The High Court in Nyahururu has suspended enforcement of a government directive requiring large savings and credit cooperatives (Saccos) to replace their general membership voting model with a delegate system.
The court issued the order following an application by Tower Sacco, which sued, arguing the directive unlawfully interferes with its governance, by-laws and members’ right to participate directly in the society’s affairs.
The contested directive issued by the Commissioner for Cooperative Development targets Saccos with more than 5,000 members.
The court also barred the Commissioner from compelling the Sacco to adopt the delegate system until the case is heard.
In its ruling, the court issued the interim orders after finding that Tower Sacco had presented an arguable case challenging the commissioner’s 2025 circular and a compliance reminder issued on April 13, 2026.
The contested directive required the Saccos to replace annual meetings attended and voted in by all members with a delegate system where elected representatives make decisions on behalf of the wider membership.
Part of the Sacco’s argument is that the circular violates constitutional protections, including members’ right to participate directly in managing their cooperative and the society’s autonomy under its registered by-laws.
The application was not opposed by the Commissioner for Cooperative Development or the Cabinet Secretary for Cooperatives and Micro, Small and Medium Enterprises Development.
According to documents issued by several Saccos after the circular, the directive requires cooperative societies with more than 5,000 members to adopt a delegate system, elect between 150 and 500 delegates and amend their by-laws to implement the changes.
Under the general membership model, every Sacco member can attend and vote at the annual general meeting.
Tower Sacco instead placed the proposal before members during a special general meeting on September 27, 2025, and its annual general meeting on January 24, 2026.
The Sacco told the court its members rejected the proposal at both meetings and unanimously resolved to retain the existing general membership governance model.
The case is scheduled for a mention on September 16, for furher directives.
It said the Commissioner later threatened administrative action, including suspension of its registered by-laws after expiry of the compliance period on June 18, 2026.
The court said the Sacco had shown the government intended to compel it to abandon a governance model that had existed for years.
“It would be imperative for parties to be heard so as to determine what is suitable for the membership stated to comprise more than 5,000 in number,” said the judge.
It found the petition was arguable and said the society could suffer irreparable harm if interim protection was denied before the constitutional issues were determined.
The ruling also noted that implementation of the circular could fundamentally change the society’s governance before the court examined its legality.
“This calls for preservation of status quo; therefore, there is need to uphold the constitutional rights of the public involved pending determination of the petition,” the court said.
The court consequently restrained the respondents from compelling the Sacco to abandon the general membership governance model or suspending, revoking, invalidating or otherwise interfering with its registered by-laws pending determination of the petition.
In the main petition, Tower Sacco wants the court to declare the government’s circular unconstitutional, quash it together with the Commissioner’s enforcement letter, and permanently bar authorities from enforcing either against the society.
It also asks the court to affirm its members’ right to govern the Sacco through general meetings and prevent the government from forcing changes to its by-laws or governance structure without members’ approval.