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Court of AppealDismissedCivil Appli. Nai 109 of 2007 (UR 71/2007)· [2007] KECA 80 (KLR)

EAST AFRICAN CABLES LIMITED v PUBLIC PROCUREMENT COMPLAINTS, REVIEW AND APPEALS BOARD & another [2007] KECA 80 (KLR)

Court of Appeal of Kenya
31 July 2007
Philip Kiptoo TunoiP.K. TunoiEOE.O. O'KubasuEGE.M. Githinji
2,168 words in judgment
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The bottom line

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Kenya's Court of Appeal refused to pause a Kenya Power cable tender, ruling that financial losses which can be quantified do not justify halting public procurement pending appeal.

What this practically means

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Executive summary

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This ruling of the Court of Appeal (Tunoi, O'Kubasu and Githinji JJA) determines an application by East African Cables Limited under rule 5(2)(b) of the Court of Appeal Rules. The applicant sought a stay of execution of the judgment of Emukule J delivered on 14th May 2007 in High Court Misc. Application No. 372 of 2007, and an order staying further proceedings in the procurement process, including execution and performance of contracts under Tender No. KPL 1/IC/5/3/88/2006, pending an intended appeal. The dispute arose from a Kenya Power & Lighting Company tender for supply of cables and conductors advertised in November 2006, in which the applicant bid for thirty of thirty-two items but succeeded in only one. The applicant failed before the Public Procurement Complaints, Review and Appeals Board, and the High Court dismissed its motion for certiorari, mandamus and prohibition, holding that a declaratory order would not lie in judicial review and that the procurement had been substantially compliant with the law. The Court of Appeal restated the settled twin principles for such applications: the intended appeal must be arguable, and refusal of a stay must not render it nugatory. The court found the intended appeal clearly arguable, the fifteen grounds in the draft memorandum not requiring argument at that stage. On the nugatory limb, however, it weighed Kenya Power's position as sole supplier of electricity, facing unprecedented growth in connections and critical stock shortages, with contracts already executed. It accepted the applicant's business would be seriously affected but held such losses quantifiable and assessable, and, applying utilitarian reasoning, concluded that the orders sought would harm the greatest number of people. The application was dismissed with costs in the intended appeal.

Key legal issues

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01

The principles governing an application for stay of execution or injunction pending appeal under rule 5(2)(b) of the Court of Appeal Rules

Holding

The twin principles are settled and both must be satisfied: arguability of the intended appeal and that refusal of stay would not render the appeal nugatory.

Reasoning

The court restated the settled two-limb test for rule 5(2)(b) applications, citing Reliance Bank Ltd v Norlake Investments Ltd. The applicant sought both a stay of execution of the High Court judgment and a stay of the procurement process. The court applied the test in two stages: it first found the intended appeal arguable, then assessed the nugatory aspect, concluding the application failed on the second limb.

p. 1
02

Whether the intended appeal from the judgment of Emukule J was arguable

Holding

The intended appeal is clearly arguable.

Reasoning

The draft memorandum of appeal containing fifteen grounds was part of the record, and in such applications grounds are not argued; the applicant need only point to arguable grounds. Counsel relied on the learned Judge's alleged error on natural justice and service under Order LIII rule 3(4), and on the failure to apply sections 44(3) and 44(4) of the Public Procurement and Disposal Act, 2005 concerning a summary of the evaluation report. Considering the grounds and rival submissions, the court found the appeal arguable.

p. 3
03

Whether refusal of the stay would render the intended appeal nugatory

Holding

The nugatory test was not satisfied: allowing the application would harm the greatest number of people, and the applicant's losses were quantifiable and assessable.

Reasoning

The court weighed the special position of Kenya Power as the sole licensed distributor of electricity, facing unprecedented growth in connections and critical shortages of cables and conductors, with contracts already executed and re-tendering estimated to take at least six months. Although it accepted the applicant's business would be seriously affected, it held such losses quantifiable and assessable if the appeal succeeded. Invoking the utilitarian doctrine of John Stuart Mill, the court found the balance favoured refusal of the stay.

p. 4

Legal principles established

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  • An applicant under rule 5(2)(b) must satisfy two principles: that the appeal or intended appeal is arguable (not frivolous), and that if stay or injunction is refused the appeal, were it to succeed, would be rendered nugatory.
  • In a rule 5(2)(b) application the grounds of the intended appeal are not argued; the applicant need only identify the grounds it believes are arguable and leave the court to decide arguability.
  • In assessing the nugatory aspect, the court must weigh the public interest and its reciprocal duty not to hamstring statutory bodies, such as a sole utility supplier, from performing their lawful functions.
  • Consequent losses that are quantifiable and assessable do not render an intended appeal nugatory.

Court orders

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  1. 1.The application for stay of execution and stay of further proceedings in the procurement process rejected and dismissed.
  2. 2.The costs of the application to be costs in the intended appeal.

Authorities

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Legislation

  • Court of Appeal RulesRule 5(2)(b)
  • Civil Procedure RulesOrder LIII rule 3
  • Civil Procedure RulesOrder LIII rule 3(4)
  • Law Reform Act (Cap 26, Laws of Kenya)Section 8(1)
  • Exchequer and Audit (Public Procurement) Regulations 2001Regulation 24(2)
  • Exchequer and Audit (Public Procurement) Regulations 2001Regulation 26
  • Exchequer and Audit (Public Procurement) Regulations 2001Regulation 33(1)
  • Public Procurement and Disposal Act, 2005Section 44(3)
  • Public Procurement and Disposal Act, 2005Section 44(4)

Cases cited (3)

  • RELIANCE BANK LTD (IN LIQUIDATION) V NORLAKE INVESTMENTS LTD
    Civil Appl. No. Nai. 93/02 (UR)
  • BUTT VS. RENT RESTRICTION TRIBUNAL
    [1982] KLR 1
  • ORARO & RACHIER ADVOCATES VS. CO-OPERATIVE BANK OF KENYA
    [1999] LLR 118 (CAK)
On appeal from
High Court of Kenya at Nairobi
H.C. Misc. Appln. No. 372 of 2007
Jurisdiction invoked
Rule 5(2)(b) of the Court of Appeal Rules

Key timeline

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Practical implications

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Frequently asked questions

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Cite this brief

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Cite this brief

Caselaw, "EAST AFRICAN CABLES LIMITED v PUBLIC PROCUREMENT COMPLAINTS, REVIEW AND APPEALS BOARD & another [2007] KECA 80 (KLR)", Case Analysis (2007). Civil Appli. Nai 109 of 2007 (UR 71/2007). Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2007/80/eng@2007-07-31

Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.