Bench to rule on odious debts petition

Busia Senator Okiya Omtatah. [FILE]

A constitutional showdown over the legality of Kenya’s towering Sh7 trillion public debt yesterday edged closer to a decisive moment after a three-judge High Court bench adjourned proceedings in a petition that could reshape how the country borrows money and who bears responsibility when borrowing goes wrong.

The bench comprising Justices Francis Gikonyo, Moses Ado, and Roselyne Aburili sitting at Milimani Law Courts in Nairobi postponed the matter and set June 25, 2026, as the date for a ruling on whether the High Court has the power to hear the matter at all.

That single question of jurisdiction could determine whether one of the most ambitious constitutional petitions in Kenya’s history, filed by Busia Senator Okiya Omtatah Okoiti alongside eight co-petitioners, including Eliud Karanja Matindi, Bernard Muchiri Muchere, and six others, proceeds to a full hearing or collapses at the threshold.

At the centre of the case, filed on April 24, 2025, is a challenge to the constitutional and legal validity of what the petitioners term  “odious debts” amounting to Sh6,950,163,132,328, allegedly accumulated between the 2014/2015 and 2024/2025 financial years under former President Uhuru Kenyatta and President William Ruto’s administrations.

The petition also includes Eurobond loans totaling USD 7.1 billion (about Sh923 billion).

The adjourned proceedings followed an application by the Attorney General challenging the High Court’s jurisdiction.

State Counsel Samwel Kaumba, representing several government officials and institutions under the Ruto administration, including Cabinet Secretary for the National Treasury John Mbadi, Principal Secretary Chris Kiptoo, the National Assembly, the Director General of the Public Debt Management Office, and the Governor of the Central Bank of Kenya, urged the bench to first determine the jurisdictional question and to ultimately dismiss the petition for lack of jurisdiction.

"The subject matters raised in the petition fall within the mandate of the Auditor-General, and the Auditor-General is actually having active conduct of the audit as a special audit," Kaumba told the court.

The petitioners rely on seven legal doctrines, odious debt, derivative unconstitutionality, illegality, ostensible authority, public policy, legitimate expectation, and restitutionary remedies, to argue that Kenya’s debt is unconstitutional, void, and unenforceable against citizens.

They contend that out of Sh9,741,706,469,035 borrowed between 2014/2015 and 2024/2025, only Sh2,791,543,336,707 barely 28.6 percent, received proper parliamentary authorisation through Appropriation Acts.

They further argue that the remaining Sh6.95 trillion was borrowed without constitutional approval under Article 220(1)(c) and Section 50(3) of the Public Finance Management Act.

"The Executive borrowed without parliamentary appropriation contrary to Articles 220(1), 221, and PFMA Sections 15(2)(c), 50(3)), deposited proceeds offshore (violating Article 206(1)), and used or misappropriated funds without tying them to budgeted development expenditure. These acts taint the entire transaction chain, rendering the debts odious. Lenders cannot enforce them against Kenyan taxpayers," the Senators.

They also challenge Eurobond loans amounting to USD 7.1 billion, alleging proceeds were held in offshore accounts at JP Morgan Chase and Citibank in New York, contrary to constitutional requirements.

"We challenge the constitutional and legal validity of odious debts amounting to Sh6,950,163,132,328 incurred by the Respondents over the financial years 2014/2015 to 2024/2025, including the Eurobond loans totalling USD 7.1 billion approximately Sh 923 billion," Omtatah told the judges.

The Petitioners urged the court to declare that the impugned debts are odious, unconstitutional, illegal, and unenforceable against the people and taxpayers of Kenya.

They also argue that Kenya’s borrowing meets the threshold of “odious debt” under international law, citing precedents including the Tinoco Arbitration (1923), Ecuador’s sovereign debt audit (2008), and rulings from Mozambique’s Constitutional Court.

"Kenya cannot be compelled to repay what the Constitution never authorized," the petitioners state. "The debt is odious. The debt is void. The debt shall not be repaid."

The petition names a wide range of respondents, including former President Uhuru Kenyatta as first Respondent, the current National Executive under President Ruto, Treasury officials, National Assembly , the Central Bank of Kenya, the Public Debt Management Office, and the International Monetary Fund (IMF).

Former Treasury CSs Henry Rotich, Ukur Yatani, and Prof Njuguna Ndung’u, former Principal Secretary Kamau Thugge, former Attorney General Prof Githu Muigai, former Auditor-General Edward Ouko, former Controller of Budget Agnes Odhiambo, current Auditor-General Nancy Gathungu, and Controller of Budget Margaret Nyakang’o are also listed.

Omtatah also told the court that several former officials have declined to respond, including ex- president Uhuru, former AG Muigai, former Treasury CSs Henry Rotich, Ukur Yatani, and Prof Ndung'u, and former PS Thugge.

It also emerged that separate applications were also pending before the court, seeking to expunge several parties from the proceedings, among them the IMF, former Controller of Budget Agnes Odhiambo, former Auditor-General Edward Ouko, Controller of Budget Margaret Nyakang'o, and Auditor-General Nancy Gathungu.

Lawyer Lawson Ondieki, appearing for the IMF, informed the court that his client had filed an application to be removed from the proceedings.

"We have filed an application to be struck out of these proceedings on the basis that the IMF is not a proper party in this petition,"

Senator Omtatah vigorously opposed the application, insisting the institution's role in shaping Kenya's borrowing framework makes it an indispensable party.

"The IMF is a key player in this matter. You cannot discuss Kenya's debt without addressing the role of the IMF in the borrowing framework and conditionalities that shape it," he told the court.

The petitioners argue in their submissions that the IMF's "On-lent loan" of Sh50 billion, rolled over from 2023/2024 to 2027/2028, has no basis in any Kenyan statute, and that the institution should be ordered to cancel the facility.

The court granted all parties, including the IMF, seven days to file responses and submissions before determining jurisdiction and related applications to strike out parties.

Omtatah also dismissed the AG's argument and had the case struck out for lack of jurisdiction noting that the move is as a delay tactic.

In their submissions, the petitioners note that the first Eurobond was borrowed in June 2014, over eleven years ago, that investigations into the missing proceeds were reported as ongoing across multiple audit years before quietly disappearing from reports after 2017/2018, and that a constitutional court cannot be ousted by a parliamentary request for an audit.

"If this is not a ripe controversy, no constitutional dispute will ever be ripe," they write.

In response to concerns that several respondents had yet to file responses or secure legal representation, the bench granted all parties, including the IMF, a final seven-day window to file their responses and written submissions before the court considers both the jurisdictional question and the applications to strike out parties.

In the case, Omtatah and his co-petitioners are seeking various remedies.

The petitioners want the court to declare former President Kenyatta and named respondents from his administration personally liable under Article 226(5) of the Constitution for Sh4,605,840,278,922 in unauthorised borrowings between 2014/2015 and 2021/2022.

They want the current Ruto's administration and relevant officials held personally liable for a further Sh2,250,325,905,200 incurred between 2022/2023 and 2024/2025.

Beyond personal liability, they seek permanent injunctions prohibiting Ruto's government from borrowing outside Appropriation Acts, from repaying what they term odious debts, and from operating a debt ceiling pegged to gross domestic product.

They also want the Public Finance Management (Amendment) Act of 2014 quashed, along with several sections of the PFMA, offshore accounts used to hold Eurobond proceeds, and multiple press releases issued by the National Treasury and the Ethics and Anti-Corruption Commission.