June 28, 2024, marked watershed events for administrative law. Two separate judgements delivered on the same day by the supreme courts of Kenya and the US dealt with major repercussions in how the executive branch of government administers its functions, albeit in very separate ways.

First up is the US Supreme Court, also known as ‘Scotus’. In a 6-3 majority decision, the court overturned a 40-year judicial precedent known as the ‘Chevron Deference’.

The Chevron Deference was promulgated in the case Chevron USA Inc vs. Natural Resources Defence Council Inc in 1984, and it provides that courts should defer to government agencies’ interpretations of the statutes that they administer where there is ambiguity in the meaning of the statute.

The Chevron case set up a two-step process in the interpretation of a statute where the law was silent or ambiguous on a specific issue.

The Chevron deference has been the bedrock of American administrative law for four decades, governing how agencies that deal with issues such as environmental pollution, and food and drug safety undertake their functions.

That all changed in a case decided on June 28, 2024—Loper Bright Enterprises versus Raimondo, Secretary of Commerce —where the Scotus overturned the precedent by requiring courts to exercise their independent judgement in deciding whether a government agency acted within a statutory authority. American courts will no longer be bound by judicial precedent to defer to the executive branch of government where laws passed by Congress are not clear.

The decision effectively shifts more authority to the judiciary away from the executive and Congress.

In Kenya, the Supreme Court also referred to as Scork, issued a decision on the same day that banks and financial institutions were required to seek approval from the Treasury Cabinet secretary before raising interest rates.

The main issue before the court was whether Section 44 of the Banking Act required the approval of the Cabinet Secretary before an increase in interest rates or if it was a contractual matter to be negotiated by the institutions and their customers.

The court found that the discretion to vary interest rates was subject to the regulatory rigours provided for in Section 44 of the Banking Act, that is, the approval of the Treasury Cabinet Secretary.

Both cases illustrate the unique interplay between the three arms of government—executive, legislature, and judiciary—and the people they serve.

The dispute stemmed from several facilities advanced between 1993 and 1997 to a company called Santowels Limited. An audit done by Santowels years after they had closed their account with

Stanbic Bank established that Stanbic had overcharged interest on the facilities they had granted. Both the court of appeal and the High Court found that interest had indeed been overcharged based on the computations.

In one case, the judiciary has asserted its standing as the branch of government that resolves disputes about the interpretation of laws passed by parliament and whether the executive was properly enforcing these laws and on the other case, courts have affirmed a law passed by Parliament giving a ministry the authority to regulate an aspect of contractual dealings.