The High Court has temporarily restrained the National Transport and Safety Authority (NTSA) from impounding imported vehicles that remain unregistered by dealers, following a legal challenge by the Car Importers Association of Kenya (CIAK).
The ruling, delivered by Justice Ngaah Jairus, grants dealers a 60-day grace period to register imported cars after NTSA's initial directive demanded registration by December 16, 2024, under threat of seizure and prosecution.
Background of the Dispute
- CIAK members import used vehicles from countries like Japan and Dubai, clearing them through customs and paying duty before displaying them in showrooms unregistered.
- Registration typically occurs only when a vehicle is sold, a practice longstanding in the industry.
- The association argued immediate registration harms business since unsold cars retain older registration marks, making them less appealing to buyers.
- CIAK also claimed NTSA's directive unfairly targeted used-car dealers compared to new-vehicle franchise dealers who register vehicles after sale.
Court's Findings
- Justice Jairus affirmed that vehicle registration is mandatory under the Traffic Act and cannot be bypassed due to customary practice.
- However, the court found NTSA's abrupt enforcement—with just seven days’ notice including a weekend and public holiday—unfair and unconstitutional.
- The judge noted that despite CIAK’s request for a three-month adjustment period, NTSA failed to respond before enforcing the deadline.
- Consequently, NTSA must issue a new notice allowing at least 60 days for dealers to comply before any enforcement action.
- The court dismissed claims of discrimination, recognizing that used and new vehicle dealers operate under different customs and legal frameworks.
This decision temporarily shields used-car dealers from penalties while ensuring NTSA follows due process in enforcing registration laws.
