High Court at Nairobi (Milimani Law Courts)
Law Society of Kenya v National Assembly & 2 others; Association of Professional Societies In East Africa & another (Interested Parties)
Law Society of Kenya v National Assembly & 2 others; Association of Professional Societies In East Africa & another (Interested Parties) (Petition 215 of 2020)  KEHC 10070 (KLR) (Constitutional and Human Rights) (21 July 2022) (Judgment)
The requirement for professional associations to seek exemption from the Competition Authority did not violate the freedom of association of professional associations.
The petitioners contended that section 29 of the Competition Act as enacted by the Competition (Amendment) Act, 2019 violated their fundamental rights and freedoms under articles 10(2), 24, 36, 46, 118, and 124(1) of the Constitution of Kenya, 2010 (the Constitution) because according to the parties the amendment sought to restrict professional associations right to freely, independently and effectively carry out their mandate in accordance with their enabling statutes. The respondents opposed the petition on grounds that the impugned provision specifically dealt with the parties professional rules that had a restriction prohibited by the Competition Act.
- Whether section 29 of the Competition Act, which required professional associations whose rules had the effect of preventing competition in the market, to apply to the Competition Authority for an exemption in the application of those rules, violated the freedom of association of professional associations.
- Whether the amendment to section 29 of the Competition Act to include section 29(8) that required professional associations whose rules had the effect of preventing competition in the market, to apply to the Competition Authority for an exemption in the application of those rules, was unconstitutional for lack of public participation.
Relevant provisions of the law
Competition Act, Act No 12 of 2010
Section 29 - Exemption in respect of professional rules
(1) A professional association whose rules contain a restriction that has the effect of preventing, distorting or lessening competition in a market shall apply in writing or in the prescribed manner to the Authority for an exemption in terms of subsection (2).
(2) The Authority may exempt all or part of the rules of a professional association from the provisions of Section A of this Part for a specified period if, having regard to internationally applied norms, any restriction contained in those rules that has the effect of preventing or substantially lessening competition in a market is reasonably required to maintain
(a) professional standards; or
(b) the ordinary function of the profession.
(3) Upon receiving an application in terms of subsection (1), the Authority shall
(a) publish a notice of the application in the Gazette;
(b) allow interested parties thirty days from the date of that notice to make representations concerning the application; and
(c) consult the Government agency or Ministry responsible for the administration of any law governing the profession concerning the application.
(4) After considering the application and any submission or other information received in relation to the application, the Authority shall
(a) either grant an exemption or reject the application by issuing a notice in writing to the applicant;
(b) give written reasons for its decision if it rejects the application; and
(c) publish a notice of that decision in the Gazette.
(5) If the Authority considers that any rules, either wholly or any part thereof, should no longer be exempt under this section, the Authority may revoke the exemption in respect of such rules or the relevant part of the rules, at any time after it has
(a) given notice in the Gazette of the proposed revocation;
(b) allowed interested parties thirty days from the date of that notice to make representations concerning the exemption; and
(c) consulted the responsible Minister referred to in subsection (3)(c).
(6) The exemption of a rule or the revocation of an exemption shall take effect from such date as may be specified by the Authority.
(7) For the purposes of this section, professional association means the controlling body established or registered under any law in respect of recognized professions, but does not include trade associations and industry lobby institutions or bodies whether incorporated or not.
(8) Any professional association
(a) whose rules contain a restriction that has the effect of preventing, distorting or lessening competition in a market in Kenya and which fails to apply for an exemption as required by sub-section (1) and (2); or
(b) which having applied for exemption under sub-section (1) fails to comply with the Authority's decision rejecting its application, commits an offence, and any official thereof or any person who issues guidelines or rules in contravention of that provision shall be liable, upon conviction, to imprisonment for a term not exceeding five years or to a fine not exceeding ten million shillings, or both.
- In interpreting a statute, courts presumed that Acts of Parliament were enacted in conformity with the Constitution. A court was required to examine the purpose and effect of the impugned statute.
- The purpose of the Competition Act was to protect consumers from unfair and misleading market conduct. It was one of the fundamental rights and freedoms envisaged under article 46 of the Constitution. The Competition Act was enacted to ensure the right was upheld to give effect to article 46.
- The Competition Act provided a broad framework within which consumers could be protected. Part III of the Act prohibited restrictive trade practices. Under section 21(1) of the Act, restrictive trade practices were agreements between undertakings, decisions by associations of undertakings, decisions by undertakings, or concerted practices by undertakings that had as their object or effect the prevention, distortion, or lessening of competition in trade in any goods or services in Kenya.
- Section 29 of the Competition Act purposefully intended that restrictive trade practices be regulated within the context of professional associations such as the petitioner and the interested parties. The Act in no way dictated or determined how the associations were to carry out their mandate or business in light of their enabling legislation. The Act expressly spoke to restrictive trade practices that it wished to regulate in the context of consumer protection in view of professional associations.
- The High Court was enjoined to interpret the Constitution in a manner that promoted its purpose and principles, advanced the rule of law and human rights and fundamental freedoms in the Bill of Rights and permitted the development of the law and contributed to good governance.
- Section 29 of the Competition Act did not usurp the mandate of the petitioner and the interested parties. The restriction had been in operation since 2011 save for the penalty clause that was introduced by the amendment. The petitioner and interested parties failed to demonstrate how the impugned provision violated their rights.
- There was nothing to show that the amendment of section 29 of the Competition Act curtailed the parties right of association or inhibited the members of the public from accessing quality services from the professional associations. Section 29(8) of the Competition Act was constitutional.