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Court of AppealAllowedCivil Appeal No. 129 of 2013· [2015] KECA 1009 (KLR)

Bluesea Shopping Mall Limited v. The City Council of Nairobi & 3 Others

Court of Appeal
22 May 2015
WKW. KaranjaGKG.B.M. KariukiKMK. M'inoti
7,056 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~28 min to read original · ~4 min brief

The bottom line

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Kenya's Court of Appeal ruled that courts must almost always quash unlawful government tender decisions, even when a contract has already been signed.

What this practically means

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Executive summary

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The appellant, Bluesea Shopping Mall Limited, owner of Plot LR No.36/VII/1037 at Eastleigh, challenged by judicial review the City Council of Nairobi's decision of 18th November 2008 awarding a public private partnership contract to Golden Lime International Limited to redevelop Eastleigh Market. The High Court (Nyamu, J.) found the application meritorious - holding that public private partnerships are subject to the Public Procurement and Disposal Act 2005 and that the Council breached it - but declined certiorari and mandamus on grounds including the appellant's failure to challenge the signed contract, pending ownership litigation, and unpublished PPP guidelines. The Court of Appeal allowed the appeal. It held that the discretion to refuse merited judicial review must be exercised very sparingly because an ultra vires decision must normally be quashed; that a contract founded on a void, unlawful tender cannot claim legitimacy and need not be directly challenged; that allegations of fraud and non-disclosure against the appellant were unsupported by evidence; and that the appellant could not bear the brunt of the Procurement Oversight Advisory Board's failure to publish guidelines. The Court reversed the High Court's refusal and granted the orders of certiorari and mandamus sought. The judgment binds subordinate courts on the sparing exercise of discretion to withhold judicial review relief and on the nullity of contracts founded on unlawful procurement processes.

Key legal issues

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01

Whether refusal of certiorari and mandamus despite a meritorious application was a proper exercise of discretion

Holding

It was not; the factors relied on by the High Court did not justify refusal of the orders and the misdirection resulted in injustice to the appellant.

Reasoning

Administrative law remedies are discretionary but courts are slow to deny them; the discretion to refuse merited judicial review must be exercised very sparingly. Public policy demands that public bodies breaching the law not be encouraged, and an ultra vires decision must normally be quashed. The High Court's factors - the unchallenged contract, pending ownership litigation, unpublished guidelines - did not justify withholding relief.

p. 5
02

Effect of failure to challenge the contract signed after the unlawful tender award

Holding

Immaterial; the contract derived its validity from the tender, and a contract founded on an illegal, void tender cannot stand.

Reasoning

The 1st respondent acted in complete disregard of the PPD Act, rendering both the tender decision and the process null and void. The ensuing contract could not receive legitimacy the tender never had. Since neither the process nor the tender was valid, direct challenge to the contract was unnecessary.

p. 5
03

Whether alleged non-disclosure and fraudulent conduct by the appellant disqualified it from relief

Holding

No; the evidence did not prove fraud or material non-disclosure, and no advantage was obtained by the appellant.

Reasoning

The appellant's proposal was submitted in its own name, not that of the similarly named company; only one director overlapped; incorporation of the similarly named company was not clandestine; and no evidence established fraud. Allegations of deliberate suppression were unsubstantiated and far-fetched.

p. 5
04

Whether absence of published PPP guidelines justified refusing the orders

Holding

No; the guidelines had not been published at the time of the award and could not be applied retrospectively, so the appellant could not bear the brunt of the Board's failure.

Reasoning

The PPD Regulations 2006 came into operation on 1st January 2007 but the detailed guidelines were published only after the hearing. Section 92(3) required prescribed procedure; since none existed, fairness required quashing the tender and contract to return the process to square one and attain the Act's objects of competition and fair treatment.

p. 6
05

Whether pending ownership litigation over the premises justified refusal of judicial review

Holding

No; the court should not postulate facts about who might prevail, and once the tender is quashed the process starts de novo.

Reasoning

Courts decline relief only where the remedy would serve no useful purpose, since courts do not act in vain. No case was made out that the appellant had no valid claim over the property, and it was not for the Court to imagine outcomes of the pending ELC suit. Fairness is the yardstick leading to justice.

p. 6

Legal principles established

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  • The discretion to refuse judicial review relief where the application is merited must be exercised very sparingly; an ultra vires decision should normally be quashed.
  • A contract founded on a void and unlawful tender cannot be more valid than the tender itself and cannot justify refusal of judicial review orders.
  • A party cannot be penalised for the absence of statutory guidelines where the responsible public body failed to publish them; the process must be returned to square one.

Court orders

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  1. 1.Appeal allowed
  2. 2.Orders of certiorari and mandamus sought in the judicial review application granted

Authorities

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Legislation

  • Public Procurement and Disposal ActSection 92
  • Public Procurement and Disposal ActSection 92(3)
  • Public Procurement and Disposal ActSection 83
  • Public Procurement and Disposal RegulationsRegulation 64
  • Public Procurement and Disposal RegulationsRegulation 64(4)
  • Appellate Jurisdiction ActCap 9, Section 3A(1)
  • Constitution of KenyaArticle 159(1)
  • Constitution of KenyaArticle 159(2)(d)
  • Constitution of KenyaArticle 10
  • Rules of this Court (Court of Appeal Rules)Rule 29(1)
  • Rules of this Court (Court of Appeal Rules)Rule 31

Cases cited (8)

  • Shah v. Mbogo
    [1968] EA 93

    Interference with exercise of judicial discretion

  • St. John Shipping Corporation v. Joseph Rank
    [1957] 1 QB 267

    Courts will not enforce a contract prohibited by statute; illegal contracts unenforceable

  • Sanghani Investment Limited v. Officer in charge Nairobi Remand and Allocation Prison
    [2007] 1 EA 354

    Judicial review is discretionary and will only issue if it serves some purpose; most efficacious remedy

  • R. v. Secretary of State for Home Department; ex parte Fayed
    [1998] 1 WLR 763

    Administrative inconvenience cannot justify unfairness

  • R v. Secretary of State for Education & Science, ex parte Parveen Malik
    [1994] ELR 121

    Administrative inconvenience cannot justify unfairness

  • Berkely v. Secretary of State for Environment
    [2001] 2 AC 603

    Discretion not to quash an ultra vires decision is very narrow

  • Bolton Metropolitan Borough Council v Secretary of State for the Environment
    [1990] 61 P & CR 343

    Exceptional for a court to decline to quash an ultra vires decision

  • R. v. Wirral Metropolitan Borough Council, exp Bell
    [1995] 27 HLR 234

    Non-disclosure no ground to dismiss where no advantage obtained and no prejudice

On appeal from
High Court of Kenya at Nairobi
H.C. Misc C.C. No. 808 of 2008
Jurisdiction invoked
Appellate Jurisdiction Act, Cap 9 (Sections 3A and 3(1)); Rules of this Court Rules 29(1) and 31

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (14)

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Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.

Cite this brief

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Cite this brief

Caselaw, "Bluesea Shopping Mall Limited v. The City Council of Nairobi & 3 Others", Case Analysis (2015). Civil Appeal No. 129 of 2013. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2015/1009/eng@2015-05-22

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