Republic v Public Procurement Administrative Review Board & another; Managing Director, Ruiru-Juja Water and Sewerage Company Ltd & another (Exparte) (Miscellaneous Civil Application E130 of 2022) [2022] KEHC 16432 (KLR) (Judicial Review) (15 December 2022) (Judgment)
Neutral citation:
[2022] KEHC 16432 (KLR)
Republic of Kenya
Miscellaneous Civil Application E130 of 2022
AK Ndung'u, J
December 15, 2022
Between
Republic
Applicant
and
Public Procurement Administrative Review Board
1st Respondent
Babs Security Services Limited
2nd Respondent
and
Managing Director, Ruiru-Juja Water and Sewerage Company Ltd
Exparte
Canon Security Services Kenya Limited
Exparte
Judgment
1.Pursuant to leave of this court to institute judicial review proceedings granted on November 7, 2022, the Applicants by way of a Notice of Motion dated November 10, 2022 sought for orders:a.That an order of certiorari to quash the proceedings Public Procurement Review Board Review Application No 85 of 2022 In Regard to Tender Rujwasco/T/86/2022-2023/24 For Provision of Physical Security Services at Various Rujwasco Stations.b.That any other order that this Honourable Court will be pleased to issue in the circumstances.c.That costs be provided for.
2.The Applicants sought to quash the 1st Respondents decision of October 21, 2022, made in PPARB Application No 85 of 2022, nullifying and setting aside: letters of notification of award of tender, letters of notification of regret of tender, and contract agreement. They also challenge the requirement in the decision that the 1st ex parte Applicant to ensure that the procurement process with respect to tender number Rujwasco/T/86/2022-2023/24 For Provision of Physical Security Services at Various Rujwasco Stations proceeds to its logical conclusion within 14 days from the date of the Ruling.
3.The 1st ex-parte Applicant through a publication in the Daily Nation newspaper dated August 24, 2022, advertised a tender for provision of security services at various Rujuwasco stations, Tender No Rujuwasco/T/86/22-23/24.
4.On evaluation by the tender committee, the 2nd ex parte Applicant (Canon Security), having been the lowest responsive bidder at Kenya Shillings Fifteen Million, Seven Hundred and Forty-Three Thousand, Five Hundred and Twenty (Kshs 15,743,520) for 2 years, was recommended for consideration for the award of the tender.
5.Aggrieved by that decision, the 2nd Respondent (Babs Security) filed PPARB Application No 85 of 2022 dated September 29, 2022 and filed on September 30, 2022. The Application for Review was premised on the allegations that the Canon presented falsified documents during the procurement process; and that the 1st ex-parte Applicant the MD) failed to verify documents submitted by the tenderers. The Board made their decision dated October 21, 2022, deciding that:i.The letter of Notification of Award of Tender No Rujwasco/T /86/2022-2023/24 for Provision of Physical Security Services at Various RUJWASCO Stations dated September 14, 2022 issued by the 1st Respondent to the 2nd Respondent be and is hereby nullified and set aside.ii.The letters of Notification of Regret of Tender No Rujwasco/T/86/2022-2023/24 for Provision of Physical Security Services at Various Rujwasco Stations dated September 14, 2022 issued by the 1st Respondent to the Applicant and other unsuccessful tenderers be and are hereby nullified and set aside.iii.The Contract Agreement for No Rujwasco /T /86/20222023/ 24 for Tender No RUJWASCO/T/86/2022-2023/24 for Provision of Physical Security Services at Various Rujwasco Stations signed between the 1st Respondent and the 2nd Respondent and dated September 29, 2022 be and is hereby nullified and set aside.iv.The 1st Respondent is hereby ordered to proceed the procurement process of Tender No Rujwasco/T/86/2022-2023/24 for Provision of Physical Security Services at Various Rujwasco Stations to its logical conclusion and in strict compliance with the provisions of the Tender Document, the Act, and the Constitution within fourteen (14) days from the date of this decision, taking into consideration the Board's findings in this review.v.Given that the procurement process is not complete each party shall bear its own costs in the Request for Review.
Applicant’s Case
6.It was the Applicants’ case that the Board in its decision to nullify/set aside the award of the tender was on account that the ex parte Applicant submitted an expired license from the Communications Authority of Kenya.
7.That the issue of the license being expired was never raised in the Application for Review, and hence the ex parte Applicants was not accorded an opportunity to respond to it. That this consideration was against the rules of natural justice; thus the Applicants’ right to fair administration actions were infringed upon. The Applicant maintained that such proceedings and decision by the Board ought to be quashed.
8.Further, that the public procurement board assisted the 2nd Respondent’s case by bring up the issue of falsification of documents, hence exceeded their jurisdiction on an issue that was not before them, for determination in the application for Review. That the 2nd Respondent had not pleaded the same in their pleadings; hence the ex parte Applicants did not respond to that issue, in their memorandum of response.
Respondents’ Case
9.The Respondents opposed the Application with the 1st Respondent filing a Replying Affidavit dated November 11, 2022 and sworn by James Kilaka, it’s Acting Secretary; while the 2nd Respondent filed a Replying Affidavit dated November 18, 2022 and sworn by Isaac Macharia, its Managing Director.
10.It was the 1st Respondents case that the Board, in determining whether the Canon’s tender satisfied Mandatory Requirements 8, 12, 13, and 19 of Stage 1; and Mandatory Technical Specification 1 of Stage 2; observed from the Evaluation Report and Canon’s original tender that the Canon provided a certified copy of a license that had expired on June 30, 2022 as at the time of the subject tender's submission deadline of September 8, 2022 contrary to Mandatory Requirement No 19 Stage 1: Compliance with Mandatory/Preliminary requirements of Section III- Evaluation and Qualification Criteria of the Tender Document.
11.The 1st Respondent averred that from its analysis, the Board noted that the Canon provided evidence required to satisfy all the criteria that the Babs had alleged it failed to satisfy, save for Mandatory Requirement No 19 Stage I: Compliance with Mandatory/Preliminary requirements of Section III Evaluation and Qualification Criteria of the Tender Document, in which valid licenses from Communications Authority of Kenya were required. The Board found that Canon provided an expired license. That as such, Canon’s tender was non-responsive for having failed to meet the said requirement and should neither have proceeded for evaluation at the Technical Evaluation stage, nor the Financial Evaluation stage.
12.That the Board in determining whether the Procuring Entity breached Section 83 of the Act read with Regulation 80 of Regulations 2020, Clause 3.1 and 39 of the Tender Document, by failing to confirm and verify the qualifications submitted by the Canon in response to Mandatory Requirements 8, 12, 13, and 19 of Stage 1: Compliance with Mandatory/Preliminary Requirements of Section III- Evaluation and Qualification Criteria, and Mandatory Technical Specification 1 of Stage 2: Mandatory Technical Specifications of Section III- Evaluation and Qualification Criteria, observed that the Applicant did not provide the provisions of the Tender Document that required a due diligence exercise to be conducted to confirm and verify the qualifications of the tenderer who submitted the lowest evaluated responsive tender, and found that the Procuring Entity did not breach Section 83 of the Act.
13.That in view of the above, Bab’s Request for Review succeeded and the Board nullified the award of the subject tender to Canon, and directed the Procurement Entity to complete the procurement process of the subject tender to its logical conclusion in accordance with the provisions of the Act and the Constitution.
14.The 1st Respondent averred that in response to the allegation that the issue of the license being expired was never raised in the Request for Review Application and that Canon did not have an opportunity to respond to it thus infringing its right of fair administrative action, the Board considered in detail the allegations by Babs in the Request for Review that fake documents and/or false information in respect of Mandatory Requirements 8, 12, 13, 19 and Stage 2: Mandatory Technical Specifications No. 1 of the Tender Document were given.
15.On their part, Babs case was that in exercise of their right to fair administrative action, and the right to a fair hearing, the ex parte Applicants replied to the Request for Review, and annexed Licence No 2008088 which clearly indicated that it had expired on June 30, 2022. That the 1st Respondent duly considered the annexed license and correctly found that the 2nd ex parte Applicant's VHF licence was not valid as it had expired on June 30, 2022.
16.That at Order 4 of the Board’s decision, the 1st Respondent ordered the 1st ex parte Applicant herein to proceed with the procurement process and not to review Canon’s tender. It is urged that the ex parte Applicants have not met the legal threshold for the award of the discretionary order of certiorari.
Applicant’s Submissions
17.In support of their case, the ex parte Applicants in their written submissions dated November 23, 2022, posited that the purpose of Judicial Review was set out in the case of Municipal Council of Mombasa Vs Republic, Umoja Consultants Ltd, Nairobi Civil Appeal No 185 of 2007(2002) eKLR; and as to what Judicial Review Orders entails was elaborated in the case of Kenya National Examination Council Vs Republic Ex parte Geoffrey Gathenji & 9 Others, Nairobi Civil Appeal No 266 of 1996.
18.The Applicants averred that the allegation of falsification of documents was a fraud allegation on the part of the 2nd ex-parte Applicant. That it is trite law, each party to a suit is bound by its own pleadings and accordingly, the 2nd Respondent was bound by Order 2 Rules 3,4, 5 and 6 of the Civil Procedure Rules. That the ex parte Applicants were prejudiced and denied a proper opportunity to address the new and different issue of the alleged expired Communication Authority of Kenya license which was not pleaded but metamorphosed into. The Applicant maintained that pleadings have an importance. The cases of Independent Boundaries Commission and Another v Stephen Mutinda Mule and 3 Others [2014] eKLR, and Raila Amolo Odinga & another v Independent Electoral and Boundaries Commission & 2 others [2017] eKLR were relied on.
19.Additionally, the Applicants submitted that the 2nd Respondent had sought the suit be struck out on the ground that the 1st ex parte Applicant did not comply with the provisions of Order 4 Rule 1(4) of the Civil Procedure Rules 2010 - to the extent that no resolution was filed authorizing Simon Mwangi to swear the verifying affidavit.
20.The Applicants conceded that, being a corporate body, they were bound by the provisions of Order 4 Rule (1) of the Civil Procedure Rules; and maintained that the position of the law is that such a resolution, by the Board of Directors of a company, may be filed any time before the suit is fixed for hearing, as there is no requirement that the same be filed at the same time as the suit. That its absence, is therefore, not fatal to the suit. That the ex parte Applicant filed the same vide its Further Affidavit dated November 24, 2022. Reliance was placed on the cases of Leo Investments Ltd v Trident Insurance Company Ltd (2014) eKLR, Republic vs Registrar General and 13 Others Misc Application No 67 of 2005 eKLR, Spire Bank Limited v Land Registrar & 2 others [2019] eKLR, and Assia Pharmaceuticals vs Nairobi Veterinary Centre Ltd. Nairobi (Milimani) HCCC No 391 of 2000.
21.On the issue of cost, the Applicants submitted that Section 27 of the Civil Procedure Act guides the court as to costs. That costs follow the event, and that in this case, the Applicants having proven their case against the Respondents, are entitled to have the costs of this application. The cases of John Kiragu Kimani v Rural Electrification Authority [2018] eKLR, and Republic vs Rosemary Wairimu Munene, Ex-Parte Applicant Vs Ihurur Dairy Farmers Co-operative Society Ltd were relied on.
Respondents’ Submissions
22.The 1st Respondent, in their written submissions dated November 22, 2022, submitted that jurisdiction is everything and without it, a court or a tribunal has no power to make any step and relied on the case of The Owners of the Motor Vessel Lillian S Vs Caltex Oil (Kenya) Ltd (1989) KLR. That Section 28 of the Public Procurement and Assets Disposal Act provides for the functions of the Review Board. That the jurisdiction of the Review Board with regards to the subject dispute flows from Section 167(1) of the Act, to which the Board is a specialized, central independent procurement appeal review board with the jurisdiction to review, hear, and determine tendering and asset disposal disputes.
23.It was also their submission that the ex-parte Applicants’ motion is essentially a review of the merits of the decision of the 1st Respondent, though framed as a judicial review application. That it is seeking to improperly invoke an appellate jurisdiction of the High Court. That even where this Honourable Court is minded to review the merits of the 1st Respondent’s decision, it is the 1st Respondents’ submission that a consideration of the merits of its decision will only serve to sustain the Board’s findings. That Section 173 of the Public Procurement and Disposal Act, 2015 provides for the powers of the Review Board.
24.The 1st Respondent maintained that the Review Board in granting the orders as did remain faithful to its powers and mandate and did not divert from the same contrary to what is alleged by the Applicant. That, therefore, this being a judicial review case, and not an appeal, this court is not empowered to venture into correcting the decision of the Review Board on the merits. That the criteria for issuance of the orders include: illegality, impropriety of procedure, and irrationality; was well stated in the cases of Re Bivac International SA (Bureau Veritas) (2005) 2 EA 43, and Pastoli vs Kabale District Local Government Council and Others [2008] 2 EA 300.
25.It was the 1st Respondent’s submission that the Board, in delivering its decision, followed the principles of natural justice; that the Review board informed each and every tenderer in the subject tender of the existence of the request for review, and also invited them to submit to the board any information and arguments about the tender. The court was urged to find guidance in the Court of Appeal cases of Municipal Council of Mombasa V Republic & Another (2002) eKLR, and Republic Vs Kenya Power & Lighting Company Limited & Another [2013] eKLR.
26.The 1st Respondent submitted that the Applicants are not entitled to the order of certiorari sought. That in order for an Applicant to move the Court into giving orders on the ground that a tribunal has committed an error of law, the Applicant must demonstrate that there is indeed a mistake that goes to the jurisdiction of the tribunal. Republic v Kenya Revenue Authority & Another Ex-Parte Bear Africa (K) Limited; Republic v Commissioner of Customs Services ex-parte Africa K-Link International Limited Nairobi HC Misc JR No 157 of 2012[2012] eKLR; and Kenya Pipeline Company Limited V Hyosung Ebara Company Limited & 2 Others (2012) eKLR cases were relied upon.
27.Also, in opposing the Application, in a written submissions dated November 28, 2022, the 2nd Respondent contended that to qualify for the relief of certiorari sought, the ex-parte Applicants needed to demonstrate by cogent evidence that the 1st Respondent treated them unfairly in terms of Article 47(1) of the Constitution of Kenya, 2010; and comply with Order 53 Rule 1(2)(a) of the Civil Procedure Rules, 2010. That in this case, the ex parte Applicants did not specify any of the said grounds of judicial review applications. Relied on Chief Constable of North Wales Police v Evans (1982) 3 ALL ER and Pastoli v Kabale District Local Government Canal & Others (2008) 2EA 300 cases.
28.The 2nd Respondent further submitted that the ex parte Applicants did not provide any evidence to demonstrate that the 1st Respondent lacked jurisdiction to entertain the Request for Review, or that it committed an error of law. Reliance was placed on the case of Kenya Pipeline Company Limited v Hyosung Ebara Company Limited & 2 others [2012] eKLR.
29.The 2nd Respondent position is that it was not disputed that the Tender Document was issued in August 2022, and that the tender closed on September 8, 2022. That the 2nd ex parte Applicant attached in its tender response, Licence No 2008088 issued by the Communication Authority of Kenya (CAK), and that it was not disputed that the said licence had expired on June 30, 2022.
30.That, without prejudice to the foregoing, in view of Section 173 of the Public Procurement and Asset Disposal Act 2015, and Regulation 205(3) of the Public Procurement and Asset Disposal Regulations 2020, the 1st Respondent had the power to go beyond the pleadings of the parties and examine the tender records to ensure that the 1st ex parte Applicant treated tenderers fairly. That the 1st ex parte Applicant’s tender did not satisfy Preliminary/Mandatory Requirements/Evaluation Criteria No 19 The case of Republic v Public Procurement Administrative Review Board & another Ex-parte Uto Creations Studio Limited [2013] eKLR relied on.
31.Further, the 2nd Respondent posited that the 1st ex parte Applicant’s Tender Evaluation Committee had no reason to make the error, as Section 46(7) of the Public Procurement and Asset Disposal Act, 2015 allows the evaluation committee to invite external technical experts to assist in conducting their functions. Also, that errors in the examination of Tenders, would have been corrected before the signing of the Evaluation Report and issuance of the Professional Opinion; as envisaged under Regulation 31 of the Public Procurement and Asset Disposal Regulations, 2020. That it ought to have occurred to the 1st ex parte Applicant that the tender evaluation was unfair, as the procedure was unlawful, and the professional opinion therefore incompetent, unsound, and negligent.
32.To the 2nd Respondent, the ex parte Applicants failed to prove that the 1st Respondent’s decision making process was tainted with illegality, irrationality, and procedural impropriety. That there is therefore, no justification for an award of a judicial review order of certiorari as sought by the ex parte Applicants.
33.On costs, the 2nd Respondent posited that costs are awarded to compensate the successful party for the trouble taken in prosecuting or defending the suit. That Section 27(1) of the Civil Procedure Act, provides that costs follow the event. The case of Cecilia Karuru Ngayu v Barclays Bank of Kenya & another [2016] eKLR was relied on.
34.I have considered the application, the responses and learned submissions by counsel. Of determination is whether the applicant has established the legal threshold for the grant of the judicial review orders sought.
35.In the case of Municipal Council of Mombasa Vs Republic & Umoja Consultants Ltd (2002) eKLR, the Court of Appeal held that: -
36.The court must therefore defer to the Boards mandate to make decisions on merit in review of public procurement processes. By dint of section 175 of the Public Procurement and Asset Disposal Act, this court’s jurisdiction in so far as decisions of the Board are concerned, and as rightly invoked by the ex parte applicants, is in judicial review. It is not appellate and the court must therefore not delve in merit review of the Board’s decision.
37.The gravamen of the Applicants claim herein is that the Board based its decision on a finding that the 2nd ex parte Applicant had failed to satisfy the Mandatory Requirement No 19 Stage I: Compliance with Mandatory/Preliminary requirements of Section III Evaluation and Qualification Criteria of the Tender Document in which valid licenses from Communications Authority of Kenya were required. The Board found that Canon provided an expired license. That as such, Canon’s tender was non-responsive for having failed to meet the said requirement and should neither have proceeded for evaluation at the Technical Evaluation stage, nor the Financial Evaluation stage.
38.The Applicants contention is that the 2nd applicant was not accorded a chance to respond to this allegation as it was not a matter raised by the applicant in the request for review. In my considered view, nothing stops the Board to, at the Request for Review stage, raise an issue even suo moto to ensure that any public procurement conforms to the principles set in Article 227 of the Constitution and the guiding principles provided for under section 3 of the Act. Any failure to do so by the Board would be tantamount to abdication of the solemn duty and mandate bestowed on it. The Board , as it were, is the only institution mandated by law to review the merit of procurement processes. It is a specialised body purposely selected for that purpose. It cannot be faulted for finding, on the basis of cogent evidence, impropriety in a procurement process.
39.I hasten to add that whereas the Board as a specialised body mandated to review tender processes and which has immense powers donated by section 173 of the Act to review all aspects of a tender, in instances where an issue arises that is adverse to a party in the proceedings, such a party must be given the leeway to respond to the issue.
40.In the instant case, there is no evidence that the 2nd ex parte applicant was accorded to an opportunity before the Board to respond to the question on the validity of its Communication Authority’s licence. The right to be heard is paramount and any decision reached without affording a party the right to be heard cannot stand legal muster. In Onyango Oloo vs Attorney General [1986-1989] EA 456 the court stated;
41.Similarly, in Pashito Holdings Ltd & Another vs Paul Nderitu Ndung’u & Others the Court of Appeal expressed itself as follows:
42.Even where the court raises an issue suo moto in a proceeding, the parties affected by such issue must have their say. This, notwithstanding how obvious in the eyes of the court the issue would be. Case law abounds in this regard. Mwera, J (as he then was) in Nagendra Saxena vs Miwani Sugar Company (1989) Limited (Under Receivership) Kisumu HCCC No 225 of 1993 while citing Habig Nig Bank Limited vs Nashtex International Nig Ltd Nigeria Court of Appeal Kaduna Division CA/K/13/04 and Playing God: A Critical Look At Sua Sponte Decisions By Appellate Courts By Adam M Milani and Michael R Smith, Tenessee Law Review {Vol. 69 XXX 2002, dealt with the suo moto procedure extensively as follows:
43.The issue of determining matters raised suo moto without hearing parties was also alluded to by the Court of Appeal in Nakumatt Holdings Limited vs Commissioner of Value Added Tax [2011] eKLR where the Court expressed itself as follows:
44.Having satisfied myself that the 2nd Applicant was not heard on the question of the validity of its license, it is irrelevant whether the Board would have arrived at the same decision even if it had afforded the parties an opportunity of being heard before making its decision. It must always be remembered that where a party has a right to be heard that right cannot be taken away by the mere fact that the Board considers that the said party’s contribution is unlikely to affect the decision.
45.Granted, the powers of the board are extensive allowing the Board to review confidential documents in tendering process with a view to ascertaining the propriety thereof. In exercise of the judicial review jurisdiction, this court ‘s duty is to examine the record of the Respondent and satisfy itself that in coming to its decision, the Respondent has not exposed itself to charges of illegality, irrationality and procedural impropriety.
46.As it were, the decision reached by the Board is in breach of natural justice. The same invites an order of certiorari to quash it.
47.From the foregoing and for reasons above stated, I find the application herein successful and I make the following orders;a.An order of certiorari be and is hereby issued to bring to this court and quash the decision of the Board in Public Procurement Review Board Review Application No 85 of 2022 In Regard To Tender Rujwasco/t/86/2022-2023/24 For Provision of Physical Security Services At Various Rujwasco Stations.b.An order be and is hereby made directing the 1st Respondent to re hear Public Procurement Review Board Review Application No 85 of 2022 In Regard to Tender Rujwasco/T/86/2022-2023/24 For Provision of Physical Security Services At Various Rujwasco Stations within 14 days hereof factoring in the findings in this judgement.c.Each party to bear its own costs.
DATED, SIGNED AND DELIVERED AT NAIROBI THIS 15TH DAY OF DECEMBER, 2022.A. K. NDUNGUJUDGE