Republic v Ministry of Interior and Coordination of National Government Ex-parte ZTE Corporation & another [2014] KEHC 4305 (KLR)

REPUBLIC OF KENYA

IN THE HIGH COURT OF KENYA AT NAIROBI

JUDICIAL REVIEW CASE NO. 441 OF 2013

IN THE MATTER OF AN APPLICATION BY ZTE CORPORATION LIMITED FOR JUDICIAL REVIEW OF THE NATURE OF CERTIORARI AND PROHIBITION AND MANDAMUS 

AND

IN THE MATTER OF THE PUBLIC PROCUREMENT AND DISPOSAL ACT, 2005,  AND THE PUBLIC  PROCUREMENT AND DISPOSAL (REGULATIONS) 2006

AND BY THE MINISTRY OF INTERIOR AND COORDINATION OF NATIONAL GOVERNMENT (OFFICE OF THE PRESIDENT)

AND

IN THE MATTER OF AN APPLICATION FOR JUDICIAL REVIEW ORDERS IN THE NATURE OF CERTIORARI AND PROHIBITION AND MANDAMUS

BETWEEN

REPUBLIC  .......................................................................................................................................APPLICANT

VERSUS

MINISTRY OF INTERIOR AND COORDINATION OF NATIONAL GOVERNMENT..........1^ST RESPONDENT

THE PUBLIC PROCUREMENT ADMINISTRATIVE REVIEW BOARD..............………. 2^ND RESPONDENT

EX-PARTE:         ZTE CORPORATION

AND

                             ZTE CORPORATION (KENYA) LIMITED                            

JUDGEMENT

1. By a Notice of Motion dated 21^st January December, 2012, the ex parte applicants herein, ZTE Corporation and ZTE Corporation (Kenya) Limited, seeks the following orders:

1. THAT an Order of Certiorari to bring into tis court and quash the decision of the 1^st Respondent dated 3^rd October, 2013 and carried in its letter dated 18^th October 2013 and also its decision to terminate the procurement in the letter dated 30^th October 2013 and the decision of the 2^nd Respondent (PPARB) dated 27^th November 2013.
2. THAT an order in the nature of prohibition to prohibit the procuring entity or any one claiming under them, pursuant to the decision aforesaid dated 27^th November, 2013 from advertising or in any manner whatsoever placing for tender or proceeding further with the procurement or re-advertising the same, notwithstanding the complaint lodged herein.
3. THAT an Order of Mandamus directing the 1^st Respondent to conclude the tender/award process by having an impartial financial evaluation committee undertaking the financial proposals, without involving unqualified persons to participate, and then on getting the said guidance from the said Committee, the Ministerial Tender Committee entering into negotiations with the ex-parte Applicant in line with Section 84 of the Public Procurement and Disposal Act.
4. THAT the costs of this application be provided for.

Ex Parte Applicant’s Case

2. The same application was supported by a verifying affidavit sworn by Yang Yong, the applicant’s Director in Charge of Enterprises and Government unit in the region.
3. According to the deponent, the Applicants, corporations with its registered headquarters and regional head offices in the Schenzen City in the Peoples Republic (P.R) of China, and Nairobi, Kenya respectively, are internationally and regionally well-established business firms that deal with their expertise sectors of researching, manufacturing, installing and servicing of Telecommunication equipments and solution providers. According to him, at these material times the Kenya-Chinese governments negotiated concessionary loan  agreements and cultural exchanges in existence and that in respect of the instant project, the said loans were not capped at USD $ 100 million, as incorrectly alleged and relied on at the hearings before the second Respondent. 
4. On 3^rd February, 2012, or thereabout, the 1^st Respondent, by its predecessors, the Ministry of State and Provincial Administrative, by an advertisement in the local print media, advertised and called for expressions of interest for a project for Supply, Installation, Testing and Commissioning of the National Surveillance, Communication, command and control systems in the National Police Service which was limited to Chinese firms, in view of the fact that the finding was from a pre-negotiated concessionary loan given to Kenya by the Government of the PR China.
5. Pursuant thereto the Applicant, together with China Electronic Engineering, AVIC International Holding, ALIT, China Xinshidai Company,    ZTE Corporation and Huawai Technologies Africa Limited, filed an expression of interest. On the 1^st Respondent checking the bids on their responsiveness to the conditions set out in the request for expression of interest the 1^st Respondent found only ALIT, ZTE Corporation, Huawai technologies Africa Limited and AVIC International Holding bids as qualified and shortlisted them on 23^rd May 2012. The said four (4) firms were then invited to bid, on the tender documents, and submit their fully filled bid documents on 27^th July, 2012, and at the tender closing, only ZTE Corporation, Huawei Technologies Africa Limited and AVIC International Holdings had submitted their bids.
6. It was averred that according to the bid documents, the proposals were to be both technical and financial proposals and evaluation was undertaken in four (4) stages, namely; Preliminary, Technical mandatory requirements, detailed technical evaluation and thereafter the Financial Evaluation. On the preliminary Evaluation being undertaken, all the bidders, including the Applicant passed the preliminary evaluation on the six mandatory parameters. However, only the Applicant (ZTE) and Huawei Technologies were subjected to detailed technical evaluation, based on the Criteria tabulated in the tender documents, and which Criteria had been set out in the tender document on page 82 through to 85 at which stage the Ex-parte Applicant emerging with the most responsive bid scoring 76.7/80 while the other second bidder scored 61.76/80. Accordingly, the Ex-parte Applicant’s financial proposal was the only one opened on Monday 10^th December, 2012, and its evaluation was reportedly commenced immediately, while the other bid of the technically unsuccessful firm of Huawei was said to be returned to them unopened.
7. However, on 14^th December, 2012, while the said Applicant’s financial proposal was pending evaluation Messrs Huawei Technologies filed a request for Review before the 2^nd Respondent, vide Application No. 68 of 2012, alleging a number of breaches by the 1^st Respondent, but generally arguing that it was “doubtful whether ZTE Corporation met the mandatory system requirements for the tender” delay in evaluation the tenders, and unlawful and illegal disclosure of information during the Procurement and which disclosure would prejudice legitimate commercial interests or inhibit fair competition, comparison or clarification of tenders.
8. In response to the said request for review, , the 1^st Respondent stated that the technical evaluation was completed on 28^th August, 2012 and the result was that only one bidder, ZTE Corporation, was technically responsive and further that Section III of the Appendix to instructions to Tenders Special condition number 8 page 81 of tender document, a site visit was to be undertaken by the technical evaluation Committee to verify the project(s) undertaken by the Applicant, but were yet to be undertaken, for amongst other reasons, lack of funds and protocol challenges to secure permission.
9. Upon hearing the request and considering the ground therefor, the 2^nd Respondent in a considered opinion dated 14^th January, 2013 found that all the grounds in the Request for Review failed and dismissed the Request for Review, and directed the procurement process to continue. However, on 22^nd January, 2013 the Complainant thereat Messrs Huawei filed proceedings against the said decision of the Board vide Nairobi, High Court Misc. Application JR No. 16 of 2013 based on the very same grounds raised before the Board. However the said judicial review proceedings were terminated on 27^th February, 2013 when the Ex-parte Applicant thereat, withdrew them.
10. Since the said date, the Applicant’s Advocates on record on numerous occasions sought information on when the 1^st Respondent would commence and finalise on the Applicant’s Financial Proposal. However, by a letter dated 18^th October, 2013 and delivered on 23^rd October 2013, the 1^st Respondent wrote and notified the Ex-parte Applicant that its tender’s financial proposal was not successful.  By a letter dated 24^th October, 2013, the ex parte applicant sought from the 1^st Respondent reasons for the rejection decision; all the minutes and reports of the alluded discussion and adjudication; and the evaluation reports and any reports by experts or other considered and reasons for arriving at the decision.  On the 1^st Respondent’s failure, or delay in responding suitably and expeditiously, the ex parte Applicant filed a Request for Review at the 2^nd Respondent vide No. 42 of 2013.
11. According to the applicant, the 1^st Respondent having undertaken an evaluation of an expression of interest, and prequalified the Applicant, and then undertaken a preliminary technical, and a detailed technical evaluation and made the decision that the Applicant’s technical proposal was responsive, and a awarded it the scores of 76.7/80, it was estopped by its own record, the board’s decision on the same and its own representations to the Ex-parte Applicant and to all others, from resiling on this, and purport to undertake another or a re-evaluation of the technical tender proposal, except as concerns the verification of the provided successfully completed Applicant’s projects. Secondly, the 1^st Respondent, having elected, with the full knowledge that the other bidders had failed in their technical proposals, to return their financial proposal unopened, and to open and begin evaluation of the ex-parte Applicant’s financial proposal, it is stopped, from injudiciously exercising the right conferred by Section 36(1) of the Public Procurement and Disposal Act, 2005, (hereinafter referred to as the Act) or by any other prescribed law. Thirdly, the 1^st Respondent’s decision contained in its letter dated 30^th October, 2013, to the effect that the subject matter of the procurement proceedings had been terminated under Section 36(1) of the Act, to the effect that a termination under Section 36(1) of the Act is unreviewable, in view of Section 36(6), by the Review Board or court is unconstitutional and a legal heresy, when one takes into account the special circumstances of this matter.
12. Based on legal advice from counsel, it was deposed that  the 1^st Respondent in its purported Special Ministerial Tender Committee meeting held on 3^rd October, 2013 following which the decision to reject the Applicant’s financial proposal and/or to terminate the procurement, was made erred when it muddled up and mixed up the technical and financial evaluation members, whereas the technical evaluation committee had many months before finalized their evaluation; it irregularly and unprocedurally reopened the evaluation of the technical evaluation whose evaluation criteria, and the scores allocated were by then beyond their powers, hence acted beyond their jurisdiction; it illegally created another evaluation step and criteria contrary to the criteria set out in the tender documents, and the law governing procurement in Kenya, when it injudiciously introduced what it called “contentious issues”; it allowed or invited strangers and persons who had a conflict of interest both institutional bias and ”were working with the loosing competitors of the Ex-parte Applicant; the representatives of the firms who were invited to the Ministerial Tender Committee of 3^rd October, 2013 that made the decisions impugned herein, contrary to the requirement of law, in Section 43(2) or any other law failed to disclose their conflict of interest to the 1^st Respondent, thereby voiding the tender committee impugned decision(s); the Representatives of the firms who were invited to the Ministerial Tender Committee of 3^rd October, 2013, that made the decisions impugned herein, contrary to the requirement of law, in section 43(2) or any other law failed to disclose their conflict of interest to the 1^st Respondent, thereby voiding the tender committee impugned decision(s).

Respondents’ Case

13. On 18^th December, 2013, the Respondents filed a notice of preliminary objection in which it was stated that the Court lacks jurisdiction to hear and determine the instant application by dint of the provisions of section 36(6) of the Act under which it is provided that a termination thereunder is not reviewable by the Review Board or a Court.
14. In opposition to the application, the 2^nd interested party filed a replying affidavit sworn by Pauline O. Opiyo, its secretary on 21^st January, 2014.
15. According to the deponent, the 2^nd Respondent received the Applicant’s Request for Review on the award of Tender No. OOP/NSCCC/2011-2012 for Supply, Installation and Commissioning of the National Surveillance, Communication, Command and Control Systems in the national Police Service, on 29^th October 2013. Thereupon the 2^nd Respondent heard both parties on 22^nd November 2013 considered their submissions, determined the application for review and delivered its ruling on 27^th November 2013 by which it dismissed the Request for Review by the Applicant herein.
16. According to her the said decision was based on the fact that the Board’s finding in Application No. 68 of 2013 on Technical Evaluation was a prima facie finding on some of the issues and thus the use of the words “on the face of it” and that it did not preclude the procuring Entity from exercising the powers conferred upon it under the Act; that the Procuring Entity did not breach the provisions of Section 2, 27, 66(4) and 67 of the Act; that the issue of breach of Section 36 of the Act on termination of procurement proceedings was not part of the Request for Review filed before the board by the Applicant; and that there was no evidence to support the allegation that the Procuring Entity disclosed confidential proceedings of Application No. 68 of 2012 to third parties since decisions of the Board are posted on official PPOA Website upon completion of a review and once posted, they become public documents.
17. According to her, in making its decision, the Board considered only the provisions of the Act, the Regulations, and the facts presented before it by the Parties and no extraneous issues whatsoever were considered hence the decision by the Board was a decision made within its mandate, and the specific sections of the law on which the Board’s decision was pegged have been expressly pronounced in the Board’s decision.  Therefore the Applicant’s presentation that the Board acted ultra vires in making its decision is vehemently opposed by the Respondent. To her, the Applicant’s application is therefore, made in bad faith, has no merit and is only calculated to discredit the credibility of the Respondent’s mandate and function, while ultimately eroding the public’s confidence in procurements procedures and processes.

Applicant’s Submissions

18. On behalf of the applicant, it was submitted that under section 94 of the Act the effect of the notice give pursuant to section 93 thereof is to stop the 1^st Respondent from making further decision with regard to the subject tender including in the instant case the purported termination of the subject tender. Since these are facts which must be ascertained by the Court, the preliminary objection ought to fail.
19. It was further submitted that the filing of the request for review by the applicant was necessitated by the 1^st Respondent’s decision that the applicant’s proposal was not successful without furnishing any reasons therefor as required under Article 47 of the Constitution. It was therefore submitted that the 1^st Respondent’s preliminary objection reeks of mischief and it is estopped from raising the same.
20. According to the applicant, judicial review proceedings governed by the Constitution being special proceedings the attempt by section 36(6) of the Act to oust the jurisdiction of the High Court to determine the matter cannot be allowed and reliance was sought in Republic vs. Public Procurement Administrative Board ex parte Selex Sistemi Integrati [2008] eKLR, Law Society of Kenya vs. Centre for Human Rights and Democracy and 13 Others [2013] KLR and Anthony Austin vs. Attorney General Case No. 1982 of 2003.
21.   It was further submitted that since section 100(2) of the Act permits a party aggrieved by a decision of the Board to appeal to the High Court, there is a contradiction between the two provisions. According to the applicant, the 1^st Respondent raised the same objection before the Board which objection was dismissed hence under section 100 of the Act, that decision is binding s it was not appealed against.
22. On the merits, it was submitted that by purporting to re-open the technical evaluation after the same had been determined, the 1^st respondent in essence created another evaluation criteria that never existed, hence beyond its jurisdiction and the applicant relied on Republic vs. Deputy Inspector General of Police & 32 Others [2013] KLR and Re Bivac International SA (Bureau Veritas_) [2005] 2 EA 43.
23. It was further contended that the 1^st Respondent in the ministerial meeting at which the impugned decision was made, parties who were business partners with the unsuccessful bidder were invited contrary to section 43(2) of the Act. As the 1^st Respondent’s Ministerial Committee had already determined that the ex parte applicant’s technical evaluation was the best, the action of another Ministerial Tender Committee re-evaluating the same technical proposal rendered the 1^st Respondent’s action illegal, irrational and procedurally improper and in support of this submission the applicant relied on Rahab Wanjiru Njuguna vs. Inspector General of Police & Another [2013] eKLR.
24. It was submitted that by upholding the contention that the subject procurement tender was limited to a concessionary loan of 100 million Dollars without evidence, the 2^nd Respondent was in error.
25. According to the applicant, the applicant relied on the procedural expectation that if as purported by the 1^st Respondent, its financial proposal was above budget, then the 1^st Respondent would have invoked section 84 of the Act and invited the ex parte applicant to negotiate the financial proposal. Further, it was submitted that it is established practice upon a bidder having passed all other evaluations, but the financial proposal is considered high for the Procuring Entity to invite the said bidder for negotiations on whether the figures can be reduced which was not done in the present case. To the applicant, the 2^nd Respondent acted in excess of its jurisdiction when it failed to interrogate the basis of the 1^st Respondent’s silence and to apply the spirit and policy of the entire Act as read with Article 227(1) of the Constitution which enjoined the 1^st Respondent to process the procurement in a fair, transparent, competitive and cost effective manner. Based on Rahab Wanjiru Njuguna vs. Inspector General of Police & Another (supra), it was contended that the grounds upon which the court exercises judicial review jurisdiction are incapable of exhaustive listing and cannot be confined to illegality, irrationality and impropriety.
26. In his oral highlighting Mr. C N Kihara, learned counsel for the applicant was of the view that the Court has jurisdiction to review the decision of the Board as well as the decision in the letter of 18^th October 2013. Accordingly, it was submitted that the Court has tejurisdiction in these proceedings to review both the decision of the Board and the Procuring Entity since the applicant invoked the Law Reform Act, the Public Procurement and Disposals Act as well as the inherent powers of the Court. In learned counsel’s view under section 44 of the Act, the Court can review the administrative decisions of the procuring entity even without going to the Board since pursuant to Article 47 of the Constitution the avenue of the request for review to the Board is in addition to any other recourse which includes this Court.
27. It was also submitted that there was no factual basis for the decision. The funding system of the Bank of China had no limitation in the tender documents themselves. Although there was a discretion to enter into negotiation with the highest bidder counsel was of the view that the Procuring Entity had an obligation to do so judiciously. It was submitted that a re-tender would expose the applicant to unfair competition since its tender is in the public and involves a disclosure of technical aspects of the tender more so as what is in issue is a security tender.
28. The applicant therefore urged the Court not to allow the decision to stand but to allow the application with costs

Respondents’ Submissions

29.  On behalf of the Respondents, it was submitted on the authority of Re Bivac International SA (Bureau Veritas) (supra) that incumbent upon a party in a judicial review application who seeks the issuance of any of the orders to prove breach of any of the three grounds of illegality, impropriety of procedure or irrationality in order to succeed on the claim.
30. It was submitted that at no time did the applicant challenge the jurisdiction of the 2^nd Respondent. To the contrary it was the applicant who invoke d the 2^nd Respondent’s jurisdiction. Citing sections 5, 93 and 100 of the Act it was submitted that the 1^st Respondent is bound by the findings of the 2^nd Respondent subject to an appeal or judicial review therefrom which are the only matters that can be properly before this Court. However, in an application for judicial review, the applicant’s case is limited to grounds set out in the statement of facts and for this submission the authority of Khobesh Agencies Limited and Others vs. Minister for Foreign Affairs and International Relations and Others Nairobi JR No. 262 of 2012 [2013] eKLR was relied upon, as well as Order 53 rule 4(1) of the Civil Procedure Rules. Therefore it was submitted that all the grounds directed against the 1^st Respondent ought to have been raised before the 2^nd Respondent where a reasoned decision was made. It was submitted that what the applicant is trying to do is to have a hearing on merits of the decision of the 2^nd Respondent and this Court has no jurisdiction to do that. It was contended that both the issues of provisions of sections 84 and 36 of the Act were not raised before the 2^nd Respondent. In any case section 84 of the Act is discretionary hence the Court cannot compel the procuring entity to exercise the same in a particular manner. In any case the negotiations can only be initiated by the procuring entity and not the applicant and can only be undertaken by parties who have submitted successful proposals unlike the applicant herein. The Respondents in support of their submissions relied on Republic vs. Kenya Revenue Authority ex parte Yaya Towers Limited [2008] eKLR, Seventh Day Adventist Church (East Africa) Limited vs. Permanent Secretary, Ministry of Nairobi Metropolitan Development & Another [2014] eKLR, Municipal Council of Mombasa vs. Republic & Umoja Consultants Ltd Appeal No. 185 of 2001, Pastoli vs. Kabale District Local Government Council and Others [2008] 2 EA 300.
31. It was submitted that whether or not to grant judicial review orders sought is discretionary and hence public interest ought to be considered hence an award of tender which is 106% and above the budget cost cannot be beneficial to the public hence the order of mandamus ought not to be granted. On the other hand to grant the order of prohibition sought would amount to curtailing the statutory duty and function of the procuring entity and urged the Court to dismiss the application with costs. The Respondents, to buttress this point, relied on Republic vs. Judicial Service Commission ex parte Pareno [2004] 1 KLR 203 at 219, R vs. Kenya National Commission on Human Rights ex parte Uhuru Kenyatta [2010] EKLR, Halsbury’s Laws of England 4^th Volume page 805 paras 89, 90 and 1508, Edward Gacau Kariuki & Others vs. Registrar of Societies [2007] eKLR and Republic vs. Kenya Revenue Athority & Another ex parte Bear Africa (K) Limited.
32.  In his oral address, Mr Bitta, learned counsel for the Respondents submitted that our law with respect to judicial review is crystallised under the Law Reform Act as opposed to the English or European countries where the law has developed. It was further submitted that the applicant had the choice to elect to come to Court against the decision of the Procuring Entity or to await the decision of the Board and elected the latter. It cannot now challenge the decision of the Entity as if there were other proceedings before the Board.
33. According to him, the applicant has not challenged the jurisdiction of the Board to hear the complaint and have not demonstrated that the decision was unreasonable, unprocedural or illegal. Further the decision with respect to overpricing has not similarly ben challenged. The applicant was alive to the fact that the Government had negotiated for Kshs 100 million Dollars but sought 106% of the said budget. Public procurement, it was submitted, is about getting value for money and the utilization of public funds. Therefore to compel the entity to undertake 106% over and above what was financed would be against public interest and that was the basis of the 2^nd Respondent’s decision.

Determinations

34. I have considered the application, the statutory statement, the affidavits, both in support of and in opposition to the application.
35. The first issue for determination is whether this Court has jurisdiction to entertain the present application. It is important to determine this issue in light of the holding in Owners and Masters of The Motor Vessel “Joey” vs. Owners and Masters of The Motor Tugs “Barbara” and “Steve B” [2008] 1 EA 367 where the Court of Appeal expressed itself as follows:

“The question of jurisdiction is a threshold issue and must be determined by a judge at the threshold stage, using such evidence as may be placed before him by the parties. It is reasonably plain that a question of jurisdiction ought to be raised at the earliest opportunity and the court seized of the matter is then obliged to decide the issue right away on the material before it. Jurisdiction is everything and without it, a court has no power to make one more step. Where a court has no jurisdiction there would be no basis for a continuation of proceedings pending other evidence. A court of law downs tools in respect of the matter before it the moment it holds the opinion that it is without jurisdiction.…As soon as that is done, the court should hear and dispose of that issue without further ado.”

36. Similarly, the same Court in Owners of the Motor Vessel “Lilian S” vs. Caltex Oil (Kenya) Limited [1989] KLR 1 (Nyarangi, JA) expressed himself as follows:

“By jurisdiction is meant the authority which a court has to decide matters that are before it or take cognisance of matters presented in a formal way for its decision. The limits of this authority are imposed by the statute, charter, or commission under which the court is constituted and may be extended or restricted by the like means. If no restriction or limit is imposed the jurisdiction is said to be unlimited. A limitation may be either as to the kind and nature of the actions and matters of which the particular court has cognisance, or as to the area over which the jurisdiction shall extend, or it may partake both of these characteristics. If the jurisdiction of an inferior court or tribunal (including an arbitrator) depends on the existence of a particular state of facts, the court or tribunal must inquire into the existence of the facts in order to decide whether it has jurisdiction; but, except where the court or tribunal has been given power to determine conclusively whether the facts exist. Where the court takes it upon itself to exercise a jurisdiction which it does not possess, its decision amounts to nothing. Jurisdiction must be acquired before judgement is given.......Jurisdiction is everything. Without it, a Court has no power to make one more step. Where a court has no jurisdiction there would be no basis for a continuation of proceedings pending other evidence. A Court of law downs its tools in respect of the matter before it the moment it holds the opinion that it is without jurisdiction”.

37. The same beaten path was followed by the Supreme Court in Samuel Kamau Macharia & Another vs. Kenya Commercial Bank Limited & 2 Others [2012] eKLR where it expressed itself as follows:

“A Court’s jurisdiction flows from either the Constitution or legislation or both. Thus, a Court of law can only exercise jurisdiction as conferred by the constitution or other written law. It cannot arrogate to itself jurisdiction exceeding that which is conferred upon it by law. We agree with counsel for the first and second respondents in his submission that the issue as to whether a Court of law has jurisdiction to entertain a matter before it, is not one of mere procedural technicality; it goes to the very heart of the matter, for without jurisdiction, the Court cannot entertain any proceedings. This Court dealt with the question of jurisdiction extensively in, In the Matter of the Interim Independent Electoral Commission (Applicant), Constitutional Application Number 2 of 2011. Where the Constitution exhaustively provides for the jurisdiction of a Court of law, the Court must operate within the constitutional limits. It cannot expand its jurisdiction through judicial craft or innovation. Nor can Parliament confer jurisdiction upon a Court of law beyond the scope defined by the Constitution. Where the Constitution confers power upon Parliament to set the jurisdiction of a Court of law or tribunal, the legislature would be within its authority to prescribe the jurisdiction of such a court or tribunal by statute law.”

38.  Section 36 of the Act provides as follows:

(1) A procuring entity may, at any time, terminate procurement proceedings without entering into a contract.

(2) The procuring entity shall give prompt notice of a termination to each person who submitted a tender, proposal or quotation or, if direct procurement was being used, to each person with whom the procuring entity was negotiating.

(3) On the request of a person described in subsection (2), the procuring entity shall give its reasons for terminating the procurement proceedings within fourteen days of the request.

(4) If the procurement proceedings involved tenders and the proceedings are terminated before the tenders are opened, the procuring entity shall return the tenders unopened.

(5) The procuring entity shall not be liable to any person for a termination under this section.

(6) A termination under this section shall not be reviewed by the Review Board or a court.

(7) A public entity that terminates procurement proceedings shall give the Authority a written report on the termination.

(8) A report under subsection (7) shall include the reasons for the termination and shall be made in accordance with any directions of the Authority with respect to the contents of the report and when it is due.

39. In other words, a decision made under section 36(6) of the Act is final. I agree that the enactment of the Act itself was informed by consideration of public interest. In Republic vs. Public Procurement Administrative Review Board & Another Ex Parte Selex Sistemi Integrati Nairobi HCMA No. 1260 of 2007 [2008] KLR 728, Nyamu, J (as he then was) recognised the public interest in the enactment of the Act when he stated as follows:

“Section 2 of the Public Procurement and Disposal Act, 2005 is elaborate on the purpose of the Act and top on the list, is to maximize economy and efficiency as well as to increase public confidence in those procedures. The Act was legislated to hasten or expedite the Procurement Procedures for the benefit of the public. Indeed, sections 36(6) and 100(4) of the Act which are ouster clauses, were tailored to accelerate finality of Public Projects. The intention of efficiency is noble and must be appreciated if the development agenda is to be achieved. The Court cannot ignore that objective because it is meant for a wider public good as opposed to an individual who may be dissatisfied with the procuring entity. However the Court must put all public interest considerations in the scales and not only the finality consideration. The said Act also has other objectives namely to promote the integrity and fairness of the procurement procedures and to increase transparency and accountability. Fairness, transparency and accountability are core values of a modern society like Kenya. They are equally important and may not be sacrificed at the altar of finality. The Court must look into each and every case and its circumstances and balance the public interest with that of a dissatisfied applicant. Adjudication of disputes is a constitutional mandate of the Courts and the Court cannot abdicate from it.”

40. In the above case, it was held that ouster clauses are effective as long as they are not unconstitutional, consistent with the main objectives of the Act and pass the test of reasonableness and proportionality. The learned Judge recognised that the Court’s jurisdiction may be precluded or restricted by either legislative mandate or certain special texts. However, where the ouster clause leaves an aggrieved party with no effective remedy or at all, it is my view that such ouster clause will be struck down as being unreasonable. I therefore agree with Mwera, J (as he then was) in Safmarine Container N V of Antwerp vs. Kenya Ports Authority Mombasa High Court Civil Case No. 263 of 2010 to the extent that it is not only the Constitution that can limit/confer jurisdiction of the court but that any other law may by express provision confer or limit that jurisdiction. In his decision the learned Judge relied on Article 159 of the Constitution. Clause (2)(c) of the said Article provides that in exercising judicial authority, the courts and tribunals shall be guided by the principle that alternative forms of dispute resolution including reconciliation, mediation, arbitration and traditional dispute resolution mechanisms shall be promoted. Courts and Tribunals cannot be said to be promoting alternative dispute resolution mechanisms when they readily entertain disputes which ought to be resolved in other legal fora. Accordingly I agree that where there is an alternative remedy and procedure available for the resolution of the dispute that remedy ought to be pursued and the procedure adhered to. Nevertheless any provision purporting to limit the jurisdiction of the High Court must itself derive its validity from the Constitution itself and must do so expressly and not by implication unless the implication is necessary for the carrying into effect the provisions of the Act.  In Narok County Council vs. Trans Mara County Council & Another Civil Appeal No. 25 of 2000, the Court of Appeal expressed itself as follows:

“Although section 60 of the Constitution gives the High Court unlimited jurisdiction, it cannot be understood to mean that it can be used to clothe the High Court with jurisdiction to deal with matters which a statute has directed should be done by a minister as part of his statutory duty; it is otherwise where the statute is silent on what is to be done in the event of a disagreement...Where the statute provides that in case of a dispute the Minister is to give direction, the jurisdiction of the Court can be invoked only if the Minister refuses to give a direction or in purporting to do so, arrives at a decision which is grossly unfair or perverse. In the latter, his decision can be challenged by an application to the High Court for a writ of certiorari because under the relevant section the decision is to be made on a fair basis. But if the Minister simply refuses to discharge his statutory duty, his refusal can also be challenged in the High Court by way of mandamus to compel the Minister to perform his statutory duty but not by way of a suit... If the Court acts without jurisdiction, the proceedings are a nullity... The extent of the jurisdiction of the High Court may not only, be that which is conferred or limited by the constitution but also, that which the constitution or any other law, may by express provisions or by necessary implication, so confer or limit...The jurisdiction of the High Court can be ousted by an Act of Parliament and in such cases all that the High Court can do is to enforce by judicial review proceedings, the implementation of the provisions of the Act; certainly not, to usurp the powers of the Minister... Even though resort to the judicial review process, may in appropriate cases not be a bar to other proceedings such as a plaint, this may not apply in peculiar circumstances such as this one, so as to entitle the Judge to do not only what he was not requested to do, but also, to do what he had no jurisdiction to embark upon...Where the law provides for procedure to be followed, the parties are bound to follow the procedure provided by the law before the parties can resort to a Court of law as the Court would have no jurisdiction to entertain the dispute”.

41. I, further associate myself with the view expressed by Majanja, J in Dickson Mukwelukeine vs. Attorney General & 4 Others Nairobi High Court Petition No. 390 of 2012 that alternative dispute resolution processes are complementary to the judicial process and by virtue of Article 159(2)(c) of the Constitution of Kenya, 2010, the Court is obligated to promote these modes of alternative dispute resolution and that it is not inconsistent with Articles 22 and 23 to insist that statutory processes be followed particularly where such processes are for the specific purpose of realising, promoting and protecting certain rights.  Accordingly the Court is entitled to either stay the proceedings until such a time as the alternative remedy has been pursued or bring an end to the proceedings before the Court and leave the parties to pursue the alternative remedy. In the result I am of the view and I hold that the Court’s jurisdiction under Article 165 can be limited and/or restricted by an Act of Parliament.
42. In this case, it is alleged that the purported termination under section 36(6) of the Act was done during the pendency of a request for review before the Board.   Section 94 of the Act provides as follows:

Upon receiving a request for a review under section 93, the secretary to the Review Board shall notify the procuring entity of the pending review and the suspension of the procurement proceedings in such manner as may be prescribed.

43. The effect of this provision is that on a request for review being made, the Board is enjoined to inform the procuring entity of the said request and the suspension of the procurement proceedings. In this case the applicant’s request for review was filed with the 2^nd Respondent on 29^th October, 2013. The 1^st Respondent’s letter informing the Applicant that the tender had been terminated was however dated 30^th October, 2013. In its submissions in opposition to the preliminary objection, the Applicant contended that the 1^st Respondent was notified by the 2^nd Respondent on 29^th October, 2013. If that contention was true then it would follow that any action taken by the 1^st Respondent in furtherance of the procurement proceedings including termination thereof would be unlawful. I have however, perused the documents relied upon the applicant in these proceedings and I am unable to find any evidence that the 1^st Respondent was notified about the request on 29^th October, 2013 as contended or at all. To make matters worse there was no such averment in the supporting affidavit at all. In my view the suspension of the procurement proceedings is sequential. The applicant requests for review to the Board, the Board notifies the Procurement Entity that a request has been made and suspends the procurement proceedings and the Entity accordingly suspends the same. Without evidence that the termination of the contract was effected after the proceedings had been suspended by the Board, I have no basis for finding that the 1^st Respondent’s termination of the contract was unlawful on that score.
44. It has been contended that this Court has the jurisdiction to review the decision of the Procuring Entity notwithstanding the availability of the procedure for review of the decision of the Entity by the Board. Section 99 of the Act provides:

The right to request a review under this Part is in addition to any other legal remedy a person may have.

45. The remedy of judicial review is now not only a statutory remedy but is a constitutional remedy underpinned under Article 165(6) of the Constitution. That remedy, it is my view is one of the additional legal remedies contemplated under section 99 aforesaid. However, one must not lose sight of the fact that the decision whether or not to grant judicial review orders is an exercise of judicial discretion and as was held by Ochieng, J in John Fitzgerald Kennedy Omanga vs. The Postmaster General Postal Corporation of Kenya & 2 Others Nairobi HCMA No. 997 of 2003, for the Court to require the alternative procedure to be exhausted prior to resorting to judicial review is in accord with judicial review being very properly regarded as a remedy of last resort though the applicant will not be required to resort to some other procedure if that other procedure is less convenient or otherwise less appropriate. Therefore, unless due to the inherent nature of the remedy provided under the statute to resort thereto would be less convenient or otherwise less appropriate, parties ought to follow the procedure provided for under the statute. This position was re-affirmed by the Court of Appeal in Speaker of The National Assembly vs. Karume Civil Application No. Nai. 92 of 1992, where it was held that there is considerable merit in the submission that where there is a clear procedure for redress of any particular grievance prescribed by the Constitution or an Act of Parliament, that procedure should be strictly followed. Accordingly, the special procedure provided by any law must be strictly adhered to since there are good reasons for such special procedures.
46. In this case, the applicant properly made a request for review to the 2^nd Respondent. Having done so, it cannot return to the decision of the 1^st Respondent. The only competent decision which the Applicant can question in these proceedings is the decision of the 2^nd Respondent.
47. In its decision, the 2^nd Respondent only dealt with the request for review of the decision contained in the letter dated 18^th October, 2013. With respect to the letter dated 30^th October, 2013, which is the letter that terminated the contract, the Board found that no request to review the same was made before it. I have found elsewhere in this judgement that there is no evidence that pursuant to the request for review, the 2^nd Respondent notified the 1^st Respondent of the suspension of the procurement proceedings before the 1^st Respondent terminated the contract. Without that evidence there was nothing stopping the applicant from resorting to the provisions in section 36(1) and since Section 63(3) of the Act emphasizes that no contract is formed between the person submitting the successful tender and the procuring entity until the written contract is entered into.
48. With respect to legitimate expectation, the legal position is that the same cannot override the law. This was the position in Republic vs. Kenya Revenue Authority ex parte Aberdare Freight Services Limited [2004] 2 KLR 530 where it was held:

“…a public authority may not vary the scope of its statutory powers and duties as a result of its own errors or the conduct of others. Judicial resort to estoppel in these circumstances may prejudice the interests of third parties. Purported authorisation, waiver, acquiescence and delay do not preclude a public body from reasserting its legal rights or powers against another party if it has no power to sanction the conduct in question or to endow that party with the legal right or inventory that he claims… Legitimate expectation is founded upon a basic principle of fairness that legitimate expectation ought not be thwarted – that in judging a case a judge should achieve justice, weigh the relative “strength of expectation” of the parties. For a legitimate expectation to arise the decision must affect the other person by depriving him of some benefit or advantage which either (i) he had in the past been permitted by the decision maker to enjoy and which he can legitimately expect to be permitted to continue to do until there has been communicated to him some rational grounds for withdrawing it on which he has been given an opportunity to comment or (ii) he has received assurance from the decision maker not to be withdrawn without giving him first an opportunity of advancing reasons for contending that they should be withdrawn… A representation giving rise to legitimate expectation must however be based on full disclosure by the applicant. Thus where he does not put all his cards face up on the table it would not be entitled to rely on the representation. In this case any legitimate expectation has clearly been taken away firstly by the conduct of the applicant and the provisions of the Statute Act and therefore there is no discretion.”  

49. It ought to be noted that in judicial review proceedings as opposed to an appeal the Court is not entitled to re-evaluate the evidence presented with a view to arriving at its own decision.  As was held in Municipal Council of Mombasa vs. Republic & Umoja Consultants Ltd Civil Appeal No. 185 of 2001:

“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.”

50. Sufficiency of evidence must however be distinguished from lack of evidence at all. A decision made without any evidence at all rather than insufficiency of evidence may well be irrational and would invite a remedy in judicial review. In its decision, the 2^nd Respondent made a finding of fact to the effect that the financial evaluation perused by it confirmed the contention that the Procuring Entity that there was a gross exaggeration of price of items hence the only logical way that a 106% excess in the cost of the project can be explained and that it did not require rocket science in view of the evidence before it to establish that the financial proposal was way above the intended contract value. This was a finding of fact based on the evidence that was before the 2^nd Respondent. Whereas such a finding could well be a ground for a successful appeal under section 100(2) of the Act, that may not be a basis for granting judicial review orders.
51. Before concluding this judgement I wish to comment briefly on the remedy for an order of mandamus sought in prayer (vii) (sic) of the Motion. In Kenya National Examinations Council vs. Republic Ex parte Geoffrey Gathenji Njoroge Civil Appeal No. 266 of 1996 It was held that:

“The order of mandamus is of a most extensive remedial nature, and is, in form, a command issuing from the High Court of Justice, directed to any person, corporation or inferior tribunal, requiring him or them to do some particular thing therein specified which appertains to his or their office and is in the nature of a public duty. Its purpose is to remedy the defects of justice and accordingly it will issue, to the end that justice may be done, in all cases where there is a specific legal right or no specific legal remedy for enforcing that right; and it may issue in cases where, although there is an alternative legal remedy, yet that mode of redress is less convenient, beneficial and effectual. The order must command no more than the party against whom the application is legally bound to perform. Where a general duty is imposed, a mandamus cannot require it to be done at once. Where a statute, which imposes a duty, leaves discretion as to the mode of performing the duty in the hands of the party on whom the obligation is laid, a mandamus cannot command the duty in question to be carried out in a specific way… These principles mean that an order of mandamus compel the performance of a public duty which is imposed on a person or body of persons by a statute and where that person or body of persons has failed to perform the duty to the detriment of a party who has a legal right to expect the duty to be performed.”

52. Section 84(1) of the Act provides as follows:

The procuring entity may negotiate with the person who submitted the successful proposal and may request and permit changes, subject to section 85 (2).

53. First and foremost the said provision only comes to play where there is a successful proposal and not otherwise. Secondly, the said provision is discretionary. It follows that even if this Court was inclined to grant the order of mandamus it would only go to the extent of compelling the 1^st Respondent to carry out the financial valuation but would not compel it to enter into negotiations in terms of section 84 of the Act.
54. Having considered the issues raised in this application the inescapable conclusion I come to is that the Notice of Motion dated 21^st January 2014 is unmerited.

Order

55. In the result the said application fails and is dismissed with costs to the Respondents.

Dated at Nairobi this 2^nd day of July 2014

G V ODUNGA

JUDGE

Delivered in the presence of:

Mr Wilson for Mr Kihara for the Applicant

Mr Bitta for Respondents

Cc Kevin