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Court of AppealPartially AllowedNot stated in judgment text

Public Procurement Administrative Board v Four M Insurance Brokers Limited & 3 others (Civil Appeal E1009 of 2023) [2024] KECA 79 (KLR)

Court of Appeal
9 February 2024
8,981 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~36 min to read original · ~4 min brief

The bottom line

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Kenya's Court of Appeal confirmed that procurement review deadlines run from when a bidder actually learns of the breach, not from the award notification.

What this practically means

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Executive summary

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The Public Procurement Administrative Review Board (PPARB) appealed against a High Court judgment (Chigiti J, 18 December 2023) which quashed its decision nullifying the award and contract for an All Risks Industrial Insurance Policy under Tender No. KPC/PU/OT-298 to the 1st respondent. The High Court had held that PPARB lacked jurisdiction because a contract had already been signed on 2nd October 2023, and that the request for review was out of time. The Court of Appeal allowed the appeal on two core grounds. First, interpreting section 167(1) of the Public Procurement and Asset Disposal Act, 2015, and adopting the discoverability test from Uniplex and SITA, it held that the 14-day limitation period runs from actual or constructive knowledge of the breach; the 2nd respondent's review filed on 12th October 2023, following its discovery of the award on 28th September 2023, was within time. Second, on section 167(4)(c), the Court held that the Board's jurisdiction is ousted only where a contract has been signed in accordance with section 135; the Board must conduct a preliminary inquiry into compliance with section 135 before declining jurisdiction. The Court further found the High Court's merits findings internally contradictory - there was no written contract between the 2nd respondent and the procuring entity, hence nothing to vary or refuse to sign, and no legal basis for the certiorari, prohibition and mandamus orders. The Court set aside the High Court judgment in its entirety, reinstated and upheld the Board's decision of 2nd November 2023, and ordered each party to bear its own costs. Claims that the contract was being performed were rejected as unsubstantiated.

Questions the Court framed

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The issues the Court set itself to decide, in its own words.

  1. 1.Whether the appellant (PPARB) had jurisdiction to hear and determine the request for review application by the 2nd respondent.
  2. 2.Whether the learned Judge erred in granting the orders sought by the 1st respondent in the judicial review application.

Key legal issues

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01

When does time start running for a request for review under section 167(1) of the PPAD Act?

Holding

Time runs from the date of actual or constructive knowledge of the breach, not from the date of notification of award; a narrow construction would leave aggrieved litigants without recourse.

Reasoning

The Court adopted a broad, purposive interpretation of 'date of occurrence of the alleged breach at any stage of the procurement process', drawing on Uniplex (CJEU) and SITA (English Court of Appeal) which adopted a discoverability test. Since the 2nd respondent only became aware of the award to the 1st respondent on 28th September 2023, the request for review filed on 12th October 2023 was within the 14-day period.

p. 10
02

Whether a signed contract automatically ousts the Review Board's jurisdiction under section 167(4)(c).

Holding

No. Jurisdiction is ousted only where the contract is signed in accordance with section 135; the Board must make a preliminary inquiry into whether the statutory preconditions for a valid procurement contract were met before declining jurisdiction.

Reasoning

Section 135 prescribes requirements for creation and signing of procurement contracts. The Board is required to inquire whether a procurement contract has been signed in accordance with section 135 before determining jurisdiction. The High Court adopted a restrictive interpretation and erred in holding that the Board had no jurisdiction solely because a procurement contract had been signed, without checking compliance with section 135.

p. 12
03

Whether the High Court erred in granting judicial review orders based on alleged price adjustment and refusal to contract by the 2nd respondent.

Holding

Yes. The findings were inherently contradictory: having found no written contract existed between the 2nd respondent and the procuring entity, there was nothing to vary or refuse to sign, and no new award could legally be made to the 1st respondent; the orders had no legal or evidential basis.

Reasoning

The Judge's finding of a fundamental illegality in price adjustment presupposed an existing contract, which he had already found did not exist. Section 136 presupposes a written contract has been availed to the successful tenderer before a refusal to sign can trigger forfeiture and re-award. There was thus no legal basis for the orders of certiorari, prohibition and mandamus.

p. 15
04

Whether there is an express legal requirement for cancellation of an award before awarding to the next bidder (section 136).

Holding

There is no express requirement for cancellation of an award, but section 136 does require that the successful tenderer must first refuse to enter into a written contract, which presupposes that a written contract has been availed to them.

Reasoning

The Court agreed with the High Court that the Act does not expressly provide for cancellation of an award, but held that the precondition in section 136 (refusal to enter into a written contract) presupposes the existence and availability of a written contract prepared and signed per sections 134 and 135. Since no written contract was availed to the 2nd respondent, no valid new award could be made to the 1st respondent.

p. 14

Legal principles established

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  • Under section 167(1) of the Public Procurement and Asset Disposal Act, the 14-day period for filing a request for review runs from the date of actual or constructive knowledge of the breach, not merely from notification of award.
  • Section 167(4)(c) ousts the Review Board's jurisdiction over a signed contract only where the contract was signed in accordance with section 135 of the Act; the Board must first inquire into compliance with section 135 before declining jurisdiction.

Court orders

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  1. 1.The judgment and orders of the High Court of Kenya at Nairobi by Justice John Chigiti (SC) dated and delivered on 18th December 2023 in Judicial Review Application Number E.121 of 2023 be and are hereby set aside in their entirety.
  2. 2.The decision of the appellant, delivered and dated at Nairobi on 2nd November 2023 in PPARB Application No.77 of 2023 is accordingly reinstated and upheld.
  3. 3.Each party shall bear its own costs.

The bench

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One judgment of the whole court — no separate or dissenting opinions.

Mohamed Abdulahi Warsame
M. WarsameJA
Currently serving
majority
majority
majority
On appeal from
High Court of Kenya at Nairobi
Judicial Review Application No. E121 of 2023
Jurisdiction invoked
Section 167 of the Public Procurement and Asset Disposal Act, 2015; appeal against High Court judicial review decision under Court of Appeal jurisdiction (Rule 31, Court of Appeal Rules, 2022 applied)

Relief refused

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1st respondent's contention that contract dated 2nd October 2023 is being performed and should not be cancelled

No evidence tendered to prove alleged performance; claims unsubstantiated

p. 15

Costs

Each party shall bear its own costs.

Quotable passages

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Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.

The threshold therefore in determining the date of occurrence of a breach is the date of actual or constructive knowledge of the breach by an applicant.
p. 10Commencement of limitation period for procurement review - discoverability test
its jurisdiction is only ousted once this preliminary inquiry establishes that the provisions on creation of a procurement contract under Section 135 of the Act have been met, or where it makes an error as to the existence of this statutory precondition.
p. 12Scope of jurisdictional ouster under section 167(4)(c)
That the Judgment and Orders of the High Court of Kenya at Nairobi by the Justice John Chigiti (SC) dated and delivered on the 18th day of December 2023 in Judicial Review Application Number E.121 of 2023 be and are hereby set aside in their entirety.
p. 15Final orders - disposition
That the decision of the appellant, delivered and dated at Nairobi on 2nd November 2023 in PPARB Application No.77 of 2023 is accordingly reinstated and upheld.
p. 15Final orders - reinstatement of Review Board decision
Owing to the nature of the appellant and the public nature of procurement processes, we do not find it appropriate to burden any party with costs. As such, each party shall bear its own costs.
p. 15Final orders - costs

Issues in the judgment

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minor

The judgment refers to 'Article 135' where it appears 'Section 135' of the Act is meant

minor

The 1st and 2nd respondents are identified only by role numbers in the judgment text; their actual names are not given in the excerpt provided

minor

Case number of the appeal itself is not stated in the judgment text provided

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (2)

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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, "Public Procurement Administrative Board v Four M Insurance Brokers Limited & 3 others (Civil Appeal E1009 of 2023) [2024] KECA 79 (KLR)", Case Analysis (2024). Not stated in judgment text. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2024/79/eng@2024-02-09

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