Kenya Ports Authority & another v Rhombus Construction Company Limited & 2 others [2021] KECA 438 (KLR)
The bottom line
#Kenya's Court of Appeal confirmed that public bodies can't cancel tenders over unproven forgery claims without first giving the winning bidder a fair hearing.
What this practically means
#Executive summary
#Key legal issues
#Whether the Review Board had power to extend the tender validity period
Section 88(3) constrains only the accounting officer; the Review Board acting under section 173(a) is not barred from ordering extension
The High Court had analysed section 88 of the PPADA and held it applies only to the accounting officer's powers of extension, once and not beyond 30 days, to guard against abuse. The Review Board's wide powers under section 173 to direct that anything be done or re-done are not limited by section 88(3). The Court of Appeal found no misdirection in that analysis and declined to disturb it.
Whether termination on alleged governance issues (forgery) was procedurally fair
The procuring entity was bound to afford the tenderer fair administrative action before terminating on unverified forgery allegations
The High Court held the procurement decision was flawed not in merit but in process: the interested party was neither furnished with the full information on the forgery allegations nor heard, contrary to Article 47 of the Constitution and section 4(3) of the Fair Administrative Action Act. No concluded investigation results were produced. The Court of Appeal found the Judge had extensively addressed the issues and no basis existed to disturb the findings.
Whether the appellants had locus standi as aggrieved persons
The appellants were not persons aggrieved; their claimed grievance was speculative since the forgery claims were unsubstantiated
Applying James Oyondi, the Court held the appellants had to demonstrate a legal grievance. Their claim that DCI officers would invade their premises over the forgery allegations was speculation, as the claims were not substantiated. The Court noted the appellants had originally awarded the tender to the 1st respondent, so the orders merely affirmed what they themselves had done.
Legal principles established
#- An appellate court will not interfere with a judge's exercise of discretion unless the decision is clearly wrong, based on misdirection, action on wrong matters, or failure to consider relevant matters resulting in a wrong conclusion
- Section 88(3) of the Public Procurement and Asset Disposal Act limits the accounting officer's power to extend tender validity, not the Review Board's remedial powers under section 173
- Where costs do not follow the event, a court must give reasons, however brief, for denying a deserving party costs
Court orders
#- 1.The appeal is dismissed with costs to the 1st respondent
- 2.The cross-appeal is allowed with costs to the cross-appellant/1st respondent
- On appeal from
- High Court at Mombasa, Judicial Review Division
- JR Case No. E002 of 2021
- Jurisdiction invoked
- First appeal / appellate review of a High Court judicial review decision under the Court of Appeal's appellate jurisdiction (Rule 34(2) of the Court of Appeal Rules invoked for deferred reasons)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Kenya Ports Authority & another v Rhombus Construction Company Limited & 2 others [2021] KECA 438 (KLR)", Case Analysis (2021). Civil Appeal No. E011 of 2021. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2021/438/eng@2021-07-09
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.