The Court of Appeal on Friday upheld that refugees based in urban centres must not be compelled to return to camps.
A three-judge bench of the Appeal court said the lower court was right in quashing the government's decision.
The ruling, seen to uphold the right to dignity of such persons, comes after another that overturned an order to close Daadab camp.
Appellate judges Philip Waki, Festus Azangalala and Patrick Kiage dismissed the plea by the state to overturn the High court ruling.
The three judges said the state has gone against international laws that protect refugees as vulnerable groups.
"Having done so is alone sufficient to justify the quashing of the directive," the judges said, citing lack of consultations before the state decision.
The court faulted the state for not engaging in any discernible and meaningful consultation with those directly affected.
The judges said the directive was a classic case of paternalistic unilateralism on the part of the government.
"It was a decision made in a knee-jerk response to grenade attacks not rationally connected to refugees," the bench said.
"It was high-handed, quite oblivious to and uncaring about the ensuing hardships that the affected would be exposed to," they said.
The court pronounced itself strongly in support of the preservation of human dignity, saying the state was wrong in assuming it can take any action it pleases.
The judges said the rounding up of some 18,000 people and holding them at Thika Municipal Stadium was ominous in intent and demeaning in effect.
"These targeted persons were, unless the contrary was proved, innocent. Their only crime appears to be that they fled for their lives," the judges said.
The justices added: "That they should have been targets of rounding up by security agencies and thereafter be herded into a stadium awaiting processing, encampment and then repatriation to their countries or origin struck at the very heart of their dignity and worth,"
The appeal arose out of the judgement of Justice David Majanja delivered on July 29, 2013.
Justice Majanja heard the case and ruled in favor of the urban refugees, saying the state failed to demonstrate how their presence in urban areas led to insecurity.
The case was filed initially at the High court by Kituo Cha Sheria, Abebe Dadi Tullu and six others.
It was necessitated by a government decision, communicated through a press release on December 18, 2012.
The state stopped reception and registration of refugees; and also ordered all registration centres in urban areas closed.
The state had also directed that all asylum seekers will be hosted at the refugee camps.
Asylum seekers from Somalia were asked to report to Dadaab while those from other countries were asked to report to Kakuma refugee camp.
The state had also asked the UNHCR to stop providing direct services to asylum seekers and refugees in urban areas.
The government issued the orders following a spate of attacks in Kenya’s northeastern, Somali regions as well as in the capital Nairobi.
Also read: Refugees must go, Kenya says
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