In the judgment read by Justice Onyango Otieno, the court stated that the results were marred by grave errors and as such it was not clear who won the March 4, 2013 election.
The court indicated that owing to this, the final results in a number of polling stations were inconsistent.
ODM candidate Edward Akongo Oyugi had moved to the Court of Appeal after the Homa Bay High Court threw out his petition.
The Appeal Court has now ordered the Independent Electoral and Boundaries Commission (IEBC) to hold a by-election.
Obado joins Meru Governor Peter Munya in a list of Governors who have lost their seats through the court process due to election malpractices.
Munya, who ran on the Alliance Party of Kenya ticket, was declared the winner of the March 4, 2013 election after he garnered 184,273 votes. READ Appeal Court nullifies Munya’s win as Meru Governor
His opponent Kilemi Mwiria, on The National Alliance ticket, got 180,837 votes.
Munya challenged the petition saying it lacked merit, but the petitioner’s lawyers successfully argued in the Court of Appeal that the High Court erred when it ordered scrutiny of the results in only seven of the 82 disputed polling stations.
Munya has now taken his case to the Supreme Court and has managed to block the County Speaker from being sworn in as acting Governor.
Last year, Siaya Governor Cornell Rasanga had to undergo a fresh battle at the ballot box after the High Court nullified his election.
He however retained the seat in the by-election.
In the meantime, the appeal in respect of Narok Governor Samuel Ole Tunai has been dismissed.
His opponent Ledama Ole Kina had launched an appeal after the High Court dismissed his claim that IEBC officials had been compromised in favour of Tunai who also influenced the recruitment of the commission’s agents.
The court dismissed the assertion saying no evidence had been presented before it to prove such a claim.