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Court of AppealPartially AllowedCourt of Appeal Civil Appeal (Nairobi)· [2018] KECA 616 (KLR)

Energy Regulatory Commission v SGS Kenya Ltd & 2 others (Civil Appeal 341 of 2017) [2018] KECA 616 (KLR)

Court of Appeal of Kenya
11 May 2018
4,993 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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Kenya's Court of Appeal confirmed that courts reviewing procurement decisions cannot re-weigh evidence or force agencies to award tenders to losing bidders.

What this practically means

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Executive summary

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The Energy Regulatory Commission floated a 2017 tender for marking and monitoring of petroleum products to curb fuel adulteration. Its evaluation committee recommended award to SGS Kenya Limited, but in light of general observations on emerging detection technology (for Jet A1 adulterant detection and real-time transmission of test results), the Acting Director General approved termination of the tender under section 63(1)(a) of the Public Procurement and Disposal Act 2015 to allow re-tendering incorporating the new technology. The Public Procurement Administrative Review Board disallowed SGS's request for review, but Mativo J in the High Court quashed the Board's decision, prohibited the new tender, and issued mandamus directing the appellant to award the contract to SGS. The Court of Appeal allowed the Commission's appeal. It held that the learned Judge erred by making value judgments on the sufficiency and weight of the evidence of technological change, thereby straying from the process-focused province of judicial review into the merits, contrary to the Wednesbury standard, which requires 'something overwhelming' before a court may intervene. The Board's reasoning, grounded in the technical qualifications of the evaluation committee and the wider public interest in curbing adulteration, was rational, and the specialized Board's decisions should not be lightly interfered with. Mandamus was also misconceived because the Commission had no statutory duty to award the tender; award lay within the accounting officer's discretion, and the committee's recommendation was not binding. The Court set aside the High Court orders in their entirety, dismissed SGS's substantive motion, and awarded the appellant costs in both courts.

Key legal issues

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01

Limits of judicial review: process versus merits

Holding

The learned Judge erred by making value judgments on the sufficiency, weight and quality of the evidence of technological change; that is the province of an appeal, not judicial review.

Reasoning

The Judge's language about evidence being 'clear', 'cogent', 'substantial', 'real' and 'tangible' showed he was weighing the evidence as on appeal. Following the long line of authority including OJSC Power Machines and Chief Constable v Evans, the Court held that the true province of judicial review is procedural impropriety, and that a public body has jurisdiction to err on the merits without attracting certiorari. Only a complete absence of evidence amounting to Wednesbury irrationality would justify interference.

p. 6
02

Wednesbury unreasonableness as the threshold for quashing a procuring entity's termination of a tender

Holding

The Board's decision upholding the termination under section 63(1)(a) for substantial technological change was rational and far from Wednesbury unreasonable.

Reasoning

The Board made a categorical finding that the termination was based on the evaluation committee's general observations by technically qualified members, and considered the wider public interest advantages of the new technology, including curbing fuel adulteration. The Judge hoisted his own sense of reasonableness above that of the Board. Following Wednesbury, only 'something overwhelming' justifies intervention, and that threshold was not met.

p. 8
03

Availability of mandamus to compel award of a tender

Holding

Mandamus was wholly misconceived because award of tenders is discretionary and the evaluation committee's recommendation was not binding on the accounting officer.

Reasoning

Mandamus against public bodies is limited to performance of a clear and unqualified statutory duty. Since the statute and tender documents recognised termination, and the accounting officer retained discretion to accept or reject the committee's recommendation, the order directing award to SGS usurped powers belonging to other entities and denied the accounting officer a statutory discretion.

p. 8
04

Deference to specialized tribunals

Holding

The Review Board, being a specialized statutory tribunal better equipped than the High Court for procurement disputes, should be shown deference.

Reasoning

The Board has wide powers under section 98 of the Act, may engage experts under Reg. 89, and the administrative review it conducts is in nature an appeal. Kenya Pipeline v Hyosung Ebara establishes that its decisions within jurisdiction should not be lightly interfered with; the Judge ought to have been more circumspect.

p. 8

Legal principles established

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  • Judicial review is concerned with the process, not the merits, of an administrative decision; a court in judicial review must not weigh the sufficiency of evidence supporting the decision
  • Insufficiency of evidence before a public body is not a ground for judicial review remedies; only a decision so unreasonable that no reasonable authority could reach it (Wednesbury unreasonableness) will be quashed
  • Mandamus cannot issue to compel a discretionary statutory act in a specific way; it lies only for performance of a clear and unqualified public duty
  • A tender evaluation committee's recommendation does not divest the accounting officer of discretion to accept or reject it; a court cannot command the award of a tender
  • The decision of the specialized Public Procurement Administrative Review Board, being akin to an appeal, should not be lightly interfered with by the High Court

Court orders

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  1. 1.The appeal is allowed with costs
  2. 2.The orders of the learned Judge (certiorari, prohibition and mandamus) are set aside in entirety
  3. 3.Substituted therefor is an order dismissing SGS's substantive motion with costs
  4. 4.The appellant shall have the costs of this appeal

Authorities

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Legislation

  • Energy Actestablishment of the Energy Regulatory Commission
  • Public Procurement and Disposal Actsection 46
  • Public Procurement and Disposal Actsection 63(1)(a)
  • Public Procurement and Disposal Actsection 63(4)
  • Public Procurement and Disposal Actsection 98
  • Public Procurement and Disposal Actsection 139
  • Public Procurement and Disposal Act RegulationsRegulation 89
  • Constitution of KenyaArticle 227

Cases cited (14)

  • Mbogo vs. Shah
    [1968] EA 93
  • Chief Constable vs. Evans
    [1982] 3 ALL ER 141
  • OJSC Power Machines Limited, Transcentrury Limited & Civicon Limited (consortium) Vs. Public Procurement Administrative Review Board & 2 Others
    [2017] eKLR
  • Republic v Kenya Revenue Authority ex parte Yaya Towers Limited
    (2008) Misc. Civil Appl. No. 374 of 2006
  • Biren Amritlal Shah & Anor v Republic & 3 Others
    [2013] eKLR
  • East African Railways Corp. v Anthony Sefu Far-Es-Salaam
    (1973) EA 327
  • Associated Provincial Picture Houses Ltd vs. Wednesbury Corporation
    [1948] 1 KB 223
  • Short v. Poole Corporation
    [1926] Ch 66
  • Avante International INC vs. IEBC
    Pboard Review No. 19 of 2017
  • Kenya Pipeline Ltd Vs. Hyosung Ebara Company LTD
    [2012] eKLR
  • Wanyoike vs. Medical Practictioners and Dentists Board & anor
    [2017] eKLR
  • R vs. Kenya Revenue Authority Ex Parte Yaya Towers Limited
    [2008] eKLR
  • Makupa Transit Shade Limited & Anor vs. Kenya Ports Authority & Anor
    [2015] eKLR
  • Manyasi v. Gicheru & 3 Others
    [2009] KLR 687
On appeal from
High Court of Kenya
Judicial Review Application (substantive motion filed 16th August 2017), judgment in SGS Kenya Limited vs. Energy Regulatory Commission
Jurisdiction invoked
Appellate jurisdiction over the High Court's judicial review judgment (Supreme Court Act/Court of Appeal appellate jurisdiction; the judgment does not state a specific constitutional provision)

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (8)

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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, "Energy Regulatory Commission v SGS Kenya Ltd & 2 others (Civil Appeal 341 of 2017) [2018] KECA 616 (KLR)", Case Analysis (2018). Court of Appeal Civil Appeal (Nairobi). Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2018/616/eng@2018-05-11

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