Republic v Public Procurement Administrative Review Board & 2 others Ex Parte - Sanitam Services (E.A) Limited [2013] KEHC 684 (KLR)

REPUBLIC OF KENYA

IN THE HIGH COURT OF KENYA AT NAIROBI

MILIMANI LAW COURTS (JUDICIAL REVIEW DIVISION)

MISC. APPL. NO 204 OF 2013

REPUBLIC ………………………………………….......................…………APPLICANT

VERSUS

PUBLIC PROCUREMENT ADMINISTRATIVE REVIEW BOARD ..1^ST RESPONDENT

AND

KENYATTA UNIVERSITY ………….......................……...…...1^ST INTERESTED PARTY

PINPOINT HUGIENCE SERVICES …........................…..…2^ND INTERESTED PARTY

EX PARTE - SANITAM SERVICES (E.A) LIMITED

JUDGMENT

Introduction

1. The matter before me arises out of the decision of the Public Procurement Administrative Review Board made on 4^th June 2013. The decision pertained to a request for review of the award of Tender No KU/TNDR/43/PSDBS/2013-2014 for Provision of Sanitary Disposal Bins Services to the 2^nd Interested Party by the 1^st Interested Party on 9^th May 2013.  After hearing the parties to the application for review, the respondent rendered its decision dismissing the application for review and directing the 1^st Interested Party to proceed with the tendering process.

2. The applicant was dissatisfied with the decision of the respondent and therefore filed an application brought by way of Notice of Motion dated 17^th June 2013 pursuant to leave granted in this matter on 14^th June 2013 seeking the following orders:

1. That orders of certiorari seeking to quash the decision of the PUBLIC PROCUREMENT ADMINISTRATIVE REVIEW BOARD of 4^th June 2013 regarding the Applicant’s tender for supply of sanitary disposal bins services made to the 1^st Interested Party. (sic).

2. That orders of mandamus against the PUBLIC PROCUREMENT ADMINISTRATIVE REVIEW BOARD directing and ordering the said Board to uphold and award the Applicants tender for sanitary disposal bins services made to the 1^st interested party as only full responsive tender. (sic).

3. That the costs of this application be provided for.

The Applicant’s Case

3. The applicant’s case is set out in the application, the statutory statement dated 13^th June 2013 and the affidavit in support sworn by Mr. Samson Kamau Nganga on 17^th June 2013, his supplementary affidavit and written submissions dated 2^nd July 2013.

4. In his affidavit in support of the Notice of Motion sworn on 17^th June 2013, Mr. Samson Kamau Nganga, a director of the applicant company, depones that the applicant is a sanitary disposal services provider and the proprietor of Patent No AP773 in regard to sanitary bin authenticated by a patent certificate.

5. He depones further that the applicant tendered for the services advertised by the 1^st Interested Party in which it was one of four tenderers, including the 2^nd Interested Party, which was awarded the tender on 24^th April 2013 by the 1^St Interested Party’s tender committee. Dissatisfied with the decision of the 1^st Interested Party, the applicant applied to the respondent for review of the tender award, and the respondent rendered its decision on 4^th June 2013.

6. Mr. Kamau deposes that the applicant was dissatisfied with the decision of the respondent. He avers that the respondent acted without jurisdiction or in excess of jurisdiction by failing to uphold the provisions of Regulation 47(1)(f) of the Public Procurement and Disposal Act, 2005 (hereafter “the Act”) in  that it found that only certain items were set for mandatory compliance while others appearing under General Requirements and Technical Requirements were not mandatory.

7. Mr. Kamau further deposes that the respondent acted without jurisdiction when it failed to protect the applicant’s rights under Article 40(5) of the Constitution which relates to protection of intellectual property rights.  

8. In his submissions on behalf of the applicant, Learned Counsel, Mr. Mutiso submitted that the respondent acted without jurisdiction or in excess of jurisdiction in that it failed to insist on strict compliance with the law, specifically with its own regulations 47(1) of the Act. The applicant relied on the decision of the Court in R-vs-Public Procurement Administrative Review Board ex Parte Kenya Medical Supplies Agency & 3 Others High Court Judicial Review Misc. Application No. 491 of 2009 for the propositions that failure to insist on strict compliance with the law amounted to acting without jurisdiction.

9. The applicant was also aggrieved by what it perceived as the failure by the respondent to uphold and promote its patent rights.  It contended that such failure amounted to acting against the legitimate expectations of the applicant.  Counsel for the applicant submitted that the  Board misdirected itself by holding that it has no jurisdiction to determine the validity or otherwise of the applicant’s patent; that the validity or otherwise of the applicant’s patent was not the issue before the respondent as it was a conceded fact that the applicant was the only one which supplied a valid patent certificate to the respondent; that the respondent misdirected itself by finding that two of the applicant’s grounds for review before it, namely grounds 9 and 10, were about patentability of the applicant’s product while they were about the violation of the applicant’s intellectual property.

10. According to the applicant, the Public Procurement and disposal (PPD) Act which establishes the respondent has the objective of protecting local businesses; it was therefore the legitimate expectation of the applicant that the Board would uphold the objectives of the Act by protecting the applicant’s intellectual property.

11. Mr. Mutiso distinguished the authorities relied on by the respondent and interested parties, arguing that they were all foreign decisions unlike the decisions which the applicant was relying on, which were all local authorities.

12. Counsel further submitted that section 100 of the Act requires that an applicant files a judicial review application within 14 days of the decision, and that the section gives a 30 days’ stay prior to the award of a contract. He submitted that despite this, the 1^st Interested Party went ahead and granted the tender to the 2^nd Interested Party. He argued therefore that if the Court quashed the decision of the respondent without further orders, the applicant would be left without a remedy; and he therefore asked the Court, should it be inclined to find for the applicant and quash the decision of the respondent, to go a step further and make a finding that the applicant was the only responsive tenderer and was entitled to the tender; and in the alternative, to order that there should be a re-evaluation of the tender.

The Respondent’s Case

13. Ms. Masaka, Learned Counsel for the respondent, opposed the application. She relied on the replying affidavit sworn by the Secretary to the respondent, Ms.  Pauline O. Opiyo, on 25^th June 2013 and the respondent’s written submissions and authorities dated 29^th August 2013.

14. The respondent submitted that the applicant had not made out a case for the grant of the judicial review orders that it was seeking; that there are no facts that demonstrate that the respondent, in discharging its administrative duties, acted in excess or lack of jurisdiction, or that it arrived at an illegal or irrational decision.  According to the respondent, what the applicant was alleging was that the finding of the respondent should have been in the applicant’s favour as it was the patent holder of the goods the subject of the tender.  Ms. Masaka submitted that this issue was raised before the respondent; that the Board considered the issue but dismissed it on the basis that the respondent did not have jurisdiction over patentability which falls under the Intellectual Properties Tribunal; that what was required by the 1^st Interested Party were sanitary disposal bins; and that there was no requirement that the person to win the tender should be the patent holder.

15. Ms. Masaka submitted further that it was acknowledged that the applicant is the patent holder of foot operated sanitary bins, but not of all sanitary bins; that the tender was for supply of sanitary disposal bins and not of foot operated sanitary bins; and one did not need to be a patent holder to supply sanitary disposal bins.

16. To the applicant’s contention that the respondent had failed to adhere to its regulation 47(1), it was the respondent’s case that the regulation is optional; that the respondent found that the 2^nd Interested Party qualified under the sample, among other qualifications.

17. Counsel contended further that if the applicant was dissatisfied with the respondent’s decision, its option is provided under section 100 of the Act; that such option was to challenge the decision of the respondent by way of appeal, not to challenge the decision by way of judicial review.

18. It was the respondent’s case further that the orders being sought had been overtaken by events; that the order of Mandamus cannot issue as it would amount to this Court sitting as a tendering entity or as an appellate court over the decision of the respondent, and the application should therefore be dismissed.

The 1^st Interested Party’s Submissions

19. Mr. Mogere, Learned Counsel for the 1^st Interested Party, while associating himself with the submissions made on behalf of the respondent, relied on the averments made on behalf of the 1^st Interested Party by Prof. Paul Wainaina, the Acting Deputy Vice-Chancellor, Administration, of the 1^st Interested Party, on 10^th July 2013, and the written submissions dated 12^th August 2013.    

20. According to the 1^st Interested Party, the request for review before the respondent was challenging only the responsiveness of the tender; that under section 64 of the Act,  responsiveness is tested by considering the mandatory requirements, and in the present case, there were 8 such requirements; that further, the applicant did not allege that the other applicants did not meet the 8 requirements, and its challenge of the respondent’s decision could therefore not succeed.

21. Counsel submitted further that while the applicant was seeking an order of Mandamus, a consideration of the ruling by the respondent reveals that the applicant, after the financial evaluation, was the highest bidder.  He took the view therefore that the order of mandamus is not available as it is issued to compel compliance with the law; and that what the law requires under section 66 of the Act is to make the award in favour of the lowest bidder, which was not so in respect of the applicant. 

22. With regard to the allegation by the applicant that it was the holder of a patent certificate, Mr. Mogere submitted that the issue of a patent certificate was not before the Board; that what was before the Board was the issue of whether an indemnity certificate, whose purpose is to protect the procuring entity from claims of infringement of patent and other intellectual property rights in the course of performance of the contract, was a mandatory requirement; and that the Board found that it was not one of the 8 mandatory requirements but fell under the general conditions of the contract.

23. On the allegation by the applicant that the provisions of section 100 of Act gave a stay pending an application for judicial review orders, Counsel submitted that there is no automatic stay; and neither did the Court, in granting leave to bring these proceedings, allow the leave to operate as a stay. 

Submissions by the 2^nd Interested Party

24. The 2^nd Interested Party relied on the affidavit sworn in opposition to the application by Mr. Robert Kamau on 26^th July 2013 and written submissions dated 13^th August 2013.

25. Ms. Mutua, Learned Counsel for the 2^nd respondent, raised several grounds in opposition to the application. First, it was the 2^nd Interested Party’s submission that the respondent acted within its statutory jurisdiction. She relied in this regard on the case of Kenya Pipeline Co. Ltd and Another -vs- Public Procurement Administrative Review Board & Another Civil Appeal No 145 of 2011 (unreported) with regard to the jurisdiction of the Board in which the Court took the view that the decision of the Board should not be easily interfered with.

26. Like Mr. Mogere, Ms. Mutua submitted with regard to regulation 47(1) that Section 66 provides the mandatory requirements to be complied with.  She submitted that the 2^nd Interested Party had complied with the mandatory requirements with regard to the tender by the 1^st Interested Party, and that therefore the respondent arrived at a proper decision. In her view, what the applicant was seeking to do was to challenge the merits of the respondent’s decision, which it could not properly do in this application. She relied in support on the decision in R –vs- Chief Constable of North Wales  ex p. Evans (1982) 3 All E R 141.

27. To the applicant’s contention that the decision of the respondent was unreasonable as it had failed to consider that the applicant was the patent holder of foot operated sanitary bins, Counsel referred the Court to the decision in Associated Provincial Picture Houses, Ltd. –vs- Wednesbury Corporation [1947] 2 All E.R 680 with regard to what constitutes unreasonableness. She submitted further that Section 34(g) of the Act does not allow the procuring entity to make patents a requirement, and the procuring entity therefore acted reasonably in granting the tender to the 2^nd Interested Party.

28. On the applicant’s contention that the respondent had violated its legitimate expectation that as the patent holder it would be granted the tender, reliance was placed on the definition of legitimate expectations in Council of Civil Service Unions –vs- Minister for Civil Service (1984) 3 All ER.  Ms. Mutua pointed out that there had been two previous applications by the applicant before the respondent. Both of these applications, namely No. 26/2008 against the 1^st Interested Party and 28/2008 against Kenya Polytechnic University, touched on the issue of the applicant’s patent, and in both  matters, the Board had held that it had no jurisdiction to determine whether a patent had been infringed. Ms. Mutua pointed out that the applicant had never appealed against either of the two decisions on the issue of its patent. Counsel therefore submitted that the applicant could therefore not allege violation of its legitimate expectations.

Determination

29. In determining the matter before me, I must begin by considering the jurisdiction of the Court in a matter seeking to review the decision of a body exercising administrative functions such as are exercised by the respondent in this case.

30. It is, I believe, settled law that a court exercising judicial review jurisdiction is concerned with the procedural propriety of a decision, rather than with its merits. A court will consider the merits of a decision only in the circumstances set out in the case of Associated Provincial Picture Houses Ltd –versus- Wednesbury Corporation (supra), namely: where the administrative body has acted outside its jurisdiction, has taken into account matters it ought not to have taken into account, or failed to take into account matters it ought to have taken into account; or that it has made a decision that is ‘so unreasonable that no reasonable authority could ever come to it’.

31. Thus, the starting point in judicial review proceedings is that the remedy of judicial review is concerned with  reviewing, not the merits of the decision in respect of which the application for judicial review is made, but the decision making process. The purpose of the remedies availed to a party under the judicial review regime is to ensure that the individual is given fair treatment by the authority to which he has been subjected. The purpose is not to substitute the opinion of the court for that of the administrative body in which is vested statutory authority to determine the matter in question. In the case of Municipal Council of Mombasa vs. Republic & Umoja Consultants Ltd Civil Appeal No. 185 of 2001, the Court of Appeal set out the parameters of judicial review  when it held as follows:

“Judicial review is concerned with the decision making process, not with the merits of the decision itself: the Court would concern itself with such issues as to whether the decision makers had the jurisdiction, whether the persons affected by the decision were heard before it was made and whether in making the decision the decision maker took into account relevant matters or did take into account irrelevant matters…The court should not act as a Court of Appeal over the decider which would involve going into the merits of the decision itself-such as whether there was or there was not sufficient evidence to support the decision.”

32. Finally, it is worth mentioning the decision of the Court in the Ugandan case of Pastoli vs. Kabale District Local Government Council and Others [2008] 2 EA 300 in which the Court restated the grounds on which the Court exercises its judicial review jurisdiction. The Court, citing with approval the English case of Council of Civil Servants  Unions vs. Minister for the Civil Service [1985] AC 2 stated as follows:

“In order to succeed in an application for judicial review, the applicant has to show that the decision or act complained of is tainted with illegality, irrationality and procedural impropriety ...Illegality is when the decision-making authority commits an error of law in the process of taking or making the act, the subject of the complaint. Acting without jurisdiction or ultra vires, or contrary to the provisions of a law or its principles are instances of illegality. It is, for example, illegality, where a Chief Administrative Officer of a District interdicts a public servant on the direction of the District Executive Committee, when the powers to do so are vested by law in the District Service Commission... Irrationality is when there is such gross unreasonableness in the decision taken or act done, that no reasonable authority, addressing itself to the facts and the law before it, would have made such a decision. Such a decision is usually in defiance of logic and acceptable moral standards....Procedural Impropriety is when there is a failure to act fairly on the part of the decision-making authority in the process of taking a decision. The unfairness may be in non-observance of the Rules of Natural Justice or to act with procedural fairness towards one to be affected by the decision. It may also involve failure to adhere and observe procedural rules expressly laid down in a statute or legislative Instrument by which such authority exercises jurisdiction to make a decision.”

33. These, I believe, are the considerations to bear in mind in assessing the issues raised by the applicant in this matter.

34. The court notes that the applicant’s case before the respondent was that the decision of the 1^st Interested Party in which it awarded the tender for supply of sanitary bins, should be reviewed on the grounds that it had acted contrary to the provisions of Section 27 of the Act as the 2^nd Interested Party had not met the mandatory requirements for award of the tender which included the technical and general requirements; that the sample bin used by the 2^nd Interested Party was a patented product owned solely by the applicant; that the 2^nd Interested Party did not have a manufacturer’s authorization to use the bin and its use by the 2^nd Interested Party was in violation of the applicant’s intellectual property rights.

35. In the decision made by the respondent on 4^th June 2013 which the applicant impugns in these proceedings, the respondent held that the 2^nd Interested Party had complied with all the requirements of item C3 of the evaluation criteria; was rightfully considered responsive to the requirements set out by the Interested Party as the procuring entity; and that the respondent did not have jurisdiction to consider whether or not the applicant’s patent had been breached and that such a claim should be lodged with the Industrial Property Tribunal.

36. The question is whether the 2^nd respondent, in reaching its decision, acted within its mandate; whether its decision was procedurally fair, and whether even if procedurally fair, it was so unreasonable within the Wednesbury principles as to justify the intervention of this Court.

37. The applicant contends that the respondent acted without or in excess of jurisdiction by failing to insist on compliance with its own regulations, specifically regulation 47. It also impugns the respondent’s decision for its alleged failure to enforce the applicant’s intellectual property rights.

Protection of Patent/ Intellectual Property Rights

38. To deal first with the alleged failure by the respondent to protect the applicant’s patent rights, the Court notes that the jurisdiction of the respondent with regard to a party dissatisfied with the decision of a procuring entity is clearly spelt out in the provisions of the Act. Section 93(1) thereof provides as follows:

1. Subject to the provisions of this Part, any candidate who claims to have suffered or to risk suffering, loss or damage due to the breach of a duty imposed on a procuring entity by this Act or the regulations, may seek administrative review as in such manner as may be prescribed.

39. I agree with the submissions by the respondent and the Interested Parties that it is no part of the respondent’s functions to inquire whether there has been an infringement of the applicant’s patent or not. Such determination lies within the jurisdiction of the Industrial Property Tribunal established under the Industrial Property Act.  Should the respondent involve itself in an inquiry into whether or not there has been an infringement of the applicant’s patent, it would clearly be engaging in a matter that is outside its jurisdiction. There is therefore no merit in this limb of the applicant’s case.

40. The second issue concerns the respondent’s failure to insist on compliance with the provisions of Regulation 47(1) of the Public Procurement and Disposal Regulations. This regulation pertains to the conduct of a preliminary evaluation by the evaluation committee of a procuring entity, and regulation 47(1)(f) requires that it determines whether all the required documents and information have been provided.

41. The Court has read the ruling by the respondent dated 4^th June 2013. It notes in particular the respondent’s evaluation of the applicant’s grounds of review, particularly with regard to the provisions of section 64 of the Act and regulation 47 and 48 of the regulations made under the Act. The respondent found that the provisions of the section and the regulations apply at the preliminary stage of the evaluation of a tender, and that the 1^st Interested Party had found that all the tenderers were responsive at this preliminary stage.

42. From the material before me therefore, it is clear that the respondent properly considered all the matters it was required to consider, and acted within its jurisdiction in coming to the decision that the 1^st Interested Party had properly awarded a tender to the 2^nd Interested Party. There is nothing in the pleadings before me that demonstrates any procedural impropriety or unreasonableness that would justify an interference by this Court in the respondent’s decision.

43. In the circumstances, the application before me must fail. It is hereby dismissed with costs to the respondent and the Interested Party.

Dated Delivered and signed this 19^th day of December 2013

MUMBI NGUGI

JUDGE

Mr. Mutiso instructed by the firm of R. M. Mutiso & Co. Advocates for the Applicant

Ms Masaka instructed by the State Law Office for the Respondent

Mr Mogere & Mr. Mwangi instructed by the firm of Mohammed Muigai & Co. Advocates for the 1^st Interested Party

Ms Mutua instructed by the firm of Issa & Company Advocates for the 2^nd Interested Party