The High Court has rejected NCBA Group’s attempt to block enforcement of a ruling that struck down the 2019 stamp duty waiver granted for the NIC Group PLC and Commercial Bank of Africa merger, allowing the Kenya Revenue Authority to pursue KSh 384.5 million in duty immediately.
- •NCBA told the court it faced “substantial loss” if forced to pay KSh 384.5 million before the Court of Appeal hears its challenge to the April ruling.
- •The bank argued there was no clear legal mechanism to secure a refund if it ultimately succeeded, and warned the immediate payout would disrupt its operations, deposits, and planned integrations linked to the merger.
- •The decision hands petitioner Okiya Omtatah another victory in a dispute that began in 2019 when NIC and CBA banks merged to form the current entity.
Justice E.C. Mwita dismissed NCBA’s application for a stay of execution, ruling that the trial court has no power to suspend a declaration of invalidity once it finds that an action or legal instrument violates the Constitution.
“The fact that a declaration of invalidity takes immediate effect was articulated by the Court of Appeal… that the essence of granting stay would mean that a law or [an action] that has been found to be constitutionally infirm will continue being in operation pending the hearing of the appeal.”
The judge wrote.
The Chacha Mwita court reaffirmed the court’s April 4, 2025 judgment that declared Legal Notice No. 112 of June 26, 2019 unconstitutional. The notice, issued by the Treasury, had exempted the merger instruments from stamp duty under Section 106 of the Stamp Duty Act.
NCBA's lawyers maintained that enforcing the judgment “will undermine the financial structure of the merger” and negatively affect capital allocation and liquidity. They also insisted that public interest favored maintaining the status quo until the appeal is resolved.
The court rejected those positions.
“I do not think the applicant’s fear that it will not get a refund is well founded. The argument that the applicant will suffer substantial loss is also not well founded..”
Justice Mwita wrote.
He added that KRA, as a public entity, is capable of refunding the money if the bank wins at the appellate stage.
Okiya Omtatah opposed the stay application, arguing that declarations of constitutional invalidity cannot be suspended. He maintained that the stamp duty waiver served private interests, not public interest, and that the Constitution requires immediate enforcement.
With the stay dismissed, KRA is now free to issue demands and initiate enforcement processes for the KSh 384.5 million stamp duty tied to the merger. NCBA’s appeal will proceed without protection from enforcement.
