The outbreak of coronavirus (COVID-19) has been declared a global pandemic by the World Health  Organization (WHO) and its impacts are being felt in many sectors, including the transport,  manufacturing, sports, tourism and gaming industries. In Kenya, the first case was confirmed on  Friday Morning. Countries have adopted various measures to curb the spread of the virus and these  measures are negatively affecting ongoing business contracts and projects. Governments in the affected countries have been issuing travel restrictions with others issuing directives for complete lock downs.

Against this background, one of the issues that businesses are grappling with is the impact of the COVID-19 (and government directives issued to contain it are) on businesses’ contractual obligations. As  a result of the outbreak, many commercial contracts are likely to NOT be performed and one thing  that will spread as fast as the virus itself is disputes arising from claims of breach. Indeed, some  organizations have already begun invoking the force majeure clauses, which excuse non-performance  in the event a force majeure clause occurs. Yesterday, insurance companies clarified how, due to force  majeure clauses in their standard agreements, their policies do not cover epidemics such as the  coronavirus, obviously due to the massive losses they would be exposed to in the event every one  came calling. In this article, we discuss the legal principles that are often invoked in the event of  epidemics like the present one and share insights that could help business manage legal risks under  their agreements.

What constitutes a Force Majeure event? 

A “force majeure” event by definition, is an event whose occurrence relieves the parties from  performing their contractual obligations when certain circumstances beyond their control arise,  making performance inadvisable, commercially impracticable, illegal, or impossible. These events  may include natural disasters such as floods, earthquakes and other “acts of God,” as well as  uncontrollable events such as war or terrorist attack.

In order to avoid legal claims where parties are hindered from performing their obligations due to a  force majeure event, lawyers often include the force majeure clause in their agreements. Notably, non performance on account of a force majeure event should be invoked only if there is an express  provision included in the particular contract. Courts tend to interpret such clauses narrowly and only  the events listed and those similar to the ones listed will be covered.

In invoking force majeure, courts have held that:

1. a) The event in question must fall within the scope of the force majeure clause in the contract;
2. b) There must be an actual causal link between the non-performance and the claimed force majeure  event; and
3. c) The party seeking to rely on the force majeure clause must show that there are no reasonable steps  that they could have taken to mitigate or avoid the effects of the force majeure event.

Does the COVID -19 outbreak amount to a Force Majeure event? 

To find out whether the outbreak amounts to a force majeure clause, you need to confirm whether a  disease outbreak/pandemic is included in the force majeure clause. Most contracts will include epidemics as a relevant event and thus where it is included as such, a party may be excused from  performance.

Is a party bound to perform where the contract does not provide for a Force Majeure event?  

In the absence of a force majeure clause in the contract, parties whose performance of their contractual  obligations is hindered by the outbreak, may resort to the English legal doctrines of frustration. The  doctrine applies where an event occurs, which renders performance by one party impossible.  Noteworthy, frustration is subject to a very high threshold and rarely results in excuse of performance.  It should be invoked only where you are clear that the outbreak of the virus has rendered your  performance of the obligations impossible, not just difficult.

What should a business do if performance of its obligations is hindered by the outbreak? 

If any of your contracts or projects are exposed to negative effects caused by the coronavirus, you may  consider taking any of the following:

1. a) Identify key provisions in material contracts to confirm whether the outbreak would fall under force majeure that would excuse your performance;
2. b) Identify the applicable requirements related to notification of the event and steps you may need  to take before being excused from performance;
3. c) Consider whether there are alternative means to perform contractual obligations or proactive  steps that can be taken anticipating the potential future effects of the outbreak;
4. d) If the contract has no force majeure clause, consider taking reasonable steps to issue notices of  the frustrating event;
5. e) Understand the local regulatory actions and restrictions to determine whether they require the  company to take steps or make decisions that may affect contractual commitments;
6. f) Analyze the potential consequences of a breach and/or default;
7. g) Contact a lawyer for appropriate legal advice suitable to your circumstances.

Conclusion 

With new cases reported every day, it is highly likely that the effects of the outbreak will play out for  a longer time in the future. Consequently, if you are involved in projects or contracts with parties that  may be affected by the outbreak or your business is itself affected, it is prudent to assess your  contractual exposure and take all necessary actions to ensure that your contractual rights are correctly  and timely invoked. Should you like to discuss any of the issues raised in this alert, feel free to contact  us and our network of lawyers will assist in this respect.

By Hillary Kariuki 

This publication is meant for general information only and does not create an advocate-client relationship between  any reader and Mboya Wangong’u & Waiyaki Advocates. For particular expert advice on any matter dealt with  above, please contact us.

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Types of leases 

1. a) Fixed Base Operator (FBO) Lease 

A Fixed Base Operator (FBO) is an authorized entity, granted rights by the Kenya Airport  Authority (KAA), to operate within the airport premises and provide various aviation services  such as fuel, parking, aircraft rental, and hangar space. An FBO lease agreement is established  between the owner of the airport, whether it is privately owned or managed by KAA, and the  FBO as the lessee. The purpose of this lease is to enable the FBO to commercially operate within  the hangar and deliver their services in a profitable manner. The lease agreement must adhere  to the airport’s rules and regulations.

1. b) Specialized Aviation Service Operations (SASO) Lease 

While an FBO is authorized to offer a wide range of aviation services, a SASO lease agreement  is specifically intended for entities providing specialized services in aviation, such as flight  maintenance. It is important to note that SASO does not include the retail sale of fuel. A SASO  entity can enter into a lease agreement either directly with the airport or as a sub-lessee of an  FBO.

Under a SASO lease agreement, a hangar can be leased for purely commercial purposes,  specifically for in-house aircraft maintenance. The lease agreement can include provisions to  protect other on-airport FBOs and SASOs by ensuring that the hangar is exclusively used for  their own aircraft and not for third-party aircraft.

1. c) Hangar Rental Agreement 

This type of lease agreement offers greater flexibility compared to the previously mentioned  types. It can accommodate various types of hangars, whether for commercial or other purposes.  The hangar rental agreement is applicable to tenants who do not fall within the scope of FBOs  or SASOs.

In a hangar rental agreement, the rental price needs to be specified, taking into account factors  such as the hangar’s size, amenities available for stored aircraft, and its location. It is crucial for

this lease agreement to include a clause that ensures compliance with the airport’s rules and  regulations.

1. d) Subleases 

This is an agreement which allows a tenant to sublet a part of the hangar. The primary lease  should have a clause that gives the airport owner the discretion to allow the tenant to sublet the  hangar in whole or part. The primary tenant should ensure that the secondary tenant complies  with the rules and regulations of the airport and the terms and conditions in the sublease must  be aligned with those in the primary lease .

1. e) Land Lease 

This is where the owner of an airport or land adjacent to an airport leases land to a tenant for a  specific period of time. The tenant then improves the property by erecting hangars or incidental  facilities on the land. The tenant may opt to operate the hangars for their own benefit or to lease  the hangars altogether for profit. However, it should be noted that at the end of the contract  period, the land and project reverts to the entity that originally granted the lease. Notably, the  value of the lease largely depends on the location, duration of lease and user of the land.

Essential features of hangar leases 

1. Description of the premises – The lease agreement should provide a clear and detailed  description of the hangar being leased. It should include specific information that helps  easily identify the hangar, such as its physical characteristics, the land it occupies, and  any additional improvements that are part of the property. It’s also beneficial for  potential buyers to have a site map or an airport layout plan to get a visual  understanding of where the hangar is situated within the airport premises. Having this  visual aid can enhance clarity and make it easier to navigate the location.
2. Use of Premises – The lease should detail the specific purpose of the subject property. It  should state activities that can and cannot be undertaken on the lease property. A  hangar rental agreement would ideally prevent commercial use of the premises. FBO  and SASO leases should provide for the specific commercial activity that is allowable in  the hangar.
3. Lease term – the lease should specify the period within which the lease is in existence.  The term is dependent on various factors, including the size of the lessee’s investment  and the useful life of the improvements on the premises. A lease term that is too short  curtails the investor’s ability to amortize their investment.
4. Rental amount – the lease should be very specific about the amount of rent required to  be paid. It should also stipulate the frequency and method of payment to prevent future

disagreements by the parties. The penalty for failing to remit timely payments should  also be specified.

5. Rights and obligations of parties – the lease should stipulate the rights and obligations of  both the lessor and the lessee in the existence of the lease period.
6. Subletting and assignment– the lease should specify if the lessee is allowed to sublet  hangar space to other tenants. In this regard, it should particularize whether the lessor  needs to give consent so such assignment or subletting.

Conclusion 

Essentially, hangers are leased by owners of the airport. If the airport is privately owned, the  lessor will be bound by contract law and rules of the airport in the lease. However, if the airport  is owned and managed by the Kenya Airports Authority, the Public Procurement and Asset  Disposal Act is applied in a competitive tendering process where approved entities place their  bids. Leases are caused to be drawn by the Authority to secure the interests of the awarded  entity.

~Article by June Njoroge Ngwele, George Ngatiah and Fridah Gatwiri~

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We have set out below a detailed review of major amendments to the various laws:

1. Law of Contract Act (Cap 23) 

The New Act has amended the meaning of the term “sign” in Section 3 to include execution of  Company documents in the manner outlined in the Companies Act 2015. According to the  Companies Act 20151, a company can sign documents as follows:

(a) by the affixing of its common seal and witnessed by a director; or

(b) by two authorised signatories or by a director of the company in the presence of a witness  who attests the signature.

Therefore, all contracts by a company which have to be in writing under this Act, must be  executed as stated or they will not be valid.

2. Industrial Training Act (Cap 237) 

Payment of training levies by employers will now be remitted at the end of the financial year of  a business. Businesses are therefore not required to follow the government’s financial year or the  calendar year.

Further, the payment should be made by the ninth day of the month following the end of the  business’ financial year.

3. Stamp Duty Act (Cap 480) 

Contracts which are considered to be conveyances on sale under Section 49 of the Stamp Duty  Act will be exempt from the fixed duty of one hundred shillings, that was previously charged under the said Section of the Act.

4. National Social Security Fund Act, No. 45 of 2013 

Section 27 has been amended to require employers to pay contribution to NSSF on the ninth day  of the month to harmonize payroll deductions through the Unified Payroll Return.

Previously, they were collected on the first day of the month.

5. Companies Act, No. 17 of 2015 

The definition of a general meeting has been expanded and the same can now be a physical,  virtual or hybrid meeting which are defined as follows:

1 Section 37

(a) Hybrid meeting – where some participants are in the same physical location while other  participants join the meeting through electronic means;

(b) Virtual meeting – where all members join and participate in the meeting through electronic  means.

For hybrid and virtual meetings, the notice of the meeting must specify the means of joining and  participating in the meeting.

Paragraph 11 of Sixth Schedule of the Companies Act has been deleted. This section previously  allowed the use of the official seal of an existing Company that had been obtained prior to the he  repeal of section 37 of the DDC.

6. Insolvency Act, No. 18 of 2015 

The New Act has made the following amendments to the Insolvency Act, among others:

(a) Under Section 643, on obtaining a moratorium, company directors have to prepare a  document setting out the terms of the proposal and a statement of the company’s financial  position containing such particulars of its creditors and of its debts and other liabilities  and of its assets;

(b) Directors are required to set out why a moratorium is desirable to assist in agreeing to an  informal restructuring or other agreement with creditors or entering a formal insolvency  procedure which could lead to the rescue or efficient liquidation of the company.

(c) Additionally, Directors are now required to submit the financial statements to the Monitor  for consideration and comment.

(d) A moratorium ends after thirty (30) days from and including the day on which it takes  effect, unless the moratorium period is extended under Section 669.

(e) During a voluntary arrangement, the Company is now required to appoint a Monitor, not  a provisional supervisor as previously required. The Monitor has to be an insolvency  practitioner who will supervise the voluntary arrangement including giving an opinion  as to whether a moratorium has a reasonable prospect of achieving its aim and if the  company is likely to have sufficient funds available to it during the proposed moratorium  to enable it carry on its business.

7. Small Claim Courts Act, No. 2 of2016 

Section 34 has been amended to provide a sixty-day (60) timeline for adjudication of small claims.

Article by Mary Ndung’u

Disclaimer 

This article is intended for general knowledge only. It does not create an advocate-client relationship  between any reader and Mboya Wangong’u & Waiyaki Advocates. For particular expert advice on any matter dealt with above, please contact us through cgmbugua@lexgroupafrica.com or  mndungu@lexgroupafrica.com.

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It is important to understand that Wills take effect only after the demise of the maker of the will  (“testator”). This is captured in the definition of a Will found in Section 3 of the Law of Succession  Act which states that:

“(A) ‘will’ means the legal declaration by a person of his wishes or intentions regarding the  disposition of his property after his death, duly made and executed”.  

Therefore, even after one has made a Will, they are free to deal with their property as they wish  prior to their death. This means that property included in a Will may be sold or leased for the  benefit of the maker of the Will up until their demise. The maker of a Will is also free to acquire  additional property or change their mind and redistribute their property by changing the  provisions of their Will. This is supported by Section 17 of the Law of Succession Act which  provides that, “A will may be revoked or altered by the maker of it at any time when he is competent to  dispose of his free property by will.”

Any of the above-mentioned changes (transfer of assets, acquisition of property or change of  intended beneficiary) should prompt a Will review.

Changes in Wills are effected through codicils or revocation. A codicil is a “testamentary instrument  made in relation to a will, explaining, altering or adding to its dispositions or appointments”. It can be  described as a document which is supplementary to a will. It does not stand alone as it is attached  to an existing Will which it alters or amends by subtracting or adding to it.

Revocation, on the other hand, refers to the official cancellation of the Will by its maker.

The extent of the changes will determine whether the changes to the Will shall be made by the  preparation of a codicil or revocation of the existing will and making a new one.

The case of re Estate of Ephantus Munyutu Waigi (Deceased) [2014] eKLR is illustrative of how the  courts recognize both revocation and codicils as a means to effect changes to one’s estate plan. In  this matter, the deceased had made a Will on 12th January 2000, another on 24th November 2004  and a codicil signed on 12th July 2007. In his 2004 will, the deceased had expressly revoked all  other wills and testamentary dispositions made by him prior thereto and declared the 2004 will to be his last will. This was upheld by the court and the 2000 will was deemed invalid for the  purposes of succession. The court held that distribution of the estate of the deceased should  accord with the will dated 24th November 2004 and the codicil dated 12th July 2007. In giving its  decision the court reiterated that a “codicil may be described as a document which is supplementary to  a will. It does not stand alone like a will. It is attached to some will. It does not have a life of its own, for  it rides on a back of a will. It serves to revoke, alter, amend, subtracts to form, add to or connect a will…a  codicil never stands alone, but with the will it seeks to supplement or add to, and when admitted to probate,  the codicil becomes part of the will it seeks to supplement or add to.”

While this article mainly deals with intentional changes to a Will, it is worth noting that the  revocation of a Will shall be automatic in the following instances:

1. by the making of another Will;
2. by the burning, tearing or otherwise destroying of the Will with the intention of revoking  it by the testator; or
3. by the marriage of the maker, except where a Will is expressed to be made in  contemplation of marriage.

Thus, Kenyan law anticipates that one’s circumstances may change even after making a Will. One can therefore have a Will in place and ensure that any changes in circumstances are adequately  addressed through periodic reviews. We therefore advice all testators to update their wills  regularly to ensure that it captures any changes in property and intentions and to ensure that the  will remains valid.

Disclaimer 

This article is intended for general knowledge only. It does not create an advocate-client relationship  between any reader and Mboya Wangong’u & Waiyaki Advocates. For particular expert advice on any  matter dealt with above, please contact us through gmboya@lexgroupafrica.com or  imakena@lexgroupafrica.com

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It is in this regard that the Competition Authority of Kenya (“the Authority”) has now developed Draft Joint Venture Guidelines (“draft Guidelines”) which are currently undergoing public  participation. The purpose of the draft Guidelines is to provide clarity on transactions that qualify  as full-function joint ventures, give guidance on notification requirements and give an overview  on the review and analysis of full-function joint venture transactions by the Authority. Notably, the draft Guidelines do not substitute the existing provisions of the Act or the Competition  (General) Rules 2019 (“the Rules”). They only supplement them.

Below is an overview of the draft Guidelines.

1. Types of Joint Ventures 
2. a) Full – Function Joint Ventures 

This is a joint venture that will perform, for a long duration (usually at least 10 years), all the  functions of an autonomous economic entity including: operating on a market and performing  the functions normally carried on by undertakings operating in the same market; having  management dedicated to its day-to-day operations and access to sufficient resources including  finance, staff and assets for its business. Such joint ventures are considered mergers under the  Consolidated Guidelines.

1. b) Greenfield Joint Ventures 

These are joint venture arrangements aimed at engaging in a new business venture separate from  and unilateral from activities of the parties to the joint venture. They usually apply where local  or foreign entities collaborate with other local domiciled entities to develop new products and  services separate from the products and services offered by the parent entities. In some instances,  such arrangements may result in full-function joint ventures depending on the prevailing  circumstances and as such parties are advised to utilize advisory opinions before implementation  of Greenfield Joint Venture transactions.

2. Filing Notifications for Joint Venture Transactions 

Unlike in mergers and acquisitions where the target and the acquirer are easily identifiable, the  target and acquirer in joint venture transactions are not easily identifiable. For this reason, the  Authority will require the parent entities to separately submit documents relating to the  transaction by filing the merger notification forms, in the prescribed form, as joint venture  parents. The joint venture vehicle will also be required to fill the merger notification form as a  joint venture vehicle.

3. Basis for Determination of Assets and Turnover Thresholds 

To determine the impact of the proposed transaction in the market, parties to a joint venture will  be required to provide complete financial information during filing. This requirement also applies for entities who may not be deriving their turnover in Kenya prior to the joint venture.  The parents of the joint venture and their subsidiaries/related companies will also be required to

submit the turnover and asset figures, whether or not attributable to parties in Kenya.  The Authority will also use the financial information of the parent entities and the joint venture  entity to compute merger filing fees.

4. Elements of Joint Ventures and Analysis by the Authority 
5. a) Impact on Competition Analysis 

The competition review of full function joint venture transactions will be guided by the Act, Rules  and the Consolidated Guidelines. In order to determine the anti-competitive effects of a joint  venture, the Authority will consider the terms of the joint venture agreement(s) including: the  activities of the joint venture and its parent undertakings; the governance structure adopted; the  duration of the joint venture; the nature and extent of assets transferred to the joint venture versus  those retained by the participants; and the freedom parents retain to compete with each other and  with the joint venture. Any exclusivity clauses that tend to raise barriers to entry or expansion  facing third parties will also trigger review.

1. b) Public Interest Analysis 

Public interest analysis will be based on the Consolidated Guidelines. In particular, the review of  public interest issues will seek to identify the positive synergies likely to arise from the  transaction. The Authority will also consider the likely technological benefit, real resource  savings, compatibility with competition and economies of scale accompanying the transaction.

5. Guidance on New Trends in the Digital Economy 

In reviewing the impact of joint venture transactions, the Authority may also consider the aspects  of big data and digital economy dynamics of entry and access to data. This will apply to  transactions likely to involve big data even where data is not the main component of the  transaction. Where likely negative competition and public interest impacts of a joint venture  transaction are identified, parties to the joint venture will be required to come up with remedies  to mitigate against the harm.

Conclusion 

In conclusion, the draft Guidelines, if passed, will offer a clear framework to stakeholders in joint  venture transactions on the notification requirements and procedures of the Authority besides  those provided under the Act, Consolidated Guidelines and Rules. They are therefore a welcome  addition to the competition laws of Kenya.

Article by Audrey Seur and Grace Andati

Disclaimer

This article is intended for general knowledge only. It does not create an advocate-client  relationship between any reader and Mboya Wangong’u & Waiyaki Advocates. For particular  expert advice on any matter dealt with above, please contact us through:

cgmbugua@lexgroupafrica.com or aseur@lexgroupafrica.com

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INTRODUCTION 

The Draft Data Protection (General) Regulations, 2021 (“the Draft Regulations”) were recently  published for public consultation by the Communications Authority of Kenya. They elaborate  the rights and duties of the data subjects, data controllers and data processors, and also provide  the procedures for enforcement of the said rights and duties.

Data subjects are individuals whose personal information is collected while data controllers are  the individuals or entities that determine the use and mode of processing the personal  information collected from data subjects. Data processors, on the other hand, are individuals or  entities that process the personal information collected, on behalf of data controllers.

REVIEW OF THE DRAFT REGULATIONS

We highlight the salient provisions of the Draft Regulations below.

1. Enabling the Rights of Data Subjects 

The Draft Regulations require that data subjects are informed by data controllers/processors  through notice of the following:

1. nature and scope of the personal data to be processed;
2. the reasons for the said processing;
3. confirmation on whether the data will be shared with third parties.

Data processors and controllers are also required to ensure that:

1. the data subject has capacity to understand and communicate their consent – consent  cannot be presumed on the basis that the data subject did not object and cannot be  implied where the intention of the data subject is ambiguous or doubtful;
2. the nature of processing is explained in an understandable language to the data subject; c. Data is voluntarily given by the data subject;
3. Data is specific to the data subject.

Further, data subjects have the right to request for data portability, access, restriction and  objection to their data processing as well as deletion/rectification of their personal data held by  data processors or controllers. If any request by a data subject is rejected, data processors are  required to notify them promptly and give sufficient reasons for the refusal.

Data processors are also required to act in the best interests of data subjects despite receiving  consent to use and process their personal data.

2. Restrictions on the Commercial Use of Personal Data 

The Draft Regulations classify the sending of electronic messages, catalogues and display of  adverts on online media sites of data subjects as a form of direct marketing. They, therefore,  require data subjects to be given prior notice of the intended use of their personal data for  commercial purposes. On receipt of the notice, data subjects can object to the use of their  personal data for marketing by third parties. Sensitive personal data and personal data  belonging to minors is excluded from direct marketing by the Draft Regulations.

Additionally, data processors are required to have an op-out system, and to make it simple,  easily understandable and place it in a conspicuous place that is easily visible for use by data  subjects. Direct messages should contain a single sentence notifying data subjects that they can  opt out of future messages by responding to the direct messages by using one word, and the  unsubscribe link in an email should be prominently located. With respect to phone calls, data  subjects should be informed that they can verbally opt-out of future calls.

3. Obligations of Data Processors and Controllers 

The Draft Regulations require data processors to have a personal data retention schedule that  sets out the purpose for retention of data, the retention period and a provision for periodic  audit(s) of personal data. Where a data subject requests for their personal data to be  anonymised or pseudomised, the data processor is under obligation to consider the request.

Where the sharing of personal data by data processors or controllers is on a regular basis, they  should enter into a written agreement with data subjects prior to the sharing. Further, where  data processors are involved in automated data processing (i.e., processing without human  involvement), data subjects should be informed of the same and of their right to object to any  profiling for marketing purposes. The system used for automated processing should be sound,  accurate and non-discriminative.

Additionally, the Draft Regulations provide that any server used for processing personal data  for actualising public goods or services, such as education or elections, must be located in  Kenya. Data processors that do not perform such activity may also be required by the Data  Commissioner to move their servers to Kenya where there is a breach that violates the Data  Protection Act (“Act)) or if they fail to co-operate with the Data Commissioner during an  investigation.

4. Notification of Data Breaches 

The Draft Regulations set out the types of breaches that amount to notifiable breaches,  including instances where a data subject’s identification details that are not publicly available  are unduly revealed, and disclosure of personal credentials such as passwords used to access  electronic or online systems or accounts. Such notification to the Data Commissioner should  include the scope and extent of the breach and steps taken to mitigate the same.

5. Cross-border Data Transfer

The Draft Regulations provide that transfer of data outside Kenya should only be done under  written agreements with data subjects that set out the obligations therein. Moreover, data  processors should ensure that the legal regimes for data protection binding the transferee are at  least the same as under the Act and its attendant Regulations. For this purpose, countries that  have ratified the African Union Convention on Cyber Security and Personal Data Protection, or  have a reciprocal data protection agreement with Kenya or an adequate data protection law are  presumed to have sufficient safeguards.

6. Data Protection Impact Assessment 

Under the Draft Regulations, when data processors engage in activities that constitute high risk  in relation to personal data, they are required to undertake a detailed Data Protection Impact  Assessment as set out in the guidelines. These high-risk activities include automated decision  making with legal or similar significant effects, processing of biometric or genetic data, and  processing of sensitive personal data or data relating to children or vulnerable groups.

CONCLUSION 

From the foregoing, it is apparent that efforts have been made to substantively implement the  provisions of the Data Protection Act. Public participation is ongoing and it is expected that this  will result in changes being introduced in the Draft Regulations.

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In Kenya, The Constitution of Kenya 2010, Article 31 provides that every person has the right to  privacy, which includes the right not to have the privacy of their communications infringed and  information relating to their family or private affairs unnecessarily revealed. The Data Protection  Act No. 24 of 2019 (“the DPA”)gives effect to the above Article 31, together with the  Regulations below:

1. The Data Protection (Registration of Data Controllers and Data Processors) Regulations,  2021 (the “Registration Regulations”);
2. The Data Protection (Complaints Handling Procedure and Enforcement) Regulations,  2021 (the “Complaints Regulations”); and
3. The Data Protection (General) Regulations, 2021 (the “General Regulations”).

The DPA applies to all entities processing the personal data of data subjects residing in Kenya,  regardless of their location.

What is Personal Data? 

The DPA defines personal data as any information relating to an identified or identifiable natural  person. Further, it is any information that may identify a natural person such as a name, an  identification number, location data, an online identifier or to one or more factors specific to the  physical, physiological, genetic, mental, economic, cultural or social or social identity. For  purposes of land transactions, the name of a person, their National ID or Passport Number, their  KRA PIN, their passport photos, their Ardhisasa ID and their address are personal data.

What Responsibilities are placed on persons’ dealings with land transactions? 

Primarily, the DPA introduces Data Controllers and Data Processors, who are persons and/or  entities that deal with information pertaining to land and real estate transactions.

Section 2 of the DPA provides that a Data Controller as a natural or legal person determining the  purpose and means of the processing of personal data while a Data Processor is a natural or legal  person, that processes personal data on behalf of the data controller.

How does this apply to Real Estate? 

Regulation 13 of the Data Protection (General) Regulations, 2021, provides that Data  Controllers and Data Processors must register with the Office of the Data Protection

Commissioner (“the ODPC”). Further, the ODPC has provided a guideline to the effect that  registration is mandatory for Data Controllers and Processors who process personal data for  property management including the selling of land. For this purpose, the following

players involved in a property purchase and/or sale are registrable with the ODPC :

1. Buyer’s Agent (Real Estate Agent)
2. Listing Agent
3. Insurance Company
4. Appraiser
5. Local Authority/County Governments
6. Purchaser
7. Advocates
8. Lands Registry
9. Attorneys/Notary Signing Agent
10. Tax Advisors

The above persons use personal data from various data subjects when dealing with property,  including processing IDs, photos, signatures, location, bank account information etc. and as  Data Controller, when deciding what use to put the said data to, to facilitate the completion of a  purchase, transfer, registration of a lease, legal charge etc. over a property.

Is Property Information Personal Data ? 

Property information is linked to an owner as the details of the said property are not complete  without the description of the owner, for example, their name, ID number and address. Thus, this  data is an ‘identifiable marker’ and is thus considered to be personal regarding the individual.

It is important as a property owner to know that the usage of your personal data in the process  relating to your property is sensitive in nature and the law affords you the: Right to give consent  to the usage of personal data (e.g., the location of your name, property etc. Being disclosed)

1. Right to demand for safety protocols to be put in place to safeguard and protect your data b. Right to be informed how your personal data will be used
2. Right to be informed how long your personal data will be used
3. Right to options to stop and relinquish the processing of personal data
4. Right to be informed if the persons dealing with your property registered with the ODPA  and if compliant with the DPA

What does this mean to me? 

The introduction of the DPA protects individuals including but not limited to property owners. If  you are a person who deals with any personal data relating to a property transaction, you should  register with the ODPC and process data lawfully; minimize the collection of data; impose  restrictions on the processing of data; ensure data quality; establish and maintain security  safeguards to protect personal data and generally comply with the DPA.

Article by June Njoroge & Mary Ndung’u 

Published on 26th January 2023

Disclaimer 

This article is intended for general knowledge only. It does not create an advocate-client  relationship between any reader and Mboya Wangong’u & Waiyaki Advocates. For particular  expert advice on any matter dealt with above, please contact us through

jnjoroge@lexgroupafrica.com or mndungu@lexgroupafrica.com

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Privacy International, a UK-based charity that promotes the right to privacy across the world notes that despite  increasing recognition and awareness of data protection and the right to privacy across, there is still a lack of legal  and institutional frameworks, processes, and infrastructure to support the protection of data and privacy rights.  At the same time, the increasing volume and use of personal data, together with the emergence of technologies  enabling new ways of processing and using it, mean that an effective data protection framework is more  important than ever.

Cognizant of this need, the Kenyan Parliament is considering a bill called the Data Protection Bill which when passed, will regulate how your personal data can be collected, stored, used or processed by another person while observing your right to privacy. You may also be the person on the other side of the scale – the one receiving  other people’s personal information most likely because you need it as part of your due diligence for a  commercial deal, or to enable you provide the services you do to clients or customers. The Bill is relevant to you  too because if passed, it will regulate how you should collect, store, use or process the information.

In this article, we highlight salient features of the Bill, which if when passed, may apply to you.

What Kind of Personal Information is covered? 

– Race, gender, sex, pregnancy, marital status, national, ethnic or social origin, color, age

– Physical/mental health, disability, religion, conscience, belief, culture, language and birth

– Education, medical, criminal or employment history of the person

– Identifying number, symbol assigned to the person

– Fingerprints or blood type

– Contact details

– Correspondence to or from the person that is of a private or confidential nature

– Information given for a grant, award or prize proposed to be made to the person

What Principles Would Apply When Handling the Information and/or Data? 

– Its collection, storage, use or processing must be necessary for a lawful, explicitly defined purpose

– It must be collected directly from and with the consent of the person

– It may only be released to another person and put to a different use with the consent of the person

– Steps must be taken to ensure it is accurate, up-to date, complete and that it is safeguarded against the risk  of loss, damage, destruction, or unauthorized access

– The person has a right to access to the personal information

What Specific Steps are required to be taken by the Data Recipient? 

– Notify the person of the use to which the information will be put to;

– Notify the person that if they waive their rights they will have permitted you to collect it

– Take necessary steps to ensure the integrity of personal data you have or control

– Take steps to correct or delete false or misleading data

– If you reject the person’s request, inform them in writing the reasons for the rejection

– Do not keep data for a longer period than necessary or as provided under any law

– Do not transfer the data outside Kenya unless under specific outlined circumstances.

– No profiling: making a decision based on automated processing of the data which has a legal implication on or significantly affects them without any human intervention. Notably profiling is however legal where  necessary for maintenance of law and order by any public entity.

– Notify the person and the Kenya National Commission on Human Rights and take steps to ensure the  restoration of the integrity of the information system as soon as possible after you discover unauthorized access or processing of the data

Conclusion 

As of January 2018, statistics showed that over 100 countries around the world had enacted comprehensive data  protection legislation, and around 40 countries were in the process of enacting such laws. Kenya is in the latter  category. Once the Bill is passed into law, businesses will need to be aware of what their rights and obligations  will be in order to handle personal data in compliance with the law. That said, the Bill – as is – does point you and  I in the direction that regulation of personal data in Kenya is taking. Are you ready for it?

By Miriam Maina and Pauline Njau

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In this write up, we highlight some salient provisions of the Act.

Application 

The Act applies to data controllers or processors handling data received through all means. Data  controllers are broadly defined to mean persons (whether private or public) who determine the  purpose and means of processing of personal data while data processers are persons who process  personal data on behalf of the data controller. The Act makes it mandatory for any person  intending to act as a data controller or processor to register with the Commissioner upon  furnishing of prescribed information. Notably, this Act applies to both controllers and  processors established or resident in Kenya and who process personal data while in Kenya as  well as to those not established or resident in Kenya, but who process personal data of data  subjects located in Kenya.

Institutional Framework 

The Act establishes the Office of the Data Protection Commissioner to be appointed by PSC,  with the mandate of overseeing the implementation and enforcement of the Act, establishing and  maintaining a register of data controllers and data processors, and exercising oversight on data  processing operations. In addition, the Commissioner empowered to receive and process  complaints on infringement of rights under the Act and to carry out inspections of public and  private entities.

Principles on Data Protection 

The Act sets out principles of data protection, which we discussed in our previous publication.  These principles have been incorporated into laws governing the capital markets,  telecommunication sector, the electoral process as well as employment laws.

Rights of Data Subjects 

Section 26 of the Act sets out various rights that a data subject is entitled to. These include the  right to be informed of the use to which their personal data is to be put, to access their personal  data in custody of data controller or data processor, to object to the processing of all or part of  their personal data, to correction of false or misleading data and to deletion of false or misleading  data about them. The data subjects are also entitled to be notified of the fact that personal data is  being collected, the purpose for which the personal data is being collected, and the third parties  whose personal data has been or will be transferred to.

Collection and Processing of Data 

The Act requires a data controller or processor to collect personal data directly from the data  subject. In exceptional circumstances however, the data may be collected indirectly. These  include where the data is contained in a public record, where the data subject has deliberately  made the data public, the data subject has consented to the collection from another source, the  collection from another source would not prejudice the interests of the data subject, where the  intended collection is for the prevention, detection, investigation, prosecution and punishment of  crime or the collection is for the protection of the interests of the data subject or another person.

Concerns have been raised as to whether these exceptions defeat the purpose of the protections  given under the Act.

A data controller or data processor shall also not process personal data, unless the data subject  consents to the processing or the processing is otherwise permitted under the Act.

Commercial Use of Data 

The Act outlaws the use of data for commercial purposes unless the data subject consents to it or  the use is permitted under law and the data subject has been informed of such use. The Act  further provides that a data controller or data processor that uses personal data for commercial  purposes shall, where possible, anonymize the data in such a manner as to ensure that the data  subject is no longer identifiable. The Cabinet Secretary is required to come up with guidelines  for commercial use of personal data.

Data Breach 

Section 43 of the Act requires that where personal data has been accessed or acquired by an  unauthorized person, and there is a real risk of harm to the data subject whose personal data has  been subjected to the unauthorized access, a data controller shall notify the Commissioner within  72 hours of becoming aware of such breach and communicate to the data subject.

Data Transfer Outside Kenya 

The Act prohibits transfer of personal data to other jurisdictions unless the transferee is subject to  a law or agreement relating to protection of personal data, the data subject consents to the

transfer, or the transfer is necessary for the performance of a contract between the agency and the  transferee, and the transfer is for the benefit of the data subject.

Conclusion 

This Act is important as it is anticipated it will ensure the strengthened protection of personal  data and afford protection of the right to privacy for Kenyans. The putting in place of the  institutional framework to ensure compliance, commitment of financial and skills resources  required, as well as the support from stakeholders such as the judiciary and the industry  regulators will be key to the successful implementation of the Act.

Article by Enock Mulongo

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Kenya operates under the Torrens Registration System which ensures that all titles to land in Kenya  are registered and such records are accurately kept. Therefore, titles issued to individuals are  conclusive evidence of ownership. Hence, official search results generated by the Lands Registry are  expected to be a depiction of the correct ownership of the property.

However, the Supreme Court has affirmed that search results from the Lands Registry do not always  show the correct state of ownership. In the much-contested ownership of land between the Appellant  and the County Government of Mombasa, the court noted that the title is an end product of a process. The Appellant in this case had acquired the disputed property from a seller who had initially acquired  the property from H.E. Daniel Arap Moi. It was urged that the former president acquired the property  by allocation. The Court noted that the allocation process had been irregular and illegal and as such,  he could not have passed a good title. Accordingly, any person who acquired the property from H.E.  Daniel Arap Moi could not have obtained a clean title. On this basis, the court denied the appellant  ownership of the property, noting that it could not find refuge in the doctrine of indefeasibility of title.  Moreso, the court was quick to note that irregularly acquired title cannot be sheltered by the law under  the pretext of the right to property since the right can be limited by law.

If the process preceding the issuance of the title is tainted by fraud and illegality, the title cannot be  protected under the doctrine of indefeasibility of title. This places a heavy burden on the Purchaser  and their advocates in the investigation of title.

Investigation of Title 

Due diligence is a crucial facet of a land transaction. The duty of investigating the title befalls the  Purchaser to ensure that they will acquire a good title, devoid of encumbrances. This enables the  Purchaser to avoid potential contestations of the title. The Supreme Court’s pronouncement has  broadened the scope of due diligence. Initially, the buyer would make an application for official search  at the Lands Registry and the results would suffice as the correct record of ownership.

However, there are several loopholes that may not be revealed by Official Search Results from the  Lands Registry. Such loopholes include erroneous or irregular registration of property as was the case  with the Supreme Court Case at hand. With the new decision, the buyer is obligated to conduct a historical search on the property to ensure that the entire process of acquisition beginning from the initial allocation of the land to the current title has been proper and legal. Failure to conduct such  extensive due diligence exercise could result in the buyer obtaining an unclean title, incapable of being  validly transferred.

The bona fide Purchaser for Value without notice 

A bona fide purchaser is defined in the Black’s Law Dictionary as:

“One who buys something for value without notice of another’s claim to the property and without actual or constructive notice of any defects in or infirmities, claims or equities against the seller’s title; one  who has in good faith paid valuable consideration for property without notice of prior adverse claims.”1 

The doctrine of bona fide purchaser for value without notice protects purchasers who acquire  property in good faith and without knowledge of any other adverse claims. The Supreme Court cited  the case of Samuel Kamere v Lands Registrar Kajiado [2015] eKLR which provided the threshold for  consideration of a bona fide purchaser:

1. The purchaser must have acquired a valid and legal title;
2. The purchaser must have carried the necessary legal due diligence to determine the lawful  owner from whom they acquired a legitimate title; and
3. The Purchaser must have paid valuable consideration for the purchase of the property.

Against this backdrop, the Supreme Court also found that the Appellant could equally not find solace under the doctrine of a bona fide purchaser for value without notice. This is because the Appellant had  not acquired a valid and legal title and it had also not conducted historical due diligence to ascertain  that indeed the property had been validly owned since the first allocation. This finding buttresses the  heightened obligations on the buyer to investigate the title beyond the Official Search results issued  by the lands registry.

Conclusion 

A purchaser must be diligent in investigating the title by exhausting all avenues of information to  ensure that they obtain a valid and legal title that can be defended against any contestation. This  obligation is especially burdensome in the wake of the ongoing digitization process which has  complicated access to historical records. Even though the digitization process aims to correct  anomalies and make it easier for due diligence, we still have a long way to go due to system hitches.  Essentially, the Supreme Court’s decision will affect land transactions and even the use of property as  collateral in the lending sector.

Cited in the Supreme Court Case.

~Article by June Njoroge Ngwele and Fridah Gatwiri~

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