President William Ruto's cash-strapped government revised the privatization law this year making it easier to sell off state companies.
The government had earmarked 35 firms for privatization and last week put on the block 11 companies including Kenya’s oil and gas company and pipeline operator.
But opposition leader Raila Odinga's party challenged the decision in court, arguing that the sale should be subjected to a referendum due to the strategic significance of the firms.
"I am satisfied that the petition raises substantial constitutional and legal issues of public importance that require critical examination," High Court judge Chacha Mwita ruled late Monday.
Mwita said any planned sales made under the revised law were suspended until February 6 next year, when the case will be heard.
Since Kenya passed a privatization law in 2005, only six state firms have been partly sold, including telecoms operator Safaricom and electricity generator KenGen.
The government's privatization plan also put on the block the country's main convention center in the capital Nairobi — Kenyatta International Conference Centre — an iconic building which also has offices for members of parliament.
Kenya is facing a host of challenges, including revenue shortfalls and a plunging currency that has sent repayment costs soaring on its public debt.
The nation of 53 million people was sitting on a historically high debt of more than $66 billion at the end of June, according to Treasury figures, equivalent to around two-thirds of gross domestic product, GDP.
The cost of servicing the public debt, mainly to China, has soared as Kenya's currency has slumped to record lows with the shilling now trading at around 153 to the dollar.
The East African nation also has a $2-billion Eurobond repayment due next year.
Kenya's Revenue Authority said in October that it missed revenue targets for the June-September quarter by the equivalent of more than $500 million due to depressed economic activity.
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