Okoiti v Portside Freight Terminals Limited & 12 others
The bottom line
#Supreme Court: special procurement methods must still be fair, transparent, and competitive.
What this practically means
#The Supreme Court ruled that even when a government agency uses a special procurement method (like single-sourcing), it must still follow constitutional principles of fairness, transparency, and competition. The court also said that before using such methods, the agency must first pre-qualify potential suppliers through a public process. This case involved a license for a grain facility at Mombasa port.
Executive summary
#Questions the Court framed
#The issues the Court set itself to decide, in its own words.
- 1.Whether this court has jurisdiction to determine the appeal under article 163(4)(a) of the Constitution;
- 2.Whether the appellant had locus standi to institute the action;
- 3.Whether KPA’s Board of Directors usurped the role of the accounting officer in proposing the use of SPPP and the subsequent grant of license wayleave to Portside Freight Terminals Limited;
- 4.Whether KPA’s decision to vary the project sites was ultra vires the Port Master Plan and in violation of articles 10 and 227 of the Constitution; and
- 5.Whether the decision to grant Portside Freight Terminals Limited the license and wayleave to establish a second grain bulk facility through the Specially Permitted Procurement Procedure under section 114A of the PPAD Act violated articles 10, 201 and 227 of the Constitution.
Key legal issues
#Whether the Specially Permitted Procurement Procedure (SPPP) under section 114A of the PPAD Act releases a procuring entity from the constitutional requirements of Article 227(1).
The SPPP does not release a procuring entity from the constitutional requirements of fairness, equity, transparency, competitiveness and cost-effectiveness under Article 227(1). The Court of Appeal erred in holding that the SPPP 'is to give preference by releasing a procuring entity from the requirements and obligations of open competition'.
The Supreme Court held that Article 227(1) of the Constitution is the overarching provision governing all public procurement, regardless of the method adopted. The Court of Appeal had misinterpreted Article 227(2) as creating exceptions that allow the SPPP to bypass competitive principles. The Supreme Court clarified that 'preference' under Article 227(2) refers to affirmative action mechanisms for specific groups (women, youth, persons with disabilities), not to single-sourcing or non-competitive methods. The SPPP, like all alternative methods, must still satisfy the constitutional coordinates of fairness, equity, transparency, competitiveness and cost-effectiveness. The court emphasized that the use of any procurement method, including direct procurement, does not exclude these principles.
Whether a pre-qualification procedure is mandatory before adopting the SPPP as an alternative procurement method.
A pre-qualification procedure under section 93 of the PPAD Act is mandatory before adopting any alternative procurement method, including the SPPP.
The court interpreted section 93(1) of the PPAD Act, which states that an accounting officer 'may conduct a pre-qualification procedure as a basic procedure prior to adopting an alternative procurement method other than open tender.' Despite the use of the word 'may', the court held that in the context of Article 227's requirement for a transparent and competitive system, and reading sections 93 to 95 holistically, the word 'may' is not permissive but mandatory. The section imposes a duty on the accounting officer to conduct pre-qualification to identify the best few qualified firms. The court noted that the requirement to 'publish an invitation notice to candidates to submit applications to be pre-qualified' further supports this mandatory interpretation. KPA's failure to conduct pre-qualification was a significant omission that infringed Articles 10, 201 and 227 of the Constitution.
Whether the appellant had locus standi to institute the action on behalf of the 6th to 11th respondents.
The appellant had locus standi to institute the action in the public interest under Articles 22 and 258 of the Constitution, but could not bring the petition on behalf of the 6th to 11th respondents who were parties to the proceedings and capable of acting in their own names.
The court distinguished between public interest litigation and representative actions. Under Articles 22(2)(c) and 258(2)(c), any person can institute proceedings in the public interest without needing to show personal injury. However, under Article 22(2)(a), a person acting on behalf of another can only do so if that person 'cannot act in their own name.' The 6th to 11th respondents were named parties who elected not to participate, and there was no evidence they could not act in their own names. The court found that the appellant's petition was properly brought in the public interest, as he pleaded violations of Articles 10, 47, 201 and 227 of the Constitution, and the Court of Appeal erred in holding that the petition was not public interest litigation.
Whether KPA's decision to vary the project sites from Dongo Kundu or Lamu Port to Mombasa Port was ultra vires the Port Master Plan and required public participation.
KPA had the power to vary the project sites contained in the Port Master Plan without the necessity of a fresh round of public participation, as the master plan does not have the force of law.
The court held that a master plan or strategic plan is an aspirational document that sets goals and frameworks, but flexibility and adaptability are crucial for long-term planning. While the master plan was developed with public participation, subsequent reviews of aspects that do not substantially change the original objective may be undertaken without fresh public participation. The court emphasized that an institution cannot be subjected to an enforcement action for failing to follow its own self-formulated guidelines. Deviations from the master plan cannot constitute constitutional or legal violations unless they infringe upon statutory obligations or contractual commitments. Article 10(2)(a) of the Constitution was not breached by the variation.
Whether the Court of Appeal erred in holding that the invocation of the SPPP did not violate the Constitution.
The Court of Appeal erred in holding that the invocation of the SPPP did not violate the Constitution. The decision of KPA to grant Portside the license through the SPPP was inconsistent with Articles 10(2)(c), 201(a) and 227(1) of the Constitution.
The Supreme Court conducted a detailed examination of the entire procurement process, including the reports of three KPA committees (Technical Committee, EXCOM, and Strategy and Operations Committee). The committees had raised fundamental concerns: the proposal was unclear whether it was a PPP or SPPP; the technical committee recommended a detailed feasibility study; the Strategy and Operations Committee noted that KPA had failed to evaluate all applications and rank them, and recommended competitive bidding under the PPP Act. The Cabinet Secretary's approval was conditional on review of the tender document, but KPA proceeded without demonstrating compliance. KPA failed to conduct a pre-qualification procedure as required by section 93 of the PPAD Act. The court found that the entire procedure, from conception to approval, violated the constitutional principles of fairness, equity, transparency, competitiveness and cost-effectiveness.
Legal principles established
#- Any procurement method must comply with constitutional requirements of fairness, equity, transparency, competitiveness, and cost-effectiveness.
- Pre-qualification is mandatory before adopting any alternative procurement method, including the Specially Permitted Procurement Procedure.
- Any person with genuine public interest has the right to challenge constitutional violations in court, even without personal injury.
- A public entity's master plan does not have the force of law; deviations from it are not automatically unconstitutional.
- The word 'may' in procurement law can be interpreted as 'must' when read together with constitutional values.
Court orders
#- 1.The Petition dated March 21, 2024 be and is hereby allowed.
- 2.The judgment of the Court of Appeal is hereby set aside in respect of its findings that the trial court erred in holding that the invocation of the Specially Permitted Procurement under section 144A of the Public Procurement and Asset Disposal Act violated the Constitution.
- 3.The decision of KPA to grant Portside Freight Terminals Limited the license to establish a second grain bulk facility through the Specially Permitted Procurement Procedure was inconsistent with articles 10(2)(c), 201(a) and 227(1) of the Constitution
- 4.Each party to bear its own costs.
- 5.We hereby direct that the sum of Kshs. 6,000 deposited as security for costs upon lodging of this appeal, be refunded to the depositor.
The bench
#One judgment of the whole court — no separate or dissenting opinions.
- On appeal from
- Court of Appeal at Mombasa
- Civil Appeal Number E130 of 2023
- Jurisdiction invoked
- Article 163(4)(a) of the Constitution
- Consolidated with
- SC Petition No. E010 of 2024
Relief refused
#Declaration that KPA's Port Master Plan cannot be reviewed and/or amended without conducting public participation
The court held that an institution cannot be subjected to an enforcement action for failing to follow its own self-formulated guidelines and that deviations from the master plan cannot constitute constitutional or legal violations unless they infringe upon statutory obligations or contractual commitments.
Declaration that the appellant could bring the petition on behalf of the 6th to 11th respondents
The court held that under article 22(2)(a) of the Constitution the appellant could not petition the High Court on behalf of the 6th to 11th respondents, who have all along been named in the proceedings as respondents.
Declaration that section 114A of the PPAD Act and regulation 107 of the PPAD Regulations are unconstitutional
The court held that the question of unconstitutionality of section 114A and regulation 107 was not pleaded, canvassed or determined by both the High Court and Court of Appeal and could not be raised for the first time on a second appeal to this court.
Costs
Each party to bear its own costs.
Quotable passages
#Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.
whatever system a procuring entity adopts, the paramount consideration is that it must be fair, equitable, transparent, competitive and cost- effective
the entire procedure, from conception, application, evaluation, submission for approval up to approval of the procurement method violated articles 10(2)(c), 201(a) and 227(1)
a pre-qualification procedure is a 'basic procedure prior to adopting an alternative procurement method,' fortifies this conclusion
an institution cannot be subjected to an enforcement action for failing to follow its own self-formulated guidelines
The judgment of the Court of Appeal is hereby set aside in respect of its findings that the trial court erred in holding that the invocation of the Specially Permitted Procurement under section 144A of the Public Procurement and Asset Disposal Act violated the Constitution.
The decision of KPA to grant Portside Freight Terminals Limited the license to establish a second grain bulk facility through the Specially Permitted Procurement Procedure was inconsistent with articles 10(2)(c), 201(a) and 227(1) of the Constitution
Each party to bear its own costs.
Key timeline
#Practical implications
#Challenge procurement on constitutional grounds
When advising clients challenging public procurement, focus on Article 227(1) requirements even if the procuring entity used a special method. Argue that pre-qualification under section 93 is mandatory before any alternative method. Use public interest standing under Articles 22 and 258 for bona fide challengers.
Ensure pre-qualification before bidding
If you are a supplier seeking government contracts, insist that the procuring entity conducts a pre-qualification process before using any alternative procurement method. Without it, the process may be unconstitutional. Monitor procurement notices for compliance with fairness and transparency requirements.
You can challenge unfair government deals
If you believe a government contract was awarded unfairly, you can go to court in the public interest without showing personal harm. But you must act genuinely, not for personal gain or politics. The court will check if the process was fair, transparent, and competitive, even if a special method was used.
Frequently asked questions
#Can the Kenyan government bypass competition when buying goods or services?+
No. Even when using special procurement methods like single-sourcing, the government must still follow constitutional principles of fairness, transparency, and competition. The Supreme Court confirmed this in Okoiti v Portside Freight Terminals Limited.
What is pre-qualification in Kenyan procurement law?+
Pre-qualification is a mandatory step before using any alternative procurement method. The procuring entity must invite suppliers to apply and select the best few. The Supreme Court ruled that this process ensures fairness and transparency, even if the law says 'may'.
Can I sue the Kenyan government for a bad procurement deal?+
Yes, if you have genuine public interest and are not acting for personal gain or politics. Under Articles 22 and 258 of the Constitution, any person can challenge violations of procurement rules in court. The Supreme Court upheld this right in the Okoiti case.
Does a government master plan have legal force in Kenya?+
No. A master plan or strategic plan does not have the force of law. Deviations from it are not automatically unconstitutional unless they violate a specific law or contract. The Supreme Court clarified this in the Okoiti case regarding the Port Master Plan.
Cite this brief
#Cite this brief
Caselaw, "Okoiti v Portside Freight Terminals Limited & 12 others", Case Analysis (2025). Petition E011 of 2024. Source: https://new.kenyalaw.orghttps://new.kenyalaw.org/akn/ke/judgment/kesc/2025/44/eng@2025-06-30
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.