a tenant out without complying with Cap. 301 was unlawful. The Court reaffirmed that landlords must follow the statutory procedure rather than resort to self-help measures.

Such actions may expose landlords to claims for injunctions, damages for unlawful eviction, loss of business/profits and trespass. Can Parties Contract Out of Cap. 301? The answer is no. It is common to encounter lease clauses stating that the tenancy shall not be governed by Cap. 301. Such provisions are generally ineffective where the tenancy falls within the statutory definition. Section 3(6) of Cap 301 expressly renders void any agreement purporting to exclude the operation of the Act.

The courts have consistently upheld this principle, recognizing that statutory protections cannot be waived by private agreement. Practical Lessons for Landlords One of the most common mistakes in commercial leasing is assuming that a tenancy will operate exactly as the parties intended simply because the lease says so. In reality, the legal character of a tenancy is determined not only by the wording of the lease but also by the operation of Cap 301. Consequently, a lease that is poorly structured may inadvertently create a controled tenancy, exposing the landlord to statutory obligations and restrictions that were never contemplated at the negotiating table.

Where a landlord’s objective is to preserve contractual autonomy and maximise flexibility in managing commercial property, the lease should be deliberately drafted to fall outside the scope of Cap. 301. This requires more than avoiding certain terminology. It demands careful legal structuring.

As a general rule, the lease should provide for a fixed term exceeding five years and should not reserve a right for either party to terminate the tenancy within the first five years out of contractual convenience including termination with notice and without assigning any reason, but should termination be warranted, the same should arise from an event of default, such as breach of covenant, repudiatory breach, frustration and operation of law. Equaly important is the careful drafting of rent review provisions, renewal rights, break clauses, forfeiture provisions and default mechanisms to ensure they do not inadvertently trigger the protections afforded to controled tenancies.

A properly structured uncontroled tenancy places the commercial relationship back where sophisticated business parties generaly expect it to be—within the four corners of their negotiated contract. It enables landlords to implement agreed rent review mechanisms without statutory negotiate renewal intervention, terms on commercial rather than statutory considerations, recover possession upon expiry of the lease without mandatory tribunal processes, and respond more efficiently to changing business or redevelopment needs. This contractual certainty not only reduces the risk of disputes but also enhances the commercial value and marketability of investment property.

By contrast, where a lease unintentionally creates a controlled tenancy, the landlord’s contractual rights become subject to statutory oversight. Termination, rent reviews and refusal to renew are no longer governed solely by the lease but must comply with the mandatory procedures prescribed under Cap. 301. Failure to follow these procedures may render otherwise valid contractual actions ineffective, resulting in avoidable delays, increased legal costs and disruption to the landlord’s commercial plans.

The practical lesson is straightforward: the legal consequences of a commercial lease are determined at the drafting stage, long before any dispute arises. Strategic lease drafting is therefore an essential component of risk management. A well-drafted lease should not only document the parties’ agreement but also anticipate future commercial realities, minimise legal uncertainty and preserve the landlord’s ability to manage the property efficiently throughout the tenancy

At ESK Advocates LLP, we view every commercial lease as a strategic business instrument. Our drafting philosophy is centred on aligning legal documentation with our clients’ commercial objectives, identifying potential statutory pitfalls before they arise, and creating lease structures that provide certainty, flexibility and long-term value.

In commercial leasing, careful drafting is not simply about avoiding disputes; it is about protecting investments, preserving negotiating power and ensuring that the lease works for the landlord throughout its lifecycle.

Practical Lessons for Tenants

For tenants, the question should not simply be whether a tenancy is controlled or uncontrolled, but whether the legal framework best supports the business’s operational and commercial objectives. The nature of the tenancy will determine the level of statutory protection available, the flexibility relationship of the contractual and the certainty of occupation. For start-ups, smal and medium-sized enterprises (SMEs), retailers and businesses whose future space requirements may evolve over time, negotiating for a controled tenancy may be advantageous.

A controled tenancy provides statutory safeguards against arbitrary termination, unilateral rent increases and unreasonable changes to the tenancy. Where disputes arise, tenants have access to the Business Premises Rent Tribunal, which offers a specialised forum for resolving disagreements relating to termination, rent reviews and other tenancy matters. These statutory protections can provide valuable business continuity, particularly where the tenant has invested significantly in establishing goodwil at a particular location. Conversely, larger businesses, established corporate occupiers and tenants making substantial capital investments in leased premises may derive greater value from negotiating an uncontrolled tenancy

A carefully drafted long-term lease offers security of tenure through contract rather than statute, allowing the parties to negotiate bespoke provisions on rent reviews, renewal rights, fit-out obligations, exclusivity arrangements, expansion Such leases provide greater commercial certainty, reduce regulatory intervention and enable sophisticated parties to allocate risk in a manner that reflects the commercial realities of their transaction. Importantly, tenants should not assume that statutory protection is always preferable.

While a controlled tenancy offers important safeguards, it also limits the parties’ contractual freedom and may restrict the ability to negotiate innovative commercial arrangements. Equally, an uncontrolled tenancy should not be viewed as favouring landlords alone. When negotiated effectively, it can secure long-term occupancy, predictable costs and operational stability that are critical to business growth and investment.

The key consideration is ensuring that the lease reflects the tenant’s bargaining position, investment horizon and future business plans. Before signing any commercial lease, tenants should understand the legal consequences of the tenancy structure, assess how disputes, rent reviews and termination wil be managed, and negotiate terms that adequately protect their commercial interests. options and exit mechanisms.

At ESK Advocates LLP, we work with tenants to negotiate leases that go beyond legal compliance. Our approach is to ensure that every lease supports our clients’ commercial objectives, protects their investment in the premises and provides the certainty necessary for sustainable business operations.. In commercial leasing, the right tenancy structure is not determined by statute alone—it is determined by strategy.

Conclusion

The distinction between an ordinary commercial lease and a controlled tenancy is one of the most consequential issues in Kenyan commercial property law. It affects security of tenure, rent review, termination procedures and the forum for dispute resolution. Landlords who ignore the statutory safeguards risk costly litigation and substantial financial exposure. Equally, tenants who fail to appreciate the limits of statutory protection may inadvertently forfeit valuable rights. The safest approach is to seek legal advice before entering into, renewing or terminating any commercial lease.

Article By: Charles Chahilu
Associate Advocate

Introduction

Changing one’s name is a significant legal step, often driven by personal, cultural, or practical considerations. In Kenya, the process is governed by a clear legal framework that ensures name changes are properly documented and recognised. This article provides a detailed examination of the legal requirements and procedures for changing a name in Kenya, with specific attention to minors, married persons, divorcees, individuals above 16 years, and adults of 18 years and above.

Legal Framework Governing Change of Name in Kenya

The legal process of changing a name in Kenya is primarily anchored in various pieces of legislation:

The Registration of Documents Acts, Cap. 285 This Act provides the foundational framework for registering legal documents, including Deed Polls for name changes. Section 24 thereof requires documents to be lodged with the Registrar for registration.

The Registration of Documents (Change of Name) Regulations (Legal Notice 277 of 1967) These regulations set out the specific procedures, forms, and evidentiary requirements for changing a name. They prescribe the form and content of a Deed Poll and the documents that must accompany the Deed Poll for registration. The Registration of Persons Act, Cap. 107 The Act and the rules thereunder govern the registration of persons upon attaining the majority age and issuance of national identity cards. After a Deed Poll has been registered and the change of name gazetted, one may apply for amendment of their national identity card to reflect the new name under the rules.

The Births and Deaths Registration Act, Cap. 149 –This Act provides for the alteration of names particularly for children under two years of age

Procedure for Change of Name The procedure for changing one’s name is generally through execution and registration of a Deed Poll. However, the requirements slightly differ depending on the person’s age, legal capacity, and their personal circumstances. Ordinarily, the following procedure is applicable for change of name where the applicant is an adult person:

1. Preparation of a Deed Poll
The primary legal instrument for effecting a name change is the Deed Pol. This is essentialy a formal legal document executed by an individual declaring that they abandon their former name, adopt a new name, and undertake to use the new name in al legal dealings. The first step is to have an advocate prepare the Deed Pol which must be signed by the applicant and witnessed by a Commissioner for Oaths. The Deed Pol must be accompanied by the folowing documents:

• A statutory declaration sworn by a person resident in Kenya who has known the applicant for a significant period of time.
• A certified copy of the birth certificate or baptism certificate.
• A certified copy of the national identity card/passport and KRA Pin Certificate.
• Three colored passport-size photographs.
• A letter from the local area chief confirming the applicant’s identity and residence.
• A fingerprint printout obtained from the Registrar.

2. Registration with the Registrar of Documents
The completed Deed Pol, along with al supporting documents, is then submitted to the Registrar of Documents for registration. After payment of the fees, the Registrar wil review the documents and register them if satisfied that the applicant has duly complied with al the requirements.

3.Gazettement
Upon registration with the Registrar of Documents, the Advocate shal proceed to prepare a gazette notice and forward to the Government Printer for publication in the Kenya Gazette for a period of 60 days. The name change is legaly recognized at this point. Gazettement serves as official public notice to everyone of the change of name and legitimizes the new identity for legal purposes.

4. Update of Identification Documents

After gazettement, the applicant must apply for replacement of their national identity card and thereafter update other documents such as the passport, professional or academic certificates, bank records, land records, among others. As already noted, additional requirements apply depending on the personal circumstances of an applicant including whether the applicant is a minor, a married woman seeking to adopt her husband’s surname, a divorcee wishing to revert to her maiden name, or a widow.

a) Change of Name for Minors

Minors Below 2 Years: For children under two years of age, Section 14 of the Births and Deaths Registration Act provides a simplified procedure. Parents may apply directly to the Registrar of Births and Deaths to alter the child’s name upon payment of the prescribed fees. The application is made by filling out a form at the Registrar and does not require a Deed Poll.

Minors Below 16 Years: The law draws a distinction between minors below 16 years and those aged 16 to 18 years for purposes of name change. For a minor under the age of 16, the Deed Poll will be signed by the child’s parent or legal guardian. Where it is signed by one parent, the consent of the other must be provided. The additional documentation are the birth certificate, parents’ identity cards and passport-size photographs and Guardian appointment documents where applicable.

Minors Above 16 Years A person who has attained sixteen years but has not attained eighteen years remains a minor under Kenyan law. However, the law recognises the growing autonomy of this category of minors and seeks to protect them from unilateral changes of names by parents against their wishes. Accordingly, the parent or guardian will execute the Deed Poll but the minor’s consent must be endorsed on the Deed Poll and witnessed by an advocate.

b) Change of Name following Marriage or Divorce
For a married woman who wishes to adopt her husband’s surname, she wil be required to execute the Deed Pol and in addition, obtain the written consent of her husband, endorsed on the Deed Pol and witnessed by an advocate. If living separately from her husband in circumstances where the separation is likely to be permanent, a certificate from an advocate to that effect wil be required in place of the husband’s consent. Additional documentation includes the marriage certificate and copies of her husband’s identity card

c) Change of Name Following Divorce or Widowhood

A divorcee wishing to revert to her maiden name or adopt a new name must provide her certificate of marriage or other evidence of her marriage if it was not registered, together with the decree absolute or certificate of divorce. A widow seeking to change her name must, in addition to the documents in the preceding part, provide her certificate of marriage or other evidence of her marriage if it was not registered and the death certificate of her husband. The widow is described in the document as a widow for purposes of the name change.

Limitations on Change of Name

Although the law recognizes an individual’s right to change their name, that right is subject to certain limitations. The Registrar may decline to register a Deed Poll where the proposed name is vulgar, offensive, blasphemous, impossible to pronounce, or contains numbers, symbols, or punctuation marks. Registration may also be refused where the proposed name promotes criminal activity, hate speech, racial or religious hatred, or the use of controlled drugs; falsely implies the possession of titles such as “Doctor” or “Professor”; or is likely to ridicule individuals, groups, government departments, or organizations. These safeguards are intended to ensure that the process of changing one’s name is not abused for fraudulent, deceptive, or improper purposes.

How ESK Advocates LLP Can Help

At ESK Advocates LLP, we provide comprehensive legal assistance to individuals seeking to change their names under Kenyan law. Whether the application involves a minor, an adult, a married person, or a divorcee, our team offers expert guidance throughout the entire process, including advising on the applicable legal requirements, preparing and registering Deed Polls, facilitating publication in the Kenya Gazette, and assisting clients in updating their official records with the relevant government agencies and institutions. Our commitment is to ensure that every name change application is handled efficiently, accurately, and in full compliance with the law, providing our clients with a seamless and hassle-free experience.

This publication is for informational purposes only and does not constitute legal advice. Disclaimer : For tailored legal support , kindly consult our team.

Article By: Frankline Ojanji
Associate Advocate

Introduction

Family trusts have emerged as one of the most significant developments in wealth management and succession planning in Kenya. Kenya’s trust law operates within a multi-layered statutory framework. The Trustee Act, Cap. 167, remains the primary legislation regulating trustees’ powers, their appointment and removal from the positions. The Trustees (Perpetual Succession) Act, Cap. 164 facilitates the incorporation of trusts and defines the parameters of family trusts. It is worth noting that the current legal framework governing Trusts, built on colonial-era legislation, has long been recognised as inadequate for modern wealth management needs. Thus, the Trust Administration Bill, 2025, currently under consideration in Parliament, proposes to repeal both the Trustee Act and the Trustees (Perpetual Succession) Act and introduce a unified, transparent, framework.

Family trusts offer structured mechanisms for preserving wealth across generations and ensuring orderly succession outside the often protracted probate process. However, the very features that make family trusts attractive including flexibility, privacy, and asset protection, also create vulnerabilities that can be exploited. This article examines the principal loopholes in Kenya’s family trust regime and the legal remedies available to address them.

Loopholes in Kenya’s Family Trust Regime

a) Uncertain or Vague Trust Instruments

For a trust to be legally valid under Kenyan law, the trust instrument must satisfy three fundamental certainties: certainty of intention, certainty of objects (beneficiaries), and certainty of subject matter (trust property). These requirements, rooted in English common law serve as the bedrock upon which all valid trusts are constructed. Failure to meet any one of these certainties renders the trust invalid. The Trustees (Perpetual Succession) Act (Cap. 164) explicitly provides that a trust will not be valid if the terms of the trust are so uncertain as to render performance impossible.

Certainty of intention requires that the settlor’s clear and unequivocal intention to create a trust and transfer ownership of assets to trustees for the benefit of beneficiaries must be ascertainable from the trust deed. Where the intention is in doubt, the trust may be deemed a sham. Certainty of objects demands that the trustees be able to make a full and definitive list of beneficiaries at all times; if the beneficiaries are unascertainable, the trust fails due to uncertainty of objects. Certainty of subject matter requires that the trust deed clearly identify and list the assets constituting the trust property

Therefore, poorly drafted, ambiguous, or vague trust deeds can be exploited in several ways. A settlor seeking to retain control or obscure the true nature of the trust may deliberately craft vague provisions. Alternatively, trustees may exploit ambiguity to justify actions that benefit themselves or select certain beneficiaries at the expense of others. Beneficiaries, conversely, may challenge the trust on grounds of uncertainty to have it invalidated or force a redistribution of assets. In the case of In re Estate of Chadrakant Devchand Meghji Shah (Deceased) [2017] KEHC 8812 (KLR), the deceased made a will that created a testamentary trust by stating that the executors of his will should hold his estate for the benefit of his son and daughter.

However, the trust failed to indicate the assets that will constitute the trust fund and consequently it was unclear the amount of income that was to be obtained from the trust. The court found that even though there was certainty of intention and objects of the trust, the trust lacked certainty of subject matter and therefore the trust was held to be null and void.

Where a trust deed is found to be uncertain or vague, the trust may be declared invalid. A trust that fails due to uncertainty also loses the tax exemptions available under the Income Tax Act and Stamp Duty Act, exposing the assets to significant tax liabilities. Fundamentally, uncertainty invites litigation, as beneficiaries, trustees, and creditors dispute the interpretation of vague provisions. Lastly, vague trust deeds may grant trustees excessive discretion which can be abused to favour certain beneficiaries or to justify actions that do not align with the purposes of the trust.

The remedy for this loophole lies under Section 62 of the Trustee Act, Cap. 167 where the court has power to vary trusts in limited instances. However, where uncertainty is so profound as to render performance of a trust impossible, any interested party including beneficiaries, trustees or creditors, may apply to the court for a declaration that the trust is invalid and the court will exercise its discretionary powers in granting the orders.

a) Broad and Absolute Discretion of the Trustees One of the most significant loopholes in family trusts is the broad discretion often conferred upon trustees under trust deeds which in many cases is usually absolute leaving beneficiaries with limited ability to challenge the trustees’ actions. While such discretion is intended to enable trustees to administer trust assets efficiently and respond to changing circumstances, it can be abused

Trustees may make major decisions concerning trust property, investments or distributions without adequate consultation or disclosure to the beneficiaries. Although the Trustee Act grants trustees powers relating to investment, sale of trust assets, and management of trust property, it does not immunize bad faith where it arises among trustees. Trustees remain bound by fiduciary obligations to act in good faith, avoid conflicts of interest, exercise their powers for proper purposes, keep accurate accounts, and administer the trust strictly in accordance with the trust deed and the law.

The landmark case of Albert Kigera Karume & 2 Others v. George Ngugi Waireri & 2 Others (Milimani Civil Case No. 125 of 2015) offers a seminal judicial exposition of this loophole.

In that dispute, some beneficiaries of the late Njenga Karume’s multi-billion-shilling family trust accused the trustees of mismanagement, lack of transparency, failure to account for trust assets, exclusion of beneficiaries from information concerning the trust, and disregard of their welfare. While the High Court firmly upheld the validity of the trust structure and affirmed the founder’s right to appoint trustees of his choice, the Court emphasized that trustees are not beyond scrutiny merely because they possess wide discretionary powers. Justice Roselyn Aburili underscored that trustees are accountable to beneficiaries and must administer trust property diligently, transparently, impartially, and solely in the interests of the beneficiaries.

The Court ultimately ordered the removal of the trustees following the trust deed’s procedural mechanisms. The decision demonstrates that the remedy for abuse of trustee discretion is not the dissolution of the trust or transfer of trust assets directly to beneficiaries, as that would defeat the settlor’s intention. Rather, courts will intervene to enforce fiduciary duties, compel disclosure and accounting, and where necessary remove and replace trustees who have failed in their obligations. Beneficiaries can thus apply to the court for the removal of trustees who have breached their fiduciary duties.

a) Lack of Beneficiary and Dependants Protections

The intersection of Kenya’s family trust regime with matrimonial property and succession law reveals a significant loophole. Trusts can be strategicaly employed to disinherit spouses and dependants, effectively circumventing statutory protections.

Family trusts are increasingly utilised as estateplanning vehicles to facilitate intergenerational wealth transfer while avoiding the delays and publicity associated with probate proceedings. However, by transferring assets into a family trust during their lifetime, settlors can effectively disinherit heirs who would otherwise be entitled to a share of their estate. Section 26 of the Law of Succession Act provides for dependency provisions, but only against the deceased’s estate. Assets held in trust generaly fal outside the estate, so dependency claims may not reach them. This creates the possibility of spouses, children, and other dependants being deprived of property that would otherwise be available for distribution or for reasonable provision under succession proceedings.

Moreover, Section 6(2) of the Matrimonial Property Act, Cap. 152 expressly provides that trust property does not form part of matrimonial property. This statutory exclusion creates a powerful shield for assets placed in a family trust, as such property falls outside the scope of matrimonial property that would otherwise be subject to division upon divorce or dissolution While this provision is intended to preserve the integrity and independence of trusts, it also creates a potential avenue for abuse. A spouse may strategically transfer assets acquired during marriage into a family trust, thus placing them beyond the reach of the other spouse in the event of divorce or separation.

The PBO Act provides PBORA with enforcement powers across a tiered range of sanctions. Depending on the nature and severity of the non-compliance, an organization may face the issuance of compliance notices and corrective directives, financial penalties for late filing or failure to maintain records, suspension of operations pending investigation, cancellation of registration effectively shutting down the Organization, or personal liability for directors and officers in cases of gross misconduct.

A spouse or other dependent may challenge a trust as a sham or fraudulent conveyance where it was created to defeat their legitimate claims. In such cases, Courts are prepared to look beyond the formal structure of a trust where there is evidence that it has been established or utilised as a vehicle for fraud or to deliberately defeat of statutory rights. Thus, while placing assets in a trust can shield them from matrimonial property claims under the Matrimonial Property Act, the drafting must be robust enough to withstand a challenge that the trust was a sham or fraudulent conveyance.

A well-drafted trust deed should expressly acknowledge the interests of spouses and dependants and incorporate safeguards to prevent the trust from becoming an instrument of disinheritance. There should be full disclosure of any matrimonial property transferred into the trust and evidence of spousal knowledge or consent before such transfer is effected. This reduces the likelihood of subsequent claims that trust assets were improperly removed from the matrimonial estate. For dependants’ protection, the deed can provide for future children and dependants as beneficiaries.

Conclusion

Family trusts have become an indispensable tool for wealth preservation, succession planning, and asset management in Kenya’s increasingly sophisticated economic landscape. However, as this discussion demonstrates, the flexibility, privacy, and asset-protection benefits that make trusts attractive also create opportunities for abuse through vague trust instruments, excessive trustee discretion, and the potential exclusion of spouses and dependants from assets that would otherwise attract statutory protection The challenge for Kenyan law is therefore to ensure that they operate within a framework of transparency, accountability, and fairness. Through careful drafting, effective trustee oversight, robust beneficiary protections, and vigilant judicial intervention where abuses arise, trusts can continue to serve their legitimate estate-planning objectives while safeguarding the rights and interests of beneficiaries, spouses, dependants, and future generations. Ultimately, the continued development of Kenyan trust jurisprudence, coupled with the proposed reforms under the Trust Administration Bill, 2025, presents an opportunity to strike a balanced framework that promotes both wealth preservation and equitable justice.

Disclaimer : This publication is for informational purposes only and does not constitute legal advice.  For tailored legal support , kindly consult our team.

Article By: Frankline Ojanji
Associate Advocate

THE EMERGING POSITION OF THE SUPERIOR COURTS

Introduction

The law governing matrimonial property in Kenya has undergone significant transformation over the last decade, largely through interpretation of Article 45(3) of the Constitution, the Matrimonial Property Act, 2013, and the Marriage Act, 2014. The Constitution guarantees equality of rights between spouses during marriage and upon its dissolution, and it is because of this provision that Kenyan courts have had to grapple with the question of whether such equality translates into equal ownership and automatic equal division of matrimonial property.

Recent decisions of the Supreme Court and the Court of Appeal have clarified several contentious aspects of matrimonial property law, including the meaning of contribution, the effect of non-monetary contribution, the status of cohabitees, the retrospective application of the Matrimonial Property Act, and the principles governing apportionment of matrimonial property. The jurisprudence reveals a gradual movement away from the notion of automatic equal sharing and towards a contribution based on equity and fairness.

Constitutional and Statutory Framework Article 45(3)

of the Constitution provides that parties to a marriage are entitled to equal rights at the time of marriage, during marriage, and at the dissolution of marriage. The Matrimonial Property Act, 2013, was enacted to operationalise these constitutional guarantees. Of particular importance are:

Section 2, which recognizes both monetary and non-monetary contributions. The Act recognizes nonmonetary contributions, including:

a. Domestic work and management of the matrimonial home;

b. Child care;

c. Companionship;

d. Management of family businesses or property; and

e. Farm work. Section 6, which defines matrimonial property;

Section 7, which provides that ownership vests in spouses according to their contribution;

Section 14, which establishes rebuttable presumptions concerning property registered in the name of one or both spouses. The issue that the courts have been called upon to adjudicate has been reconciling Article 45(3)’s guarantee of equality with Section 7’s requirement that division be based on contribution

The Supreme Court’s Landmark Decision in JOO v MBO

The most influential modern authority is the Supreme Court decision in JOO v MBO & 2 others (Petition 11 of 2020) [2023] KESC 4 (KLR). In that case, the Court was called upon to determine whether matrimonial property should automatically be divided equally upon dissolution of marriage. The Court rejected the proposition that Article 45(3) creates a constitutional entitlement to a 50:50 division of matrimonial property. Instead, it held that equality of spouses does not equate to equality of interests in property rights. The Court stated that matrimonial property must be distributed according to the proven contribution of each spouse.

The Supreme Court further held that:

1. Article 45(3) guarantees equality of rights, not equal ownership of property.

2. Matrimonial property disputes must be determined on a case-by-case basis.

3. Courts must evaluate both monetary and non-monetary contributions.

4. There is no universal formula for the division of matrimonial property.

5.Evidence of contribution remains the essence of entitlement.

The decision effectively endorsed the contribution-based approach previously explained by the Court of Appeal in Echaria v Echaria (Civil Appeal 75 of 2001) [2007] KECA 504 (KLR). Although decided before the 2010 Constitution and the Matrimonial Property Act, Echaria continues to have considerable influence. This decision established the principle that a spouse claiming a share in matrimonial property must prove contribution to its acquisition. The Court rejected the English presumption of automatic beneficial ownership and insisted on proof of actual contribution.

Recognition of Non-Monetary Contribution

Despite rejecting automatic equal division, the Supreme Court has also enhanced recognition of non-monetary contributions. The Supreme Court acknowledged that contribution extends beyond direct financial input and includes domestic labour, child care, companionship, management of family affairs, and other forms of indirect support that enable wealth creation within the marriage.

This recognition is particularly important because many spouses, especially women, may not contribute directly to acquisition through income but facilitate the accumulation of family wealth through unpaid domestic and caregiving work. Accordingly, the current position is not that only financial contributions matter; rather, all forms of contribution matter, provided they can be demonstrated through evidence.

Presumption of Constructive Trusts
Marriage and A significant development emerged from the Supreme Court’s decision in MNK v POM & another (Petition 9 of 2021) [2023] KESC 2 (KLR). The Court held that the presumption of marriage as cohabitees remains an exception rather than the rule and should not readily be invoked merely because parties cohabited for a long period. The Court found that no marriage could be presumed in the circumstances of that case. However, the Court proceeded to recognize a constructive trust arising from the parties’ common intention and joint contribution to the acquisition and improvement of property. It consequently apportioned the property in the ratio of 70:30.

This decision demonstrates an important shift in that where a matrimonial claim fails due to absence of a legally recognizable marriage, equitable doctrines such as constructive trust and resulting trust may still provide relief where contribution is established.

Retrospective Application Matrimonial Property Act

Another issue addressed by the Supreme Court in the JOO v MBO case concerns the application of the Matrimonial Property Act, 2013. The Court held that the Act does not apply retrospectively to disputes whose causes of action arose before its commencement. Such disputes continue to be governed by the repealed Married Women’s Property Act, 1882, and other applicable constitutional principles.

However, the Court has clarified that constitutional values provided for in Article 45(3) may still inform the basis of the interpretation of pre-2013 disputes.

Matrimonial Property Corporate Structures

Held Through Recent Court of Appeal jurisprudence has also expanded the scope of matrimonial property by recognizing that spouses cannot evade matrimonial property claims merely by placing assets under corporate entities. Where shares or corporate assets are acquired during marriage and evidence demonstrates contribution by both spouses, courts have shown wilingness to look beyond the corporate veil. This development prevents the use of companies for defeating legitimate matrimonial property claims. This was explained by the Court of Appeal in GKW v RNK (Civil Appeal 605 of 2019) [2025] KECA 1475 (KLR) which held as folows.

“This Court in Lacheka Lubricants Ltd & Another v Chanandin & 4 Others (supra) went on to state:

“41.We are totally in agreement with the reasoning of the Court in PWK v JKG (supra). It would be totally unjust and unfair to deny the court jurisdiction to deal with a dispute involving distribution of matrimonial property, where the ownership of the claimed property is obfuscated through transfer of the property to a company which is either wholly controlled by the husband and wife as sole directors and shareholders, or by the husband as the main shareholder. In such situations, the corporate legal personality of the company is either obscured or deliberately ignored by the couple during coverture, and this requires the court to go behind the corporate veil to determine the actual beneficial ownership of the property. As stated in Muthembwa v Muthembwa (supra), section 17 of the Married Women’s Property Act gives the court wide powers to inquire into the company and the issue of ownership of the property and to make orders as the justice of the case may demand.” (Emphasis added)”

Conclusion and Emerging Principles
In conclusion, several clear principles can now be deduced from the recent decisions of the superior courts:

1. No Automatic 50:50 Division Article 45(3) guarantees equality of rights, not automatic equal ownership of matrimonial property.

2. Contribution Remains the Governing Test Distribution is determined according to the contribution of each spouse, whether monetary or non-monetary.

3. Non-Monetary Contribution Has Equal Legal Recognition Domestic work, child care, companionship, and management of family affairs are legally recognized contributions.

4. Each Case Depends on Its Facts No fixed formula exists for the distribution of Matrimonial Property. Courts have broad discretion to assess based on the evidence presented.

5. Equitable Remedies Remain Available Constructive trusts and resulting trusts continue to provide relief even where a formal marriage is absent. However, this is an exception rather than the general rule 6. Documentary Evidence Is Crucial Parties must keep records demonstrating both direct and indirect contribution to acquisition, development, or preservation of matrimonial assets.

How ESK Advocates LLP Can Assist

Matrimonial property disputes are among the most emotionally charged disputes in courts. As recent jurisprudence has shown, the outcome of such disputes depends on the quality of evidence presented regarding monetary and non-monetary contributions and the strategic application of various relevant legal principles. As ESK Advocates LLP, we are your best legal partner in such matters. At ESK Advocates LLP, we do not merely litigate such disputes but, most importantly, help clients protect what they have built and preserve what matters most.

Article By: Charles Chahilu
Associate Advocate

1.Introduction : The Quiet Revolution in Kenya’s Property Market

For decades, real estate in Kenya has followed a familiar script: acquire land, build, wait for appreciation, or lease for income. It is a model built on patience, capital, and often significant risk. But the market is changing: rising interest rates, tightening liquidity, shifting investor expectations, and evolving regulatory frameworks are forcing a rethink of traditional property ownership. Investors are becoming more cautious. Developers are facing financing constraints. Institutional capital is seeking structured, regulated investment vehicles.

In this changing landscape, Real Estate Investment Trusts (REITs) are emerging not just as an alternative- but as a potential structural shift in how real estate is financed and owned in Kenya. Yet despite their promise, REITs remain underutilised. Why? The answer lies in complexity particularly around legal structuring, regulatory compliance, and governance. 2.REITs: More than just another Investment Vehicle At their core, REITs transform real estate from a fixed asset into a tradable investment. Rather than owning property directly, investors buy units in a trust that owns and manages real estate assets.

This creates:

i. Liquidity in traditionally illiquid assets;

ii. Diversification across multiple properties;

iii. Access to professional property management; and Lower capital entry thresholds

1.Introduction : The Quiet Revolution in Kenya’s Property Market REITs effectively democratise real estate investment, which concept has transformed property markets globally. 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.

2.REITs: More than just another Investment Vehicle

At their core, REITs transform real estate from a fixed asset into a tradable investment. Rather than owning property directly, investors buy units in a trust that owns and manages real estate assets.

This creates:

i. Liquidity in traditionally illiquid assets;

ii. Diversification across multiple properties;

iii. Access to professional property management; and Lower capital entry thresholds

1.Introduction : The Quiet Revolution in Kenya’s Property Market REITs effectively democratise real estate investment, which concept has transformed property markets globally.

The case for REITs in Kenya has never been stronger for these reasons: Capital constraints are reshaping i. development Developers are increasingly struggling to secure traditional financing and construction costs continue to rise while banks are tightening lending conditions. REITs provide an alternative which allows developers to:

Raise capital from institutional investors

Spread risk

Unlock value from completed developments

This is particularly relevant for mixed-use developments, student housing, industrial parks and affordable housing

ii. Institutional investors are looking for yield Pension funds, insurance companies, and asset managers are actively seeking stable, income-generating investments. For institutional investors, REITs offer regulated exposure to real estate without operational risk.

REITs provide:

Predictable income Long-term capital growth

Portfolio diversification

iii. Real Estate needs liquidity Traditional property investments are illiquid and slow to exit.

REITs, particularly those listed on the Nairobi Securities Exchange, allow investors to buy and sell units, creating liquidity in the real estate market. This shift has the potential to fundamentally change how real estate is viewed as an asset class.

3.Types of REITs in Kenya: Understanding the Structures Kenya’s regulatory framework recognises three main REIT structures:

i. Income REITs (I-REITs)

These REITs invest in income-generating properties, such as: Office buildings, Shopping malls, Residential rental developments and Warehousing facilities. Investors receive regular income distributions from rental yields. These structures typically appeal to institutional and conservative investors.

ii. Development REITs (D-REITs)

Development REITs fund construction and development projects, Residential developments estates, and including: Mixed-use Commercial complexes. Returns are generated through: sale of units and capital appreciation. These structures offer higher returns but higher risk.

iii. Islamic REITs

Kenya also allows Sharia-compliant REITs, which exclude: interest-based financing and certain restricted sectors. These structures create opportunities regional and Middle Eastern capital

Current Kenyan REITs

4.The Legal Architecture of REITs in Kenya In Kenya,

REITs are regulated by the Capital Markets Authority (CMA), under the framework established by the Capital Markets Act and the Capital Markets (Real Estate Investment Trusts) (Collective Investment Schemes) Regulations. This regulatory oversight ensures: Investor protection, Governance transparency and Market stability. However, the above also introduces compliance obligations that require careful legal navigation.

REITs are not simple investment vehicles. They require a multi-layered legal structure, typically involving:

i. Promoter

This is party involved in setting up a real estate investment trust scheme. The promoter is regarded as the initial issuer of REIT securities and is involved in making submissions to the regulatory authorities to seek relevant approvals.

ii. Trustee

The Trustee is a person appointed under the trust deed as a trustee of the REIT and any investee trust. The Trustee may be a bank, a bank subsidiary or a licensed company. A trustee shall—

be independent of the promoter, the REIT manager and any property manager, valuer or project manager certifier of the real estate investment trust scheme;
be licensed by the Authority as a REIT trustee;
be independently audited; and
have a minimum issued and paid-up capital and non-distributable capital reserves of at least one hundred million shillings;
Holds assets on behalf of investors; Ensures regulatory compliance; Oversees governance of the REIT.

iii. REIT Manager The REIT Manager is a company incorporated in Kenya and licensed by the Authority to provide real estate management services in respect of a REIT. In most cases, the REIT manager is appointed by the Trustee with the prior approval of the Capital Markets Authority.

The REIT manager is tasked to undertake the following duties: acquire, manage, maintain and dispose assets of the scheme; account to the trustee and the REIT securities holders for any loss suffered by the scheme; maintain on behalf of the trustee, proper accounting records and other record to enable an accurate view of the fund to be formed; obtain tenants and manage tenancy arrangements; carry out or cause to be carried out all property management functions in compliance with Estate Agents Act; implement approved budgets, capital works and maintenance programmes. iv. Property Manager The Property Manager is appointed by the REIT manager with approval of the Trustee and shall be supervised by the REIT manager to ensure their compliance with the terms of the scheme documents and law. The Property Manager may: Handle tenant relationships; Oversee maintenance; Manage operational performance.

5.Tax Efficiency: One of REITs’ Biggest Attractions REITs benefit from favourable tax treatment in Kenya. These include: i. Corporate Tax Efficiency MAY 2026 eskadvocatesllp.co.ke REITs may benefit from tax transparency structures, allowing income to pass through to investors. This enhances investment returns. ii. Stamp Duty Considerations Property transfers into REIT structures may qualify for stamp duty relief, subject to compliance. This is particularly attractive for portfolio consolidation, institutional investments and large-scale developments. iii. Withholding Tax Investor distributions may attract withholding tax, depending on investor type, residency status and structure.

6.Conclusion:

From Ownership to Investment- A Market Evolution REITs represent more than a financial instrument. They signal a shift in how real estate is owned, financed, and traded. For investors, REITs offer diversification and liquidity. For developers, they unlock capital. For institutions, they create stable returns. But unlocking these benefits requires careful legal structuring and regulatory compliance. As Kenya’s real estate sector evolves, REITs are poised to become a central pillar of the market. The opportunity is not just to participate; but to lead.

How ESK Advocates LLP Can Support REIT Clients MAY 2026 eskadvocatesllp.co.ke ESK Advocates LLP provides strategic legal support across the REIT lifecycle: Structuring and Formation REIT structuring Trust documentation SPV structuring Regulatory Compliance CMA approvals Governance frameworks Ongoing compliance advisory Transaction Advisory Property acquisitions Development structuring Joint ventures Tax and Risk Advisory Tax structuring Stamp duty planning Risk mitigation ESK Advocates LLP stands ready to guide investors, developers, and institutions through this evolving landscap

Article By: Teresia Wamaitha
Managing Partner

International Trends and Lessons from the Kenyan Experience

Introduction

The rapid expansion of the internet and digital technologies has fundamentally transformed modern society. Communication, commerce, governance, and social interaction increasingly occur online. While these developments have created immense opportunities, they have also opened new avenues for criminal activity. Cybercrime ranging from online fraud and hacking to the spread of harmful digital contenthas become a global concern requiring coordinated legal responses.

In recent years, the international community has intensified efforts to develop legal frameworks aimed at cybercrime. However, these efforts have raised important questions about the balance between combating cyber threats and protecting fundamental human rights. Courts across the world have increasingly been called upon to examine whether cybercrime laws go too far in restricting freedom of expression and digital rights. A notable example can be seen in the Kenyan case of Bloggers Association of Kenya (BAKE) v Attorney General & 6 others, which illustrates the challenges that arise when governments attempt to regulate online speech.

The Global Rise of Cybercrime Regulation

Cybercrime differs from traditional crime in one crucial respect: it rarely respects national borders. A cybercriminal operating in one country may target victims in multiple jurisdictions within seconds. This cross-border nature makes it difficult for individual states to effectively investigate and prosecute offences without international cooperation. Recognizing this challenge, international organizations have developed frameworks to harmonize cybercrime laws and facilitate cooperation between states. One of the earliest and most influential instruments is the Budapest Convention on Cybercrime, adopted by the Council of Europe in 2001.

The convention established common definitions for cyber offences such as illegal access to computer systems, online fraud, and data interference. It also introduced mechanisms for mutual legal assistance and investigation. cross-border Despite its importance, the Budapest Convention has faced criticism for being largely European in origin and lacking universal participation. Many developing countries were not involved in its negotiation and have therefore called for a more inclusive international framework

In response to these concerns, the United Nations has been working toward the adoption of a comprehensive UN Convention on Cybercrime. The proposed treaty aims to strengthen global cooperation, harmonize cybercrime legislation, and provide technical assistance to countries that lack the capacity to combat digital crime effectively.

The Human Rights Dimension of Cybercrime Laws

While cybercrime legislation is essential for protecting digital infrastructure and preventing criminal activity, it has also generated significant debate regarding its impact on fundamental rights. Laws intended to regulate online conduct can sometimes be drafted in overly broad terms, potentially criminalizing legitimate speech. Human rights organizations such as Amnesty International and Human Rights Watch have repeatedly warned that poorly designed cybercrime laws can be misused to suppress dissent, restrict journalism, or silence critics of government policies. Provisions that criminalize “false information” or “misleading publications” are particularly controversial because they may be interpreted subjectively.

This tension between cybersecurity and freedom of expression has increasingly become a central issue in international legal discourse. The challenge lies in crafting legal frameworks that effectively address cyber threats while maintaining respect for democratic values and human rights.

Lessons from the Kenyan Experience

The Kenyan case of Bloggers Association of Kenya (BAKE) v Attorney General & 6 others provides a useful illustration of these tensions.

The case involved a constitutional challenge to certain provisions of Kenya’s cybercrime legislation that criminalized the publication of false or misleading information online. In its decision, the Court of Appeal of Kenya declared the contested provisions unconstitutional on the grounds that they were vague and overly broad. The court observed that such provisions could easily lead to arbitrary enforcement and might discourage individuals from participating in legitimate online discussions. The judgment reaffirmed that freedom of expression applies equally in digital spaces and that restrictions on speech must meet strict constitutional standards. Importantly, the court acknowledged the government’s legitimate interest in addressing cybercrime but emphasized that this objective cannot be pursued at the expense of fundamental rights. Although the decision was grounded in Kenya’s constitutional framework, its reasoning reflects broader global concerns regarding the regulation of digital expression.

Implications for International Cyber Law

The Kenyan experience highlights a critical issue confronting policymakers worldwide; how to design cybercrime legislation that effectively addresses criminal activity without undermining civil liberties. As countries continue to develop domestic cybercrime laws, courts will likely play an increasingly important role in reviewing their compatibility with constitutional and international human rights standards.

International instruments such as the proposed UN Convention on Cybercrime must also take these concerns into account. A successful global framework will need to strike a careful balance between empowering law enforcement agencies and safeguarding individual rights. Moreover, the international community must recognize that digital rights are an extension of traditional human rights. Freedom of expression, privacy, and access to information remain essential components of democratic societies, regardless of whether communication occurs offline or online.

Conclusion

Cybercrime presents one of the most complex legal challenges of the modern era. Its borderless nature demands international cooperation, coordinated legal frameworks, and technological expertise. At the same time, the regulation of cyberspace must remain consistent with fundamental principles of human rights and democratic governance. The case of Bloggers Association of Kenya (BAKE) v Attorney General & 6 others serves as an important reminder that courts can play a crucial role in maintaining this balance. By scrutinizing cybercrime laws and ensuring they comply with constitutional protections, judicial institutions help safeguard the freedoms that underpin open and democratic societies. As international efforts to regulate cybercrime continue to evolve, the lessons drawn from national experiences such as Kenya’s will remain valuable in shaping a more balanced and rights-respecting global approach to cybersecurity.

Article By: Daniel Munyoki
Associate Advocate

Introduction
Kenya’s is undergoing its most significant legal transformation in three decades. The Public Benefit Organizations Act, 2013 (PBO Act) has replaced the long-serving NGO Coordination Act of 1990 as the primary legal framework governing non-governmental and nonprofit organizations operating in the country. For existing NGOs, this means restructuring. For new entrants, it means navigating an entirely new compliance terrain

Whether you are a philanthropist, a faithbased organization, a community group, a development agency or a corporate looking to set up a social impact vehicle, understanding the PBO Act is important. Any organization that raises funds, provides services, advocates for social change or operates for the public good without distributing profits likely falls within the scope of the PBO Act. Non-compliance exposes organizations and their leadership to de-registration, financial penalties and reputational risk.

A New Era: The Shift from the NGO Act to the PBO Act

For over 30 years, civil society organizations in Kenya operated under the NGO Coordination Act, Cap 134, a legislation that was, by most assessments, ill-suited to the complexity and scale that Kenya’s third sector had grown into.

The Act was narrow in scope, weak on governance standards and provided limited accountability mechanisms. The PBO Act marks a fundamental departure. It is designed around the principle that organizations serving the public benefit deserve both recognition and accountability to their donors, their beneficiaries and the Kenyan public. The key differences between the two regimes are significant. Under the old NGO Act, the sector was regulated by the NGO Coordination Board with a focus only on NGOs whereas the new law establishes the Public Benefit Organizations Regulatory Authority (PBORA), which has a broader mandate covering all civil society entities pursuing a public benefit purpose.

Registration under the old regime issued a simple Certificate of Registration. Under the PBO Act, organizations also receive a Certificate of Registration under Section 10 but one that carries far greater legal weight, conferring on the organization the status of a body corporate with perpetual succession, the capacity to own property, enter contracts and sue or be sued in its own name. Governance standards that were minimal or unenforced under the NGO Act are now mandatory, covering board structures, annual reporting and statutory audits. Financial disclosure requirements have been strengthened, and the penalties for non-compliance have been restructured to include a range of graduated sanctions rather than the blunt instrument of de-registration alone.

Who Qualifies as a PBO Under the New Law?

The PBO Act defines a Public Benefit Organization broadly as, any Organization that is voluntary, non-governmental, nonprofit distributing, self-governing and that carries out activities for the benefit of the public or a section of the public.

This covers a remarkably wide range of entities, MAY 2026 eskadvocatesllp.co.ke including Non-Governmental Organizations engaged in development, humanitarian or advocacy work; Community-Based Organizations with public benefit objectives; charitable trusts and foundations established for public purposes; faith-based organizations engaged in social service delivery; professional associations and networks operating for the public good; and research institutes and think tanks serving broader societal interests.

The Registration Process under the PBO

Registration under the PBO Act is administered by PBORA which is the regulatory body responsible for registration, monitoring compliance and maintaining the PBO register. The process is more rigorous than what many Organizations were accustomed to under the old NGO Act however, it is entirely manageable with the right preparation and guidance. The following steps outline the registration journey

Step 1: Name Search and Reservation

An applicant must reserve the proposed organization name before submitting a registration application. This is done via the eCitizen or the NGO Board portal at ngoboard.ecitizen.go.ke.

Step 2: Prepare Registration Documents

The Constitution is the cornerstone of your application. It must cover your public benefit objectives, governance structures, membership rules, financial management and dissolution clauses, all in compliance with Section 8 of the PBO Act. A poorly drafted governing document is the single most common cause of application delays and rejections. Other registration documents include, application forms 1, 2 and 3, the minutes, details of the officials, a proposed oneyear budget and other supporting documents.

Step 3: Additional documents for International PBOs

In addition to the general requirements above, international organizations must comply with the following: At least onethird of board members must be Kenyan citizens; Provide the constitutions of the organization’s foreign branches and evidence of governance structures abroad; Appoint a Kenyan authorized agent who is a Kenyan citizen resident in Kenya, duly authorized to receive official summonses, notices, and inquiries on behalf of the organization; Ensure that foreign staff hold appropriate immigration and work permits to operate in Kenya; and Registration fee for international NGOs: Kshs. 30,000/= (payable via eCitizen portal).

Step 4: Submit the Application

All the documents are submitted to PBORA for review. PBORA will assess the application against the requirements of the Act and may request additional information or clarification. A fee is payable on the e-citizen portal.

Step 5: Obtain the Certificate of Registration

Upon approval, your Organization receives its Certificate of Registration under Section 10 of the PBO Act. This certificate is conclusive proof that the Organization has met all registration requirements, and it is duly registered under the Act, it is a body corporate with perpetual succession, and it is authorized to operate throughout Kenya as specified in its constitution or certificate.

Step 6: Tax and KRA

Registration Following registration, the Organization must register with the Kenya Revenue Authority for a PIN and apply for taxexempt status under the Income Tax Act. This step is critical and should not be delayed, as processing times can affect the Organization’s ability to receive and manage funds.

Step 7: Ongoing Compliance

Registration is the beginning, not the end. Annual returns, audited financial statements and public benefit reports must be filed with PBORA on a continuing basis. Appeals process under the PBO Act Section 17 of the PBO Act provides for review by the Authority and Appeal to the Tribunal. If an applicant is not satisfied with the decision of the Authority, they can apply for a review or an appeal.

The Act provides for PBO Tribunal which deals with appeals from the Authority’s decision. An applicant has 30 days in which they can appeal upon receiving a written notice of the decision. The PBO Tribunal has 60 days to hear and determine the appeal. The Tribunal may confirm, set aside, vary or quash the order or decision in question. Any party aggrieved by the decision of the Tribunal may appeal to the High Court and the decision of the High Court shall be final.

Key Compliance Registration

Obligations after The PBO Act imposes a range of ongoing compliance obligations that Organizations must meet to maintain their good standing with PBORA.

1. Annual Returns and Public Benefit Reporting

Registered PBOs must file annual returns with PBORA within six months of the end of each financial year. Returns include audited financial statements, a narrative public benefit report and disclosures on governance changes. These documents become part of the public record underscoring the Act’s emphasis on transparency and accountability.

2. Governance and Board Obligations

The PBO Act prescribes minimum governance standards. Board members must be fit and proper persons; conflicts of interest must be managed and disclosed; and boards must meet at least annually, with best practice recommending quarterly meetings. Failure to maintain proper governance is a standalone ground for deregistration.

3.Foreign Funding and International Partnerships

Organizations receiving funds from abroad must report these inflows to PBORA and, in some categories of activity, obtain prior approval before accepting such funds. The Act also empowers the Cabinet Secretary to impose limits on foreign funding for activities deemed sensitive to the national interest. This provision requires careful legal structuring particularly for Organizations with large international donor bases or those working in areas of advocacy or civic education.

4.Tax Compliance and KRA Obligations

PBOs are eligible for income tax exemption under Section 13 of the Income Tax Act but this status is not automatic. Organizations must apply to KRA and maintain ongoing compliance to preserve it. VAT obligations, withholding tax on payments and import duty exemptions each carry their own regulatory requirements that must be carefully managed throughout the Organization’s existence.

Penalties for Non-Compliance: What is at stake?

The PBO Act provides PBORA with enforcement powers across a tiered range of sanctions. Depending on the nature and severity of the non-compliance, an organization may face the issuance of compliance notices and corrective directives, financial penalties for late filing or failure to maintain records, suspension of operations pending investigation, cancellation of registration effectively shutting down the Organization, or personal liability for directors and officers in cases of gross misconduct.

The Act does establish an appeals mechanism through the PBO Tribunal, providing a structured dispute resolution pathway for aggrieved Organizations.

How ESK Advocates LLP can Help: Your PBO Legal Partner in Kenya

MAY 2026 eskadvocatesllp.co.ke Our firm provides end-to-end legal support to Organizations navigating the PBO Act. We work with founders, executive directors, boards and international donors combining regulatory expertise with practical commercial insight to help you build Organizations that are not only legally sound, but built to last.

We offer a comprehensive range of services tailored to the needs of PBOs and aspiring civil society Organizations. Our registration and incorporation service handles the entire PBO and NGO registration process from name search through to the Certificate of Compliance.

We draft bespoke Constitutions aligned with the PBO Act’s requirements and your specific mission. Our governance advisory work covers board structuring, governance policies, conflict-of-interest frameworks and board induction programs. On the tax side, we handle PIN registration and tax-exempt status applications with KRA, as well as ongoing tax advisory for PBOs. We conduct annual compliance audits to assess your organization’s standing against PBO Act obligations before regulators come knocking.

We also assist with the preparation of annual returns, public benefit reports and coordination of statutory audits. For Organizations with an international dimension, we advise on structuring and approvals for foreign donor funding within the PBO regulatory framework. And where disputes arise, we represent Organizations before PBORA, the PBO Tribunal and in court proceedings involving regulatory and compliance matters.

By : Joyce Nduta
Holding-Over Advocate

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

A TURNING POINT FOR KENYA’S CARBON MARKET

Introduction

KOKO Networks built a bold business model around bioethanol cooking fuel distributed through a nationwide network of smart dispensers. Millions of Kenyan households used its clean-cooking solution as an alternative to charcoal.

However, the company’s financial model relied heavily on generating and selling carbon credits linked to the emissions reductions achieved through cleaner cooking technologies. When regulators declined to authorize the scale of carbon credits the company sought to issue, the model became financially unsustainable, ultimately contributing to the firm’s shutdown. While the circumstances are complex, the broader implications for the Kenya carbon credits sector are significant.

This article highlights three important lessons: i. Carbon credits are now subject to increasing regulatory scrutiny ii. Measurement and verification standards are becoming more stringent Commercial models must align with national climate policy and international carbon market rules For investors and climate innovators, the message is clear: carbon projects must be structured as regulatory projects first and commercial projects second.

Kenya Carbon Credits: A Rapidly Evolving Regulatory Framework

Kenya has taken decisive steps to establish a formal legal framework governing the generation and trading of carbon credits. The Climate Change (Amendment) Act 2023 introduced mechanisms enabling Kenya to participate in international carbon markets under the Paris Agreement. The legislation empowers the government to authorize carbon projects and enter into agreements for emissions reduction trading. Building on this framework, the Climate Change (Carbon Markets) Regulations 2024 now provide operational rules governing carbon project development in Kenya.

Key features of the regulatory framework include: i. National Authorization of Carbon ProjectsAll carbon projects must obtain formal approval before generating tradable carbon credits. ii. Community Benefit-Sharing RequirementsKenya has introduced progressive rules requiring revenue sharing with local communities, particularly for land-based carbon projects. iii. National Carbon Credit Registry- The government is establishing a national registry to track carbon credits and prevent double counting. iv.

Alignment with the Paris Agreement- The framework enables Kenya to participate in international carbon trading mechanisms under Article 6 of the Paris Agreement. v. Primary agencies include the State Department of Environment which shall oversee Climate Directorate and carbon project approvals and the National Environment Management Authority (NEMA) for environmental compliance. The National Treasury may later manage auction revenue if a cap-and-trade scheme is introduced. For international investors, developments significantly enhance the credibility and bankability of Kenya carbon credit projects.

The International Dimension: Lessons from the UK Carbon Market

Kenya’s regulatory approach reflects a broader global trend toward more structured carbon markets. A useful comparison can be drawn with the United Kingdom. The UK operates the UK Emissions Trading System (UK ETS) — a cap-and-trade scheme that sets limits on greenhouse gas emissions from major industries and allows companies to trade emissions allowances. The UK Emissions Trading Registry is a secure online application “like a bank account” for allowances.

Operator Holding Accounts (OHAs) and Aircraft Holding Accounts (AOHAs) store allowances and verified emissions data. Trading accounts (unlinked to compliance) allow market trading.The UK also maintains a Kyoto Protocol Registry, now used for international units. This robust digital registry underpins UK ETS integrity.

Beyond the compliance market, the UK government has also introduced Principles for Voluntary Carbon Market Integrity aimed at strengthening the voluntary carbon market, including: i. enhanced verification and integrity standards for carbon credits ii. regulatory oversight to prevent greenwashing transparency rules for carbon credit transactions The UK is positioning itself as a global hub for climate finance and carbon trading.

Importantly, many corporations participating in these markets seek high-quality carbon credits from international projects, particularly in emerging markets. This creates a direct commercial link between Kenya’s carbon projects and international carbon markets. This intersection between domestic carbon regulation and international climate finance is where significant commercial opportunities will emerge.

Comparative Study and Attendant Risks

Key contrasts between the UK and Kenyan systems (and associated risks) include:
i. Registry & Infrastructure:
The UK ETS has a mature digital registry for allowances and units. Kenya’s registry is newly formed and untested. Risk: Credit-tracking may be fragmented or non-transparent infrastructure is built. until digital
ii. Compliance vs Voluntary Markets:
UK compliance (ETS) is well-defined; Kenya currently has no nationwide cap-andtrade, relying on voluntary trades. Risk: Without a compliance market or price floor, Kenyan credits may lack guaranteed demand/pricing, hurting confidence. investor
iii. Monitoring, Reporting & Verification (MRV):
MRV refers to Measurement, Reporting, and Verification, a crucial framework under the United Nation Framework Convention on Climate Change (UNFCCC) used to track greenhouse gas (GHG) emissions, mitigation actions, and climate support and ensures transparency and accuracy in carbon markets and national climate pledges. UK MRV procedures are codified under EU-derived regulations. Kenya must develop its own MRV protocols (likely based on UNFCCC/CDM rules) and capacity for verification. Risk: Weak MRV could undermine credit integrity and investor trust.

i. Permanence/Reversals:
UK allowances (ETS) assume permanent emission reductions. Kenya’s regulations require projects to account for reversals. The UK voluntary principles also insist on buffers/insurance. Risk: Kenya must define how to handle reversals (e.g. forest fires); failure could devalue credits.

ii. Double-Counting / Corresponding Adjustments:
The UK registry cleanly tracks units; UK compliance credits are accounted in national inventories. Kenya faces the CORSIA correspondingadjustment issue – its delay was fatal for KOKO Networks. Risk: If Kenya does not commit to clear adjustment rules, international buyers will avoid Kenyan credits to prevent double-counting.

iii. Revenue Sharing / Social Contributions:
Kenyan law mandates local community benefit-sharing for projects; the UK ETS instead funnels revenue to government. Risk: Uncertainty over tax treatment and benefit-sharing could complicate project economics. UK practice suggests transparency in such use.

iv. Legal Certainty & Enforcement:
UK law on carbon is settled and backed by active regulators. Kenya’s regime is nascent. Risk: Ambiguities in draft laws/regulations could lead to disputes. Teresia Wamaitha Managing Partner

v. Investor Protections:
UK issuers and buyers can rely on established contract law and dispute mechanisms. Kenya’s legal frameworks for carbon contracts are undeveloped. Risk: Investors may demand strong arbitration clauses or sovereign guarantees (as KOKO did) to mitigate regulatory risk.

vi. Market Access:
UK projects have direct access to the EU and international markets (e.g. CERs, carbon tax avoidance markets). Kenyan projects currently are limited to voluntary markets or projects with host-country approvals (e.g. CORSIA). Risk: Without bilateral linkages or clear policies, Kenyan developers may miss out on larger carbon flows.

vii. Environmental and Social Governance (ESG) Standards:
The UK government actively promotes high-integrity credits and expects Free, Prior, and Informed Consent and leakage mitigation. Kenya’s laws require community agreements, but enforcement is evolving. Risk: If Kenyan projects neglect social safeguards, they may face reputational or legal challenges internationally.

Investment Opportunities in the Kenya Carbon Credit Market
Despite recent controversies, Kenya remains one of Africa’s most promising jurisdictions for carbon market development.

Several sectors offer strong commercial potential:
i. Renewable Energy Carbon Credits
Kenya’s leadership in geothermal and renewable energy creates opportunities for projects generating carbon offsets linked to clean power generation.
ii. Nature-Based Carbon Projects
Forestry conservation, mangrove restoration and regenerative agriculture initiatives can generate large volumes of carbon credits while delivering biodiversity benefits.

iii. Climate Technology and Carbon Removal
Emerging climate technology companies are exploring innovative solutions including direct air capture and biocharbased carbon removal.
iv. Clean Cooking Projects
Although the KOKO model faced regulatory challenges, clean cooking remains one of the most scalable carbon credit opportunities across Africa. For investors and developers, the Kenya carbon market represents a growing intersection of infrastructure international finance.

Structuring Bankable Carbon Projects in Kenya
Developing a successful carbon project requires more than technological innovation. Projects must be structured in a way that satisfies regulators, investors and international credit buyers. Critical considerations include:
i. Regulatory Compliance-Ensuring projects meet the approval requirements under Kenya’s carbon market regulations.
ii. Carbon Ownership and Land RightsEstablishing clear legal rights to the carbon credits generated by a project.
iii. Carbon Credit Offtake AgreementsSecuring long-term purchase agreements with international buyers.
iv. Community Structures- Designing Benefit-Sharing transparent arrangements that comply with Kenya’s community participation rules.
v. Investment and Financing StructuresCreating project vehicles that attract institutional and climate finance investors.

The Strategic Role of Legal Advisors in Carbon Markets
As carbon markets become more sophisticated, legal structuring is emerging as a decisive factor in project success.

Carbon projects sit at the intersection of several complex areas of law, including:
i. environmental and climate regulation
ii. cross-border carbon trading rules
iii. project finance and investment structuring
iv. land rights and community benefit agreements
v. International carbon credit purchase contracts Companies entering the Kenya carbon credit market increasingly require advisors capable of navigating these overlapping legal frameworks.

Conclusion

As global demand for high-integrity carbon credits continues to grow, Kenya is emerging as a strategic destination for climate investment. Businesses seeking to enter this market must ensure that their projects are commercially viable, legally robust and aligned with international carbon market standards. With the right legal and strategic guidance, Kenya’s carbon market presents a compelling opportunity for investors and climate innovators alike. Reach out to us for a consultation through our contact details below.

By Teresia Wamaitha
Managing Partner