Autoports Freight Terminals Limited v Kenya Ports Authority [2018] KEHC 252 (KLR)

REPUBLIC OF KENYA

IN THE HIGH COURT OF KENYA

AT MOMBASA

JUDICIAL REVIEW APPLICATION NO. 7 OF 2016

AUTOPORTS FREIGHT TERMINALS LIMITED...........APPLICANT

VERSUS

KENYA PORTS AUTHORITY.........................................RESPONDENT

R U L I N G

Introduction and outline of facts

1. The dispute in this matter was ignited by a letter dated 21/1/2016 andauthored by the Respondent’s Managing Director to theexparte– applicant in which the Respondent notified theexparteapplicant as follows:-

“It has been decided that nomination of containers toyour Container Freight Station (CFS) be suspended with immediate effect”.

2. By a verifying affidavit sworn by one Hamid Salim Sadhru in support oftheexpartechamber summons seeking leave to apply for orders judicial review in the nature of certiorari, prohibition and mandamus, it is disclosed at paragraph 2, that the said letter was served upon theexparteapplicant on the 22/01/2016.

3. The application itself was lodged on the 25/01/2016 and on the same daythe file was placed before a judge who granted leave to apply which leavewas made to operate as stay of the decision and the substantive Notice of motion ordered to be filed within 21 days.

4. Indeed the Notice of Motion was filed on the 27/01/2016 after whichparties engaged each other on other interlocutory applications which overshadowed the substantive motion and the Replies thereto, till the 24/10/2016 when parties withdrew the said interlocutory applications and were granted leave to file further affidavits pertaining to the Notice of Motion for the substantive orders.

5. On the same day, the matter was by the order of the presiding judgeallocated to this court and directed to be mentioned on 6/12/2016.  When the parties appeared in court on 6/12/2016, it was once again by consent directed that the Respondent files its Replying affidavit within a limited time and both sides directed to file written submissions.

6. Pursuant to that consent, a Replying Affidavit was filed on the12/01/2017, submission by theexparteapplicant on the 20/03/2017 while those by the Respondent were filed on the 31/3/2017.  Besides the verifying affidavit filed with theexpartechamber summons theexparteapplicant did with the leave of the court file a supplementary affidavit on the 15/11/2016.  Additionally, both sides filed lists of authorities.  Those are the papers I consider relate to the application I am called upon to consider for determination.

Exparteapplicants’ case

7. As said before the trigger of the dispute is the letter dated 21/01/2016.

The exparte Applicant in summary considers the letter to be irrational, unlawful, unreasonable and discriminative in that the natural consequence of suspension was to drive out the exparte applicant from its daily business upon a legitimate expectation grounded upon an agreement christened ‘licence Agreement’.

8. It was further contended that the letter of suspension besides beingvague as to what was intended to be communicated; whether the decision making or the effect of the decision made, was also vague for failure to disclose the decision maker; was made without jurisdiction; ultra-vires the statute creating the Respondent, made in violation of the Rules of natural justice, contrary to the provisions of East African Community Customs Management Act and the terms of the licence and further  violated the exparte applicants rights to be heard, right to property as well as the Hague – Visby Rules, 1968, on nomination of cargo by the Respondent.

9. The exparte applicant sought to and did rely on the documents annexedto the verifying affidavit to prove the assertions on the Grounds and the statement of facts.  In the supplementary affidavit filed on 15/11/2016 the exparte applicant sought to bring to the attention of the court matters that had transpired since filling the Notice of Motion.  Of importance was the deposition that it became known to theexparteapplicant that the letter igniting the dispute was grounded upon a decision by the Respondents Managing Director on alleged instructions from above, as shown by an endorsement on the bill of lading No. PNSAMBAP 1634470.  That bill of lading and a letter dated 4/3/2016 by the Respondent to the Cabinet Secretary, Ministry of Transport and Infrastructure said there was a government directive not to nominate cargo to the Respondent.  Based on the two documents theexparteapplicant reiterated its position that the decisions suspending its nomination of cargo to its CFS were matter that were never lawful or legal hence arbitrary and contrary to the law and in particular the provisions of the Kenya Ports Authority Act.

Respondent’s case

10. The Respondents’ case in opposition to the application is contained in theReplying Affidavit of TURASHA J KINYANJUI, the head of litigation of the Respondent.  The Affidavit opposes the Application on several fronts among them on the basis that the facts of the case disclose a pure contractual relationship devoid of public law consideration and therefore best suited to be handled as a pure contractual dispute under private law and not made to burden the court as a public law dispute seeking to attract public law remedies.

11. The second point of attack is that by design or mistake there is aconflation of the two issues involving appointment of a transit shed and nomination of containers.  To the respondent these are two different and distinct processes.  It is contended that the licensing of a Transit Shed is done by the Commissioner of Customs under Section 12(1) of EACCMA while the nomination of cargo is by the Respondent pursuant to the powers bestowed under Section 12(2) of the Kenya Ports Authority Act.

12. The Respondents takes the stand that licensing as a Transit Shed doesnot bestow upon one an automatic right to have cargo nominated to him.  The deponent contended that pursuant to the said provisions of the Kenya Ports Authority Act, the Respondent outsourced its functions of warehousing cargo by an agreement dated 21/8/2014, between it and theexparteapplicant, and theexparteapplicant simply became an agent of the Respondent for purpose of cargo handling provided the duties were carried out in strict compliance with the terms of the license and the law applicable to cargo handling.  To the Respondent, the right to nomination is purely contractual without any statutory underpinning because an attempt to regulate same by Regulations was thwarted by a court action and as at today there are no legal require to regulate nomination, hence it falls in the domain and realm of private law and its remedies rather than public law.

13. On the merits and the allegation that the decision to suspend nominationwas contrary to law, the Respondent repeats its accusation that the exparte applicant has conflated the powers of the Kenya Revenue Authority under Section 12(1) EACCMA with that of the Respondent to nominate cargo under the license agreement and maintain that this application seeks to constitute the court into an appellate court on the decision by the Respondent.

14. On the alleged deprivation of property, as alleged, the Respondent takesthe position that the exparte has no proprietary rights over the cargo to be nominated but only upon profits derivable from such nomination which is a civil claim not suited for a judicial review application.

15. On failure to disclose the reasons for the decision and the maker thereofthe Respondent contend that the operations at the port involved various governmental agencies which work in consultation to ensure that the legal requirements are met before cargo is released from the port.  To the Respondent a supportive decision so arrived may at times require that it be made urgently and would not be lawful to be subjected to the right to be heard before being arrived at.  The Respondent takes the view and position that to require compliance with the right to be heard would curtail the operational discretion bestowed upon the Respondent by a statute.  It was then added by the Respondent that at the time there were urgency and necessity to suspend the nomination of cargo to theexparteapplicant because it had been accused of mis-declaration of cargo and was under investigation hence it was not desirable for it to be accorded a hearing before the decision to suspend its operation by nomination could be reached.

16. On the identity of the person who made the challenged decision theRespondent held the position that there is no legal requirement that the decision maker be disclosed provided it is made by an authorized officer.  On the words “hold as per instruction for above”, the Respondent maintained that such words would themselves not connote that the decision maker was unknown and that it could be known to the ultimate consumer of the instruction but not theexparteapplicant.  On the letter by then acting Managing Director, it was averred that the letter was in the first place confidential and inadmissible besides the fact that the letter was seeking further instructions on the government’s decision to suspend nomination to theexparteapplicant.

17. On the ground that the suspension had the effect of negating theexparteapplicants legitimate expectation to be getting nominations from the Respondent, it was averred and stated that the nomination was a contractually grounded without any undertaking on the contract being alive for the entire five years as the contract itself provided for termination and pegged nomination to be dependent on set grounds.  On the decision being irrational and unreasonable the short position taken is that there had not been an attempt to particularize the facts constituting irrationality and unreasonableness.

18. On the sixth ground of the application, ultra vires, the Respondentfaulted theexparteapplicant for failure to make a distinction between the Respondents statutory powers and contractual powers under the licence agreement.  Lastly on contravention of the Hague-Visby Rules 1968, the Respondent reiterated the all along held position that nomination is at the sole discretion of the Respondent as was held in Mombasa JR No. 77 of 2010.  To the Respondent, to remove that unfettered discretion would be to allow an importer and other CFS Operators to create and operate a port system outside the control of the Respondent thereby contravening section 12 of the Act.  In conclusion it is contended that the nomination of cargo is a pure administrative measure the respondent must be allowed to undertake to ensure the operation of the port are done properly and to ensure the security of the country and its people.

19. To underscore the contentions in the Replying Affidavit, the Respondentexhibited to court the licence agreement, the minimum conditions set by the commissioner of customs and Boarder Control for application to operate transit shed, pleadings filed in JR No. 5 of 2016 and 9 of 2016 as well as a decision in JR No. 77 of 2010.  On such material the respondent contends that the application is misconceived, not merited and deserve only to be dismissed.

Submissions by the exparte Applicant

20. In the written submissions dated and filed in court on the 20/3/2017, theexparteapplicant has truncated his submissions into four parts; breachof rules of natural justice,ultraviresaction by the Respondent, consideration of extraneous matters and contravention of the Hague-visby Rules, 1968.

Denial of right to be heard

21. The letter of 21/01/2016 is revisited on its tenor and words to the effect itasserts with finality that a decision to suspend nomination had been made without more.  To theexparteapplicant merely failing to afford to it the right to be heard prior to the decision being made was enough to determine the matter.  As a result a detrimental decision was made against toexparteapplicant in violation of not only the principles of natural justice but also a constitutional value and the rule of law.

Ultra vires actions by the respondent

22. Here the submissions is that the regulation of a licenced Transit Shedoperator is the preserve of the Kenya Revenue Authority and that in stopping the nomination to theexparteApplicant, the Respondent was acting outside its powers and just outstepping the mandate by purporting to do what is not bestowed upon it by the EACCMA.  The second limb of the submission on this point is that under the license agreement, the agreement could only be terminated by effluxion of time or mutually after the contractual notice has been served pursuit to the agreement and that, neither the Act nor the license agreement gave to the Respondent the power to suspend the nomination of the exparte applicant forthwith as was purportedly done.

Consideration of extraneous matters

23. On this ground the exparte applicant contends and takes the view thatevery time a public body takes into account extraneous matters before arriving at a decision it is deemed to act ultra vires as established in the celebrated case ofAssociated Provincial Pictures House Ltd vs Wednesday Corporation [1948] 1KB 223.  The basis of this accusation is the letter by the Respondents managing director dated 4/3/2016 and the endorsement upon the bill of lading showing stoppage of nomination on account of orders from above and undisclosed government directive.

The Hague Visby Rule (1968)

24. Under this ground, the exparte applicant contends that the Hague –Visibly Rules are applicable to the matter by dint of Article 2(5) and (6) of the constitution.  It is submitted without much effort that Article 3(6) of the rules govern the nomination of cargo by the Respondent and therefore were bound to be followed by the Respondent.  Those are the same grounds Mr. Buti for the Applicant highlighted to court and prayed that the application be allowed as prayed.

25. He however added orally, and on the basis of the supplementary list ofauthorities dated 3/4/2017 that all the matter submitted at paragraphs 1-38 of the Respondents’ submissions have been adjudicated upon by this court, Emukule J, in JR No. 6 of 2016 and found to have no merit hence cannot be the basis of re-litigation.  On whether or not the dispute is contractual or founded upon the Respondents public duty, Mr. Buti refereed the court to Section 5 and 12 of the KPA Act and contended that the answer lies therein.  He contended that the law bestowed upon the Respondent the duty to provide port services and in doing so never to give any undue preference to any person.  He added that the nature of public duty to be performed by virtue of the licence agreement is in the statute and capture on the recital to the licence agreement.

26. On the contention that there is no obligation to disclose the reason andthe person walking the decision, Mr. Buti referred the court to Section 7 of the Fair Administrative Action Act which dictates that a decision maker be disclosed.

27. On the confidential nature of the letter dated 4/3/2016 and the decisionscited to shield it as confidential the advocate referred the court to Article 35 and added that the decisions relied upon were made prior to the promulgation of the constitution in 2010.  Based on the pleadings, affidavits, filed submissions offered and the law cited Mr. Buti urged the court to allow the application as prayed.

Submissions by the Respondent

28. Mr. Kongere for the Respondent relied on the Replying Affidavit by Mr.Turasha Kinyanjui as well as the submissions and list of Authorities dated 31/3/2017 to oppose the application.  He offered his submissions at two levels; whether there is a public law claim capable of attracting public law remedy in judicial review and secondly if the application is merited.

29. On the preliminary question whether there exist a public law dispute tomerit a public law remedy in the nature judicial review orders being issued, Mr. Kongere maintained that the dispute before court is a contractual one and that the decision by judge Emukule in JR 6 of 2016 only dealt with the application to set aside leave granted exparte but did not deal with the merits of the dispute.  He reminded the court that the decision by Emukule J, does not bind the court hence the court ought not to feel armstrung to come to the same conclusion as that Judge did.

30. On the dispute regarding nomination of cargo, Mr. Kongere submittedthat the law recognizes and entitles the Respondent to deal with all the cargo under sections 8 & 12 of KPA Act and that merely that it opts to contract a third party to perform its statutory duties does not make the relationship between it and the third party, in this case the exparte applicant, a public duty.  He cited to court a number of decided cases includingJapan Export Vehicle Inspection Centre Co. Ltd vs Kenya Bureau Of Standards [2015] eKLR, Griffith University vs Tang [2005] HCA 7, Hansphire County Council vs Support ways Community Services Ltd [2006] EWCA Civ 1035, Municipal Council of Mombasa vs Republic, Civil Appeal No. 24 of 2001, Zakhem Construction (Kenya) Ltd vs Permanent Secretary, Ministry of Roads & Another [2007] eKLRas well asRepublic vs Mwangi S. Kimanyi, exparte Kenya institute of Public Policy and Research Analysis [2013] eKLR.

31. On the merits of the Application the first salvo was directed at the use ofexhibit of the letter dated 3/4/2016.  The Respondent submits that the letter is not available for being used as an exhibit here on two grounds;

(i) That it was a confidential communication between the respondent and the Cabinet Secretary and must have been obtained unlawfully.

(ii)It was a letter addressed to the AG as an advocate for the government and privileged from being disclosed.

32. For these two grounds the Respondent cited to court the decisions inBaseline Architects Ltd & 2 Others vs National HospitalInsurance Fund Board Management [2008] eKLRandNelson Havi & 8 Others vs Inspector General of Police and 5 Others [2016] eKLRfor the proposition that documents illegal obtained are not admissible in law.

33. On merits regarding the decision being contrary to law, amounting todeprivation of property, ultra vires, being irrational and unreasonable and giving against legitimate expectation, the Respondent faults the exparte applicant for mis-apprehending the law and convoluting facts as opposed to separating the powers to license a Transit shed and to nominate cargo for a transit shed.  On the charge of deprivation of property and denial of the right to be heard, the Respondent contend that the nomination did not deny the Applicant the use of its massive investment and on right to be heard it was contended, while rely onKenya National Examination Council vs Republic,exparteGeoffreyGathenji Njoroge,that the right to hearing is not always available and at times only available at the level of convenience and courtesy.  He added that the right to be heard ought to be safeguarded but does not apply where the issue is one of discretion to be exercised in certain urgent situations.

34. On legitimate expectation it was submitted that clause 4. 4 of the licenceagreement was explicit that the volumes were not guaranteed and that the respondent would not be in breach if it fails to nomination cargo.  On irrationality and un-reasonableness the Respondent makes submissions to the effect that an irrational and unreasonable decision must be devoid of logic and must be beyond expectation of being made by an reasonable person.  The decision of Wednesday was cited from that proposition.

35. With regard to accusation that the decision was ultravires, theRespondent takes the position that this is misconcened as it purports that suspension of nomination is aken to interfering with a license under Section 12 EACCMA.  On consideration and reliance on extraneous matters being the endorsement on the bill of lading and government directive the Respondent says the same were not the decision but just an enforcement act.

36. On alleged violation of the Hague Visby Rules 1968, the Respondentsfirm position is that those rules do not apply to Kenya because Kenya isnot a signatory to the 1968 convention but 1924 ones.  Secondly even the Article 3(6) of the 1968 Rules do not dictate that nomination of goods to a CFS is a preserve of the consignee of the goods.  The third ground is that the court did pronounce itself in Mombasa JR 77 of 2010 that only the respondent is entitled to nominate containers received at the port of Mombasa to the CFSs.  Lastly it was submitted that to say that the Respondent has no discretion in matters nomination would be to create parallel and uncontrolled port system independent of the Respondent and contrary to the provisions of Cap 391 and the licence agreement.

37. For those reasons, the Respondent contained and maintain that theapplication is not only properly conceived but also lack merits and ought to be dismissed.

Issues analysis and determination

38. Having read the papers filed and considered the oral submissions offeredand the law cited, I have come to the conclusion that the following issues isolate themselves for consideration and determination by the court:-

i) Whether the Respondent in suspending nomination to the exparte applicant was exercising a public duty.

ii) Whether the decision made by the Respondent and conveyed by the letter 21/01/2016 was validly made.

iii) What orders should be made with regard to costs.

Was the Respondent exercising a public duty when it did suspendthe nomination to the exparte applicant?

39. This application is wholly and clearly grounded on the licence agreementrelied upon by both sides in their respective affidavits.  That agreementat the recital A & B reads:-

“WHEREAS:

A.  Under the provisions of the Kenya Ports Authority Act (the KPA Act), the Authority has a duty to ensure that it provides all reasonable facilities for handling and warehousing of cargo and other goods.

B. Under the KPA Act, the Authority has power to enter into agreements with any persons for, inter alia:

(i) The performance or provision by that person of any of the services or the facilities which may be performed or provided by the Authority;

(ii) For the payment, collection or apportionment of any fares, rates, charges or other receipts arising out of the performance or the provision by that person of such services or facilities”.

40. I have underlined the words ‘a duty to ensure that it provides allreasonable facilities’, to underscore that the parties understood, while entering the agreement that there was a statutory duty upon the Respondent to perform some functions.  It was such statutory functions the Respondent was outsourcing to theexparteApplicant.  It follows that the agreement was bestowing upon theexparteapplicants the right and capacity to do what only the Respondent was by law permitted to perform.  In common parlance the Respondent was delegating its statutory functions to theexparteapplicant.  With that in mind it is not difficult to conclude that the only authority the Respondent was drawing from to enter into the agreement aforesaid was that vested upon it by the provisions of Section 12(2)(n) ii of the Kenya Ports Authority Act.

41. Indeed the relationship between the parties as created under theagreement is contractual but with clear and undoubted statutoryunderpinnings.  Granted that judicial review concerns itself withexercise of  public and or statutory duty and not always over contractual relationship, it is also an established principle of law that where the contract finds its legitimacy and existence on a statutory provision bestowing some right or duty on a public body the application of judicial review is invited and the court cannot shut its eyes and reject an application purely because it has contractual undertones and elements in its character.  This is what I learn from the decision on theCourt of Appeal in Republicvs Mwaigi S. Kaimayi,exparteKenya Institute of Public Policy and Research Analysis [2013] eKLR.  The court rendered itself as follows:-

“This is not to say that judicial review remedies cannot beavailable in contracts of employment.  There are intances when such remedies are available.  One such instance is when the contract of employment has statutory under pinnings and where there is gross and clear violation of fundamental rights”.

42. Being guided by that binding decision I am persuaded that thesubmission by the Respondent that gives a blanket bar against judicial remedies in all matters contractual cannot be said to be appropriately taken.

43. In this case and instance, I do find that in ceding its statutory functionsto theexperteapplicant, the Respondent was performing a public duty bestowed  by a statute.  Once it did so delegate its functions under the law, and in accordance thereto it was still under the law, and only under the law entitled to revisit the delegation.

44. It is the statutory dictate that allowed it to enter into the contract thatmust be interrogated to establish if granted to it the right and ability to alter, amend or terminate the same contract.  When it does that it must be seen in the wider view to perform the duty it was conceived and created to perform.  All that it does must be in line with those ethos and expectations upon public body or agency.  Some of such expectations are in the Act of Parliament creating it yet others are derivable from the constitution and both cannot be wished away.

45. I have in mind, the requirement under Section 12(3) which provide:-

“For the avoidance of doubt, it is hereby declared thatsubsection(1) and (2) relate only to the capacity of the Authority as a statutory authority and nothing in those provisions shall be construed as authorizing the disregard by the Authority of any law”.

46. I have provided the emphasis for the sole reason that in discharging itsduties, whether under section 12 or any other enabling provision the law is clear that the Respondent is not expected to disregard any law.  And the prohibition against disregard of the law is not limited to only written law but all the law includingstare decisis.  The starting point must be the constitution as thegrundnorm, then statutes followed bystare decisis.

47. The first corpus of the obligations and expectations on the authority areto be found under the constitution.  These are the values and principles that bind public officers, organs and agencies.  The values and principles under Article 10, include rule of law, social justice, good governance transparency and accountability. When such legal duties are imposed upon the state organ like the respondent, it would not matter that it is dealing towards the discharge of a contractual duty or its statutory duty.  The law is that it is bound atall times wherever it seeks to apply or interprets the constitution or any law or implements public policy[1].

48.  It ought not to be lost sight of that in entering into the licenceagreement, the Respondent relied verbatim on the provisions of Section 12 Cap 391 and zeroed down to the statutory authority to enter into agreement with any person for the provisions of services that may be performed or provided by the authority.

49. Consequently the tasks the authority was outsourcing to be performed bytheexparteapplicants were statutory tasks the authority itself was bound to perform, save for the permission granted by statute to outsource such services.  To that extent the contract or licence agreement was not just any other agreement but an agreement for the performance of a statutory duty on behalf of the Respondent.  I cannot run away from repeating that theexparteapplicant or indeed any other party in operating a CFS terminal is performing the statutory duties of the Respondent and the Respondent in entering into an agreement akin to the licence agreement is doing so in its capacity as a statutory body performing statutory duties.

50. As was aptly put by Emukule J in Republic vs Kenya Revenue Authority,expartePortside Terminal Limited:-

“In any event the respondent itself has admitted that the licenceagreement does not provide for ‘suspension’ therefore indicating that the respondent must have derived the power to suspend nomination of cargo to the experte applicant’s CFS from instruments other than the licence agreement thereby subject it to the process of judicial review”.

51. I have referred to the foregoing observations so as to assist understandthe relationship between the parties in the dispute.  I understand it to be that, in invoking its powers under the statute, the Respondent did outsource its services for purposes of being performed by theexparteapplicant.  In doing that the Respondent was clearly not enforcing or performing any prior contractual obligation with theexparteapplicant.  Rather it was simply resorting to its statutory power to outsource.  In doing so, it was performing a statutory duty and in undoing either in whole or in part it was still obligated to be operating under its statutory duties.  I say it was performing its statutory duties because if there be a duty to appoint and enter into a contract as was done by the licence agreement then there surely cannot be inability to undo that.  I hold that the power to enter into the licence agreement has inbuilt in it the power and duty to walk out of such agreement and that power is not merely contractual but statutory because without the authority to contract there would not have been the contract in the first place. I do find that the decision communicate to theexparteapplicant by the letter of 21/1/2016 was made by the Respondent courtesy of its powers under Cap 391 and was thus made in its character and identity as a public body performing public duty of handling cargo imported into the county and to that extent it was a statutory duty amenable to the court powers in judicial review.

52. For that reason I do repeat find that the objection raised by theRespondent as to the suitability of subject the dispute to judicial reviewrather than a pure contractual relationship is not well founded but otherwise mis-conceived.

53. Having so found, the next question is to determine is whether the expartehas brought itself and met the pre-requisites of grant of any of the orders sought in this application?

54. For an applicant to attract the remedies of judicial review, havingdemonstrated that the act complained about was done pursuant to public duty bestowed upon the respondent, theexparteapplicant, has to demonstrate that in reaching the decision it did reach, the respondent acted without jurisdiction, in violation of the law or rules of natural justice on that it committed the acts by considering irrelevant factors thus being irrational and unreasonable the decision must in short be shown to be bad for illegality, irrationality or procedural impropriety[2].  But in interrogating the action, this court does not venture beyond the process and cannot go to question or interrogate the merits of the decision.

With such principles in mind, how does the decision now

sought to be challenged sit?

55. It is the exparte applicants case that prior to the letter of 21/1/2016 ithad not been notified by the Respondent that it would be affected in a manner that posed the damage of affecting its investment in the facility.  The law as I understand it is that the rules of natural justice demand that before one’s rights are affected he must be given a chance to defend itself.  I understand the law, particularly after the current constitution not to give any exception at all.  It matters note that a public body exercises discretion as contended by the Respondents.

56. In his case, it is not in doubt that the exparte applicant had invested inthe facility while putting reliance on the licence agreement which was crafted to last for a period of 5 years or be terminated by issuance of the contractual notice pursuant to clause 13 of the agreement.  The level of investment is not difficult to discern from the agreement at Clause 4.  Beyond the requirement by the Respondent that theexperteapplicant provides equipment at its cost, there was also requirement by the Kenya Revenue Authority that theexparteApplicant do execute bonds in the aggregate sum of Kshs.800,000,000/=.  It is deponed in the Affidavit of SADHRU, HAMID SALIM that they did execute the bond and invested in office space and equipment worth some Kshs.2,580,000/= such assertions have not been controverted.

57. If one was to allow or subject such an investment to dissipation thenclearly one would be staring at the prospects of rendering that entire investment to be put to waste and by extension arbitrary deprivation.  In that event one cannot be faulted to say that the applicant’s rights under article 40 would have been infringed and violated.  I hold that if such a loss would flow from the act of supervision of nomination then it cannot be termed legal.  If not legal, it can only be illegal.

58. There has been advanced a strong argument that by virtue of it being adiscretionary matter on the Respondent based on its operations the rightto be heard is discretionary.  This argument is anchored on the decision in Mombasa Judicial Review Application No. 77 of 2010. Republic vs KenyaPorts Authority,exparte nassinawhere the court said that‘any hearing in that regard must fall strictly at the level of convenience andcourtesy’.  That decision by the very renowned and respected professor of law and a respected judge who is current serving in our apex court if taken in isolation of the quoted excerpt without the flow of reasoning may be understood to mean that the right to be heard is a leisurely and some abstract nortion only applicable to public bodies if the statute impose it or purely at the level of leisure and courtesy. That would be most unfair to the professor judge.

59. The judge in coming to the decision he reached, was filed withthe question of whether or not the creation of container freight stations as extension of the port was contemplated by the statute creating the employment.  In the end the judge found and held that the use of container freight stations was fortified due to fixity of the physical space at the labour facility.

60. I do not read and understand the judge to say that judicial review hasceased to be what its purpose is established to be “the duty of the HighCourt to exercise supervisory jurisdiction over the proceedings and decisions of interior courts, tribunal and other bodies of person who carry out quasi judicial functions or who are charged with the performance of public acts and duties….The purpose of the remedy of judicial review is to ensure that the individual is given fair treatment by the authority to which he has been subjected[3].

61. In the instant case, I hold the view that the right of the exparteApplicant to operate a Container Freight Station (CFS) is whollydependent upon the mere courtesy, convenience and uncontrollable whimof the Respondent.  In the context of our current dispensation, and noting that the Respondent public body, subject to the dictates of the constitution under Article 47 as read with the provisions of the fair administrative Act, its decisions must as of necessity align themselves to the law.

62. I have held hereinabove that the decision to suspend nomination to theexparteapplicant had the direct and inevitable consequence of negatingon its investments and rights to operate the CFS.  In coming to that

holding I took cognizance of the definition of an administrative actionunder section 2 of Act No. 4 of 2015 in the words that:-

“any acts, omission or decision of any person, body orauthority that affects the legal rights or interests of any person to whom such action relate”.

63. This is the more reason I hold the view that the decision in ex-parteMessina(supra) cannot be seen to shield the Respondent from the supervision by the court merely because there exist an allegation that in coming to the decision now impugned it was acting pursuant to a contractual relationship with theexparteapplicant.  To me the definition of administrative action does not differentiate whether the right or interest alleged to have been affected is contractual or otherwise provided the person making the decision or taking the act is a public body.

64. The court’s duty here is to limited, as said before, to examining whetherthe decision was reached at in accordance with the law.  I am not in doubt that the decision in this matter is subject to the dictates of Fair Administrative Act as much as the Respondent and its officers including the managing director.  Some of the obligations imposed upon a public body like the Respondent pursuant to section 4 of the Act is the duty to give reason, the right and opportunity to be heard and to be present in person or represented by an advocate.  When subjected to the facts here, it is clear to me that the decision that theexparteapplicant challenges here miserably failed to met the basic legal requirement and was to that extent contrary to the law.  If contrary to the law the same cannot pass the test of being in conformity with the constitution on basic requirements for rule of law, and need to comply with the law.

65. To that extent it cannot be debatable whether the decision passes thetest of a fair, being lawful and legal decision.  One need not consider eventhe other requirements of reasonableness when it is demonstrated that the decision did not conform to the law.

66. All these lead me to the finding that the decision of the Respondentcommunicated by the letter of 21/1/2016 was reached contrary to law and cannot be upheld, it ought to be righted and the Respondent as a public body directed to act within the law like all else.

67. This is however not to say that the respondent has been stripped of itsduty to carry out its mandate of running port services including the regulation of Container Freight Station.  That must remain its duty as the law enacted dictate and vests.  It therefore follows and should not be interpreted to mean that any person can purport to carry out port operations outside the law, and without resort to the Respondent.  What it means is that if the Respondent has a reason to believe that there is an impropriety or illegality as alleged by the respondent against theexparteapplicant or indeed any other CFS Operator, it has all the liberty to carry out its mandate but in carrying out such mandate let the law be complied with to the letter.

Disposition

a.  Having found that the letter by the respondent dated the21/01/2016 communicating the decision to suspend nomination of cargo to theexparteapplicants’ CFS was unmerited, oppressive and in violation of the plaintiffs right to a fair hearing and fair administrative action the same letter is hereby called up and quashed together with the decision it purported to convey to theexparteapplicant.

b.  Having so quashed the decision and the letter conveying it, it followsthat the conduct of the respondent is untenable in law and the court therefore issues an order of prohibition directed at the Respondent and prohibiting it from further suspension of nomination of containers to theexparteapplicants Container Freight Station on grounds other than legal, in accordance with terms of the licence agreement and in full observance and compliance with the law and the rules of natural justice.

c.   An order of mandamus is issued and directed at the Respondent as apublic body, and compelling it to perform its public duty of offering port services in accordance with the law and without arbitrariness and blatant departure from the written law rules of natural justice.

d. I award to the exparte applicant the costs of the proceedings to bepaid by the Respondent as agreed between the parties or taxed by the Deputy Registrar in the event of failure to agree.

Dated and delivered at Mombasa this 31stday of January 2018.

P.J.O. OTIENO

JUDGE

[1] Article 10(1) a, b & c, of the Constitution

[2] Pastoli vs Kebale Local Government Council & Others [2008] 2 E.A. 300

[3] Halsburys Laws of England 4th Ed. Vol. 1 (para 60)