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High CourtAllowedJudicial Review application; Notice of Motion dated 31st May 2018

Republic v Public Procurement Administrative Review Board & 2 Others ex parte Kenya Power & Lighting Company Limited

High Court of Kenya
26 February 2019
14,226 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~57 min to read original · ~4 min brief

The bottom line

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When a government tender is funded by international donors, the donor's specific rules take precedence over local Kenyan procurement laws.

What this practically means

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Executive summary

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Kenya Power & Lighting Company Limited, the procuring entity, sought judicial review of a decision of the Public Procurement Administrative Review Board dated 4th May 2018 which annulled the award of Tender No. KPI/6A.1/PT/13/16/A58 (Advanced Metering Infrastructure systems) to ZTE Corporation and directed re-advertisement. The applicant argued procedural impropriety, lack of locus standi by the first Interested Party (Shenzhen Star Instrument Co. Ltd), a time-barred Request for Review, and misapplication of the law where the tender was governed by the World Bank Guidelines. Mativo J framed six issues. He held the first Interested Party, a consortium partner holding a power of attorney, had locus standi; the Request for Review filed on 13th April 2018 was within the fourteen days allowed by section 167(1) of the Public Procurement and Asset Disposal Act running from the notification of award; and the ex parte applicant's legitimate expectation claim failed as it was heard. On the pivotal issue, the court held that since the tender was donor funded and all parties agreed the World Bank Guidelines applied, section 6(1) of the Act required the Guidelines to prevail; the Board's finding that there was no valid extension of the tender validity period was an error of law unsupported by the material before it, and the seven extensions were valid. The court found no unreasonableness or irrationality in the Board's decision apart from this error of law, and reiterated that an interested party cannot raise new issues never raised before the Review Board. The Notice of Motion dated 31st May 2018 was allowed on the error-of-law ground only: certiorari quashed the Board's decision, prohibition restrained its implementation, and a declaration issued that the advertisement, evaluation and award conformed with the procurement laws. No orders as to costs were made.

Key legal issues

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01

Locus standi of the first Interested Party to file the Request for Review

Holding

The first Interested Party, as a partner in the consortium and holder of a power of attorney to conduct business on behalf of the consortium, was a 'candidate' under section 2 of the Act and had locus standi.

Reasoning

The court examined section 167(1) and the definition of 'candidate' in section 2 of the Act. It found it undisputed that the first Interested Party signed a consortium agreement with Huawei Technologies Co. Ltd and was granted a power of attorney to conduct business relating to the tender, which included filing a Request for Review. The applicant's contrary argument was held legally flawed.

p. 7
02

Whether the Request for Review was filed out of time

Holding

The Request for Review was filed within the fourteen days allowed by section 167(1), running from the notification of award dated 3rd April 2018.

Reasoning

The court held that time runs from notification of award or the date of the alleged breach. The notification of the unsuccessful bid was communicated on 3rd April 2018 and the Request for Review was lodged on 13th April 2018, within fourteen days. The applicant's computation from the earlier alleged breaches was rejected.

p. 8
03

Whether the tender validity period was illegally extended

Holding

The extensions were valid because the tender was donor funded and governed by the World Bank Guidelines, which prevail over the Act by virtue of section 6(1); the Review Board erred in law in finding no valid extension.

Reasoning

All parties agreed the tender was donor funded and governed by the World Bank Guidelines. The bid documents were on record before the Board, so its finding that no evidence supported the World Bank Guidelines argument was unsupported by the material. Section 6(1) of the Act provides that treaty or agreement terms prevail in case of conflict, so the seven extensions conformed with clause 2.57 of the Guidelines. This ground alone justified quashing the decision.

p. 9
04

Whether the right to legitimate expectation was violated

Holding

The ex parte applicant's legitimate expectation claim failed because it participated in the proceedings and was heard; the second Interested Party's claim could not be entertained as it raised new issues.

Reasoning

Applying the two-step legitimate expectation test and the requirements from National Director of Public Prosecutions v Philips, the court found the alleged expectation was not clear, unambiguous and devoid of qualification, since the applicant was afforded an opportunity to be heard and argued its case. The second Interested Party's complaint of being condemned unheard was a new issue it could not raise as an interested party.

p. 11
05

Whether an interested party may raise new issues

Holding

An interested party cannot raise new issues never raised before the Review Board, as this would prejudice the principal parties.

Reasoning

Relying on the court's own earlier decision in the BRITAM Life Assurance case and the Supreme Court's decision in Muruatetu, the court reiterated that the issues for determination are those presented by the principal parties; an interested party may only assist the court or make submissions, not frame fresh issues.

p. 12
06

Whether the decision was unreasonable or irrational

Holding

The applicant failed to demonstrate unreasonableness or irrationality; the court's role is strictly supervisory and it will not interfere with a decision within the range of permissible outcomes.

Reasoning

Applying the Wednesbury/rationality tests and section 7(2) of the Fair Administrative Action Act, the court found nothing to show that a reasonable body faced with the same facts and law would have reached a different conclusion. Judicial review is concerned with the manner of decision-making, not the merits, and the court must be slow to substitute its own view.

p. 13

Legal principles established

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  • Where a donor-funded tender is expressly governed by donor financing terms, section 6(1) of the Public Procurement and Asset Disposal Act provides that the terms of the treaty or agreement prevail over the Act in the event of conflict.
  • A partner in a consortium who has been granted a power of attorney to conduct business on behalf of the consortium, including filing a Request for Review, has locus standi under section 167(1) of the Act.
  • An interested party is not a principal party and may not introduce new issues not raised before the decision-maker.

Court orders

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  1. 1.An order of Certiorari quashing the Respondent's decision dated 4th May 2018 (Public Procurement Administrative Review Board application No. 48 of 2018)
  2. 2.An order of Prohibition restraining the Respondent from implementing the Respondent's decision dated 4th May 2018
  3. 3.A declaration that the advertisement, evaluation and award of Tender No. KPI/6A.1/PT/13/16/A58 was done in conformity with the procurement laws, regulations and laid down procedures
  4. 4.No orders as to costs
Jurisdiction invoked
High Court judicial review jurisdiction; Article 47 of the Constitution read with section 7(2) of the Fair Administrative Action Act, Act No. 4 of 2015

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, "Republic v Public Procurement Administrative Review Board & 2 Others ex parte Kenya Power & Lighting Company Limited", Case Analysis (2019). Judicial Review application; Notice of Motion dated 31st May 2018. Source: 

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