Duke Nyachiro Angwenyi T/A Herzog Enterprises & 1 other v Kenya Revenue Authority & 1 other

KENYA REVENUE AUTHORITY .............................................. 1ST RESPONDENT THE HONOURABLE ATTORNEY GENERAL ........................ 2ND RESPONDENT AS CONSOLIDATED WITH PETITION E216 OF 2023 BETWEEN ALCOHOLIC BEVERAGES ASSOCIATION OF KENYA ................. PETITIONER AND THE COMMISSIONER GENERAL, KENYA REVENUE AUTHORITY .... 1ST RESPONDENT THE HONOURABLE ATTORNEY GENERAL ........................ 2ND RESPONDENT JUDGMENT Introduction 1. This Judgment pertains to a consolidated Constitutional Petition raising profound issues concerning the principles of public finance, procurement, and the accountability of state organs. 2. The central issue in both petitions concerns the decision of the Kenya Revenue Authority (the 1st Respondent) to commence a procurement process for a new Integrated Excisable Goods Management System (hereinafter referred to as EGMS) through an Expression of Interest, notwithstanding that an existing system acquired at considerable public expense is approaching the end of its contractual term and is due to be handed over to the 1st Respondent. 3. The Petitioners, who are taxpayers and business owners directly regulated by the EGMS, contend that the impugned procurement process poses an imminent threat of constitutional violation. They allege that the decision is imprudent, lacks transparency, and contravenes the constitutional values and principles of good governance. Background 4. The 1st Respondent, the Kenya Revenue Authority (KRA), is a statutory body established under the Kenya Revenue Authority Act, Cap 469, and is mandated to assess, collect and account for all government revenue. In fulfilment of this mandate, and pursuant to the Excise Duty Act, 2015, the 1st Respondent administers the Excisable Goods Management System (EGMS), a track-and-trace mechanism intended to curb tax evasion and illicit trade in excisable goods, including alcoholic beverages and tobacco products. 5. On 30th October 2015, the 1st Respondent entered into a contract with SICPA Security Solutions SA for the provision of the EGMS for an initial term of five years. The contract was subsequently varied through two Addenda executed on 4th May 2021 and 23rd December 2022. A salient feature of the First Addendum, as attested by the 1st Respondent’s deponent, Benson Kiruja, is the requirement that specified components of the EGMS be handed over to the 1st Respondent upon expiry of the contract, thereby enabling their continued use, including by other government agencies. https://new.kenyalaw.org/akn/ke/judgment/kehc/2025/18234/eng@2025-11-27 2

page 2 of 9

6. On 11th April 2023, the 1st Respondent issued an Invitation for Expressions of Interest, Reference No. KRA/HQS/EOI-073/2022-2023, seeking a service provider for the “Supply, Delivery, Installation, Commissioning and Maintenance of an Integrated Excisable Goods Management System (EGMS).” It is this procurement process that precipitated the present petitions, the Petitioners contending that the process is fundamentally flawed and unconstitutional. The Petitioners’ Cases 7. In Petition No. E216 of 2023, the Alcoholic Beverages Association of Kenya contends that the existing EGMS has already been fully financed by Kenyan taxpayers through excise stamp fees, and that the initiation of a procurement process for a new system is imprudent, wasteful, and contrary to Articles 201(d) and 227 of the Constitution. The Petitioner further alleges that the Expression of Interest (hereinafter referred to as EOI) process was undertaken without transparency or public participation and that the 1st Respondent’s refusal to disclose the SICPA contract constitutes a violation of the right of access to information under Article 35. 8. In Petition No. E137 of 2023, the Petitioners, Duke Nyachiro Angwenyi and Patricia Kathoni Njeru, assert that the impugned EOI is premature and premised on speculative grounds. They argue that the 1st Respondent has not demonstrated any deficiency in the existing system and that the procurement process is irrational and inconsistent with the constitutional principles of cost-effectiveness and good governance. They further contend that their rights as consumers under Article 46 are imperiled by the increased costs that the introduction of a new system would purportedly occasion. The 1St Respondent’s Case 9. The 1st Respondent, in both petitions, opposes the claims, stating that the impugned EOI is merely exploratory and that no final decision to procure a new system has been reached. It avers that, after eight years of operating the SICPA-supplied EGMS, it has encountered “numerous challenges and multiplicity of threats,” including tax evasion, illicit trade, cybercrime, and risks relating to staff integrity. It contends that the rapid evolution of technology necessitates an assessment of more advanced systems to ensure the continued protection of government revenue. 10. A central tenet of the 1st Respondent’s defence is that the EOI constitutes only a preliminary inquiry. It submits that the exercise is intended to determine whether more advanced solutions exist and to provide the current provider, SICPA, with an opportunity to propose upgrades. It emphasizes that no procurement decision has been made and that such a decision will only be taken after evaluation of the EOI submissions. On this basis, the 1st Respondent characterizes the petitions as premature. 11. The 1st Respondent further asserts that there will be no loss of public funds, as the components of the existing system scheduled for handover will either be utilized by other government agencies or disposed of in accordance with the law. It additionally alleges that the Petitioners are “beneficiaries of the deficiencies in the current system” and oppose the proposed exploration because a more robust system would curtail opportunities for tax evasion. The 2Nd Respondent’s Case 12. The 2nd Respondent, the Honourable Attorney General, filed separate Grounds of Opposition in each petition. Her position is that the Petitions are imprecise and fail to particularize the constitutional violations alleged; that they disclose no cause of action against her; and that no legal or factual basis has been established for attributing liability to her office, given that no specific relief is sought against her. On these grounds, the 2nd Respondent prays that the Petitions be dismissed insofar as they relate to her. https://new.kenyalaw.org/akn/ke/judgment/kehc/2025/18234/eng@2025-11-27 3

page 3 of 9

Analysis And Issues For Determination 13. Having carefully considered the pleadings, affidavits, submissions, and authorities presented by all parties, the Court distils the following issues for determination; i. Whether the Petition discloses a reasonable cause of action against the 2nd Respondent, the Honourable Attorney General. ii. Whether the instant Petition is premature for challenging a procurement process at the Expression of Interest (EOI) stage. iii. Whether the 1st Respondent's initiation of the procurement process for a new Excisable Goods Management System (EGMS) through an Expression of Interest violates the constitutional principles of public finance and procurement under Articles 201 and 227 of the Constitution. iv. Whether the Petitioners' rights under Articles 35 and 46 of the Constitution have been infringed or are threatened. v. What reliefs, if any, should be granted. Whether the Petition discloses a reasonable cause of action against the 2nd Respondent, the Honourable Attorney General. 14. The first issue concerns the propriety of joining the 2nd Respondent, the Honourable Attorney General, to these proceedings. The 2nd Respondent argues, through her Grounds of Opposition, that the Petitions disclose no cause of action against her, fail to attribute any specific act or omission to her office, and seek no substantive relief against her. This requires an examination of the constitutional and statutory role of the Attorney General alongside the factual allegations advanced by the Petitioners. 15. The office of the Attorney General is established under Article 156 of the Constitution. As set out in Article 156(4) and (6), the Attorney General is the principal legal adviser to the Government and the principal representative of the national government in legal proceedings. Courts have repeatedly affirmed that the Attorney General is a proper, and often necessary, party to constitutional litigation involving state action. 16. This principle, illustrated in decisions such as Odinga & another v Independent Electoral and Boundaries Commission & 2 others; Attorney General (Intended Amicus Curiae) [2017] KESC 36 (KLR), arises from the Attorney General’s overarching responsibility to defend the constitutionality of state action. However, this does not render her joinder an automatic formality. It must rest on a discernible legal and factual basis. 17. The test for establishing a cause of action is well settled in Auto Garage & others v Motokov (No.3) [1971] EA 514, where the Court of Appeal stated that a claim discloses a cause of action where it shows that the claimant enjoyed a right, that the right has been violated, and that the defendant is liable. In constitutional litigation, this requires a showing that a Respondent’s conduct has denied, violated, infringed, or threatened a constitutional right. 18. Applying that test, the Petitioners’ pleadings reveal no specific allegation against the Attorney General. The grievances articulated concerning the initiation and justification of the impugned Expression of Interest (EOI)are directed entirely at the 1st Respondent, the Kenya Revenue Authority. The Petitioners meticulously set out the conduct of the 1st Respondent, but do not identify any act, omission, or constitutional duty uniquely attributable to the 2nd Respondent. https://new.kenyalaw.org/akn/ke/judgment/kehc/2025/18234/eng@2025-11-27 4

page 4 of 9

19. The Petitioners’ assertion that the Attorney General has maintained a “studious silence” is insufficient to ground liability. Silence is actionable only where there exists a clear, specific, and mandatory duty to act. The Attorney General’s broad obligation under Article 156(6) to promote and protect the rule of law does not impose a justiciable duty to intervene in every procurement process undertaken by a state organ. To hold otherwise would improperly convert the Attorney General into a general overseer of all governmental operations. 20. Moreover, the Petitioners have not demonstrated how the alleged silence has violated or threatened their rights. They have not shown that they sought the Attorney General’s intervention and were denied it, nor have they cited any statutory provision assigning him supervisory authority over Kenya Revenue Authority’s procurement functions. The Petitioners therefore fail to establish the test of causation requited between the Attorney General’s conduct and the alleged constitutional injury. 21. The principle affirmed by the Supreme Court in Communication Commission of Kenya & 5 others v Royal Media Services Limited & 5 others (2014) eKLR is instructive where the court underscored that the liability of a state officer requires a close connection between the officer’s conduct and the alleged violation. The Court stated: “ (349)… Although Article 22(1) of the Constitution gives every person the right to initiate proceedings claiming that a fundamental right or freedom has been denied, violated or infringed or threatened, a party invoking this Article has to show the rights said to be infringed, as well as the basis of his or her grievance… the necessity of a link between the aggrieved party, the provisions of the Constitution alleged to have been contravened, and the manifestation of contravention or infringement. Such a principle plays a positive role, as a foundation of conviction and good faith, in engaging the constitutional process of dispute settlement…” 22. The Petitioners’ reliance on the Attorney General’s duty under Article 3 fares no better. While the duty to respect, uphold and defend the Constitution binds all persons, its enforcement requires a specific allegation of breach within the scope of the officeholder’s constitutional mandate. Vague assertions that the Attorney General has failed to “safeguard the interests of the taxpayer” fall afoul of the precision requirement articulated in Anarita Karimi Njeru v Republic [1979] KLR 154. 23. Accordingly, the Petitioners have not established any factual or legal basis for liability on the part of the 2nd Respondent. The Attorney General, though a vital constitutional officer and a frequent party in public interest litigation, may only be joined where there exists a clear and specific cause of action against her. Her joinder must be predicated on a clear and specific cause of action. The claims against her are derivative, generalised, and lack the specificity necessary to sustain a constitutional petition. I therefore find that no reasonable cause of action has been disclosed against the 2nd Respondent, and the Petition against her must fail. Whether the instant Petition is premature for challenging a procurement process at the Expression of Interest (EOI) stage. 24. The 1st Respondent contends that the Petition is premature because the impugned Expression of Interest (hereinafter referred to as EOI) is merely exploratory and the final decision to procure a new Excisable Goods Management System (hereinafter referred to as EGMS) is yet to be made. It argues that the Court should refrain from intervening until the procurement process is complete. While facially persuasive, this position is inconsistent with the Constitution and established jurisprudence. https://new.kenyalaw.org/akn/ke/judgment/kehc/2025/18234/eng@2025-11-27 5

page 5 of 9

25. Articles 22 and 23 empower this Court not only to remedy violations that have crystallized but also to prevent threatened violations. The relevant standard of invoking the protective jurisdiction is whether there is a reasonable apprehension of a real and imminent threat of constitutional harm. The Constitution does not require citizens to wait for irreversible damage before seeking judicial protection. 26. The Petitioners’ apprehension is plainly reasonable. The EOI expressly states that “Kenya Revenue Authority is in the process of PROCURING an Integrated Excisable Management System.” The use of the definitive term "procuring" is legally significant. It is not phrased as an invitation for market research or a request for information (RFI), which are genuinely exploratory processes. An EOI, as provided under Part X of the Public Procurement and Asset Disposal Act, 2015, is not an exploratory Request for Information but the first step in a formal, statutory procurement process. Its purpose is to shortlist bidders for a defined good or service. Having issued an EOI for a “new EGMS,” the 1st Respondent has already set the procurement process in motion. To argue otherwise is to engage in a semantic distinction without a practical difference. 27. Requiring the Petitioners to await the completion of the procurement cycle would, in many cases, render judicial oversight an empty ritual. By the time a contract is awarded, the government would have invested significant resources, created legitimate expectations in the winning bidder, and entrenched a fait accompli. Challenging the procurement at that late stage, even if successful, would cause immense disruption and potentially incur liability for the state. Courts have therefore intervened at early stages to prevent threatened constitutional violations, as exemplified in Republic v Independent Electoral and Boundaries Commission (IEBC); Al Ghurair Printing and Publishing LLC & 5 others (Interested Parties); The National Super Alliance (NASA) Kenya (Ex parte Applicant) [2017] KEHC 4663 (KLR). 28. The 1st Respondent’s further argument that the EOI is intended merely to explore potential upgrades by SICPA cannot withstand scrutiny. Its own contract documents provide for system upgrades within the existing framework. Initiating a separate multi-billion-shilling procurement to achieve what could be realised contractually is inconsistent with the principle of cost-effectiveness under Article 227. The Petitioners therefore challenge not a procedural misstep but the rationality of initiating the procurement altogether a challenge properly made at inception. 29. In these circumstances, the EOI represents a concrete step toward a procurement whose necessity is seriously in doubt. The threat of imprudent public expenditure is real and imminent. Judicial intervention is therefore appropriate. 30. I find that the Petitions are not premature. The Court has jurisdiction and, indeed, a constitutional duty to intervene at this stage. Whether the 1st Respondent's initiation of the procurement process for a new EGMS violates the constitutional principles of public finance and procurement under Articles 201 and 227 of the Constitution. 31. This issue goes to the heart of the Petition. The Petitioners argue that initiating a new Excisable Goods Management System (hereinafter referred to as EGMS) procurement violates the principles of prudence, responsibility, transparency and cost-effectiveness under Articles 201 and 227. The 1st Respondent maintains that evolving threats necessitate exploring a more advanced system. Resolving this requires a substantive constitutional analysis of the State’s fiduciary duty in the management of public resources to the taxpayer. https://new.kenyalaw.org/akn/ke/judgment/kehc/2025/18234/eng@2025-11-27 6

page 6 of 9

32. Article 201(d) of the Constitution mandates that the public finance system shall promote a prudent and responsible way of using public money. This is not a mere hortatory statement; it is a binding constitutional command that imposes a stringent standard of fiscal discipline on all state organs. Similarly, Article 227(1) demands that public procurement be conducted in accordance with a system that is fair, equitable, transparent, competitive and cost-effective. The term "cost-effective" is of paramount importance here. It implies an obligation to achieve a desired outcome at the lowest possible cost, or alternatively, to achieve the greatest value from a given expenditure. These provisions must be read conjunctively with the national values and principles of governance in Article 10, particularly; good governance, integrity, transparency, and sustainable development. 33. The undisputed facts reveal that through a cost-recovery model embedded in the excise stamp fees, Kenyan taxpayers and businesses have, over an eight-year period, effectively financed the capital cost of the current EGMS, an amount admitted by the 1st Respondent to be in excess of Kshs.10 billion. The contractual framework, specifically the First Addendum, unequivocally provides for the handover of this system to the 1st Respondent upon the contract's expiry. The logical and economically rational expectation flowing from this arrangement was that the state, now owning the system's core assets, would transition to a lower-cost operational and maintenance phase, thereby realizing the longpromised benefit of reduced stamp fees for consumers. The 1st Respondent's decision to initiate a procurement for a whole new system at this precise juncture shatters this expectation and calls into question the very rationale of the original investment. 34. The 1st Respondent justifies this dramatic shift in policy by citing numerous challenges and multiplicity of threats such as tax evasion, illicit trade, and cybercrime. However, this justification crumbles under evidential scrutiny. The Replying Affidavit of Benson Kiruja is replete with broad, conclusory assertions but is entirely devoid of particularity. It provides no data, no forensic reports, no feasibility studies, and no expert analysis demonstrating that the current system is technologically obsolete or intrinsically incapable of being upgraded to meet these challenges. In the case of Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1948] 1 KB 223, the court established that a decision can be struck down if it is so unreasonable that no reasonable authority could ever have come to it. While this Court is mindful of not substituting its judgment for that of an administrative body, the complete absence of a verifiable evidential foundation for a decision of such colossal financial magnitude pushes it into the realm of Wednesbury unreasonableness. 35. This evidential failure is compounded by the 1st Respondent's own prior contradictory stance. The Petitioners have exhibited the 1st Respondent's submissions to the National Assembly's Public Investment Committee, where it vigorously defended the current system, confirming its effectiveness, its value for money, and the exponential growth in revenue collection it facilitated. A state organ cannot, with constitutional impunity, tell Parliament one thing and this Court another. This inconsistency not only undermines the credibility of its current position but also suggests an arbitrariness that is antithetical to the principles of good governance and transparency under Article 10. The Supreme Court of Kenya in Communications Commission of Kenya & 5 others v Royal Media Services Limited & 5 others (supra) emphasized that state actions must not only be lawful but must also be seen to be rational, fair, and just. 36. The concept of prudence in Article 201(d) must be interpreted through the lens of sustainable development in Article 10(2)(d). Sustainable development encompasses intergenerational equity, requiring the present generation to manage resources responsibly for the benefit of future generations. The proposed procurement, spending billions on a new system while simultaneously taking ownership of a paid-for, functional existing system, is the antithesis of sustainable resource management. It constitutes a grossly inefficient allocation of scarce public funds, imposing an unnecessary and https://new.kenyalaw.org/akn/ke/judgment/kehc/2025/18234/eng@2025-11-27 7

page 7 of 9

burdensome debt on future taxpayers for an asset they do not need. This is not prudence; it is fiscal profligacy. 37. The 1st Respondent's conduct of the procurement process itself violates the transparency and fairness tenets of Article 227. The statutory purpose of an EOI under the Public Procurement and Asset Disposal Act is to shortlist suppliers for a pre-identified good or service. The published EOI notice clearly describes the Integrated Excisable Management System it intends to procure. Yet, in its defence, the 1st Respondent claims the EOI is a tool to "find out whether there was a more advanced" system. This is a fundamental misrepresentation of the process. A procuring entity cannot use a formal EOI, which signals a firm intention to procure, as a disguised market intelligence exercise. This lack of candor and procedural clarity creates uncertainty for potential bidders and the public, and it falls short of the transparent system demanded by the Constitution. 38. In sum, the 1st Respondent has failed to discharge the heavy burden of demonstrating that its decision to initiate this procurement has a rational connection to a legitimate public aim, is based on credible evidence, and represents a cost-effective use of public resources. The initiation of the procurement for a new EGMS, in the absence of a justified need and in direct contradiction to the imminent benefit of owning the existing system, is manifestly imprudent, irresponsible, and wasteful. It therefore constitutes a clear violation of the principles of public finance under Article 201(d) and the obligation for cost-effective procurement under Article 227(1) of the Constitution. Whether the Petitioners' rights under Articles 35 and 46 of the Constitution have been infringed or are threatened. 39. The Petitioners allege violations of Articles 35 and 46. Article 35(1)(b) grants the right to information necessary for the exercise or protection of a right. The South African Constitutional Court's reasoning in Cape Metropolitan Council v Metro Inspection Services Western Cape and others (10/99) [2001] ZASCA 56, which has been persuasive in Kenyan jurisprudence, requires an applicant to state what right they wish to protect and how the information would assist them. In Nairobi Law Monthly Company Ltd v Kenya Electricity Generating Company & 2 Others (2013) eKLR, it was stated that: “ The recognised international standards or principles on freedom of information, which should be included in legislation on freedom of information, include maximum disclosure; that full disclosure of information should be the norm; and restrictions and exceptions to access to information should only apply in very limited circumstances; that anyone, not just citizens, should be able to request and obtain information; that a requester should not have to show any particular interest or reason for their request; that 'information' should include all information held by a public body, and it should be the obligation of the public body to prove that it is legitimate to deny access to information.” 40. The Petitioners, as taxpayers and business owners, have a legitimate and direct interest in understanding the justification for procuring a new EGMS. Access to such information is essential for the protection of their economic interests and for their meaningful participation in matters of public finance, a value expressly recognized under Article 201(a) of the Constitution. The 1st Respondent’s failure to provide a coherent, evidence-based rationale for this substantial policy shift amounts, in substance, to a denial of access to information necessary for the protection of the Petitioners’ rights and interests, thereby infringing Article 35(1)(b). 41. With respect to Article 46, which guarantees consumers goods and services of reasonable quality as well as the information necessary to derive full benefit from them, the Petitioners qualify as consumers within the EGMS regulatory framework. The introduction of a new, costly system likely to perpetuate https://new.kenyalaw.org/akn/ke/judgment/kehc/2025/18234/eng@2025-11-27 8

page 8 of 9

high stamp prices and necessitate fresh capital investments by manufacturers frustrates the cost-saving benefits that were reasonably anticipated upon the State’s acquisition of the existing system. This constitutes a threat to their economic interests as consumers. Nevertheless, the primary and more pronounced violation lies in the breach of the constitutional principles governing public finance and procurement, with the impact on the Petitioners’ individual rights arising as a consequential effect. 42. For the foregoing reasons stated above, this court finds that the Petition against the 2nd Respondent, the Honourable Attorney General, is unmerited and is dismissed. 43. The Petition against the 1st Respondent succeeds. The decision to initiate a procurement process for a new EGMS through the impugned Expression of Interested (EOI) was not supported by a rational or evidence-based justification and violates the constitutional principles of prudence and costeffectiveness in public finance and procurement. 44. The 1st Respondent’s actions created a reasonable apprehension of threatened violations of the Petitioners’ rights as taxpayers and consumers and were tainted from inception by a lack of transparency and evidential foundation. 45. Having carefully considered all the issues arising in this consolidated Petition, the orders that commend themselves to the Court, and which I accordingly grant, are as follows: i. The Petition against the 2nd Respondent, the Honourable Attorney General, is hereby dismissed. ii. A Declaration be and is hereby issued that the 1st Respondent's initiation of the procurement process for a new Integrated Excisable Goods Management System (EGMS) through Expression of Interest Reference No. KRA/HQS/EOI-073/2022-2023, without a rational, evidence-based justification and in light of the imminent handover of the existing system, contravenes the provisions of Articles 201 and 227 of the Constitution of Kenya. iii. An Order of Certiorari is hereby issued, removing into this Court and quashing the 1st Respondent's Expression of Interest (EOI) Reference Number KRA/HQS/ EOI-073/2022-2023 for the Supply, Delivery, Installation, Commissioning and Maintenance of an Integrated Excisable Goods Management System (EGMS). iv. Each party shall bear their own costs. Orders accordingly. File closed accordingly. DATED, SIGNED AND DELIVERED VIRTUALLY THIS 27TH DAY OF NOVEMBER, 2025. BAHATI MWAMUYE MBS JUDGE https://new.kenyalaw.org/akn/ke/judgment/kehc/2025/18234/eng@2025-11-27 9

page 9 of 9