Why High Court has declined to stop sale of Kenya Pipeline Company

The High Court has declined to issue conservatory orders temporarily halting the government's planned partial sale of Kenya Pipeline Company (KPC) following a petition filed by Busia Senator Okiya Omtatah and two others.

Omtatah and two co-petitioners, who are seeking to stop the government from selling a 65 per cent stake in KPC through an Initial Public Offering (IPO) said to be nearing closure.

In a brief ruling, Justice Lawrence Mugambi on Monday, February 23, 2026, rejected the application by Okiya Omtatah and co-petitioners Bernard Muchiri Muchere and Naomi Nyakerario Misati for interim orders, ruling it premature to grant substantive relief on a mention date before all parties are fully heard 

"The petitioner urges me to consider the application fora conservatory order, but the respondents have strongly argued against the grant of the conservatory order. Same thing first, that the matter is for mention and thus it would be unfair to grant a conservatory order when ideally they have not been heard," Justice Mugambi ruled.

The judge further noted that there were deeply contested jurisdictional issues that had to be resolved before any interim relief could be granted, particularly whether a similar matter had already been conclusively decided by a fellow judge.

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"Most fundamentally, it is an utterly contested issue that the issues raised in the present petition are similar to what Justice Bahati Mwamuye has conclusively decided on merits in petition numbers E517, E546, E714, E625, E621 and E747 of 2025 last week. That would effectively mean, if correct, that there is a jurisdictional bar which, if established, would be a concrete bar for this court to assume jurisdiction," the judge stated.

Justice Mugambi also noted that the court had not fully assessed whether the application met the threshold for conservatory relief.

"The court has not had a chance to appraise itself fully on whether the application for which it is being called to issue a conservatory order does in fact meet the threshold of a prima facie case, the prejudice and the public interest," he said.

The court instead directed that the preliminary objection filed by the respondents and the application for conservatory orders be heard together on March 18, 2026.

The court decision comes after Omtatah urged the court to issue conservatory orders to preserve the substratum of the petition, warning that the IPO process was at an advanced stage and risked closure before the court could make a meaningful determination.

He told the court that his petition was distinct from those already decided by Justice Bahati Mwamuye last week on Thursday, pointing to the unique constitutional questions it raised.

"We are requesting that you preserve the substratum of this matter, which the other court recognized was different from the petitions that were before it, given the fact that the IPO is just about to close, so that the court can have an opportunity to make a decision whether the matter should be certified as raising a substantial question of law for consideration by a bench," Omtatah submitted.

The senator further outlined the constitutional questions he said warranted the grant of conservatory orders, including whether the IMF could direct Kenya's fiscal decisions in disregard of the Constitution.

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He questioned the legality of privatising a publicly owned strategic asset and whether international lenders enjoyed immunity from Kenyan courts.

"This court needs to determine the question of whether the IMF can micromanage the Kenyan government to the extent that it ignores the constitutional provisions and budgeting processes, borrowing, and generally the use of public money. We also need to determine whether the IMF can be sued locally or not, and whether its immunity can override the provisions of the Constitution where it requires actions that result in violating the Constitution," he argued.

Omtatah, in court documents, argued that the government's plan to sell 65 per cent of KPC through the IPO was unconstitutional and driven by external pressure.

"This plan is unconstitutional, unlawful, and anti-sovereign. It is not a decision of the people of Kenya, but one driven by external pressure from the International Monetary Fund," Omtatah stated.

The senator pointed to KPC's financial performance as justification for retaining the company in public hands, noting it posted KSh 6.87 billion in profit in 2024 and paid KSh 7 billion in dividends to the Treasury.

Supporting Omtatah's submission, Nyakerario, through lawyer Kibe Mungai, urged the court to grant conservatory orders and empanel a multi-judge bench to hear the matter, arguing it raised issues that went to the heart of Kenya's constitutional order.

 "This petition strikes at the very heart of our constitutional order and raises issues of public finance and national sovereignty that deserve not only the empanelment of a bench, but also the granting of a conservatory order," he submitted.

Mungai also raised concerns about the long-term consequences of selling profitable public assets.

"All countries, including Singapore, maintain public investments to ensure governments can raise revenue beyond direct taxation. If we allow the sale of public assets purely for budgetary reasons, Kenya risks increasing its tax burden on citizens," he argued.

Co-petitioner Bernard Muchere raised questions about the legitimacy of the shares being offered in the IPO, arguing that what was on offer did not match KPC's original share structure as established at incorporation.

He urged the court to scrutinise the transaction and determine whether the shares being sold actually belonged to the Kenya Pipeline Company, known in law.

"What is being offered is about 11 billion shares at Kenya Shillings nine per share, but the total shares are over 19 billion, and the par value is Kenya Shillings 0.02. The question is, is what is being offered for the Kenya Pipeline Company or a different company?" Muchere posed.

He further pointed to the absence of any resolution authorising the subdivision of shares, casting doubt on the legal basis of the entire offering.

"Kenya Pipeline Company, as per their Memorandum and Articles of Association, has a share capital of one million, because there are 50,000 shares at Sh 20 per share. There is no resolution which subdivided the shares to that level," he submitted.

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State counsel Samuel Kaumba vehemently opposed the conservatory orders on three grounds: that the matter was listed for mention only, that prior court directions required the application seeking empanelment to be determined first, and that the issues had already been decided by Justice Mwamuye in January this year.

"There must be order in litigation, and that order must be guided by the rules of procedure. A substantive order without allowing parties to be heard cannot issue on a mention date," Kaumba submitted.

In the case, Omtatah raises additional constitutional concerns, including alleged IMF conditionalities undermining Kenya's sovereignty and over KSh 97 billion in unaccounted retained earnings at KPC.

The petitioners also challenge the lack of public participation, irregular appointments at the Privatisation Commission, and the use of a Sessional Paper rather than legislation to approve the privatisation process.

The judge directed all parties to file their responses and submissions within 14 days ahead of the hearing of the preliminary objection and conservatory order application on March 18, 2026.