Kenya Power & Lighting Co v Public Procurement Administrative Review Board [2022] KEHC 11688 (KLR)

Kenya Power & Lighting Co v Public Procurement Administrative Review Board (Judicial Review 45 of 2020) [2022] KEHC 11688 (KLR) (Judicial Review) (19 May 2022) (Ruling)

Neutral citation: [2022] KEHC 11688 (KLR)

Republic of Kenya

In the High Court at Nairobi (Milimani Law Courts)

Judicial Review

Judicial Review 45 of 2020

AK Ndung'u, J

May 19, 2022

Between

Kenya Power & Lighting Co

Applicant

and

Public Procurement Administrative Review Board

Respondent

Ruling

1. Pursuant to leave of court granted on February 19, 2020, Kenya Power and Lighting Company PLC (hereinafter the applicant), moved this court vide a Notice of motion dated March 2, 2020. The orders sought were as follows;i.An order of certiorari to bring before this honourable court and quash the decision of the respondent dated 5th February in Public Procurement Administrative Review Board Application No of 2020. ii.An order of prohibition restraining the respondent by itself, its agents or persons acting on its behalf from entertaining, any other/ further administrative review in respect of Tender IPC No KP1/6E 3/PT/2/19/A71 — Procurement of Design, Supply, Installation and Commissioning of Extensions of L V Single Phase Lines and Service Cables for the Last Mile Connectivity Project (EIB) (hereinafter referred to as "the Tender").iii.An order of prohibition restraining the respondent by itself, its agents or persons acting on its behalf from implementing the respondent's decision of February 5, 2020. iv.A declaration that the advertisement and Tender document issued by the Applicant in Tender WC No KP1/6E 3/PT/2/19/A71 - Procurement of Design, Supply, Installation and Commissioning of Extensions of LV Single Phase Lines and Service Cables for the Last Mile Connectivity Project (EIB) was done in conformity with the procurement laws, regulations as well as the laid down procedures and that no person's rights were violated.v.The applicant herein be at liberty to extend the closing date of the tender for appropriate periods not exceeding ninety (90) days pending the hearing and determination of this judicial review application.vi.Costs of this application be awarded to the applicant/

2. The application is premised on 26 grounds as set out on the face thereof viz;1. On February 5, 2020, the respondent rendered its decision in Public Procurement Administrative Review Board Application Number 3 of 2020 (hereinafter referred to as "the request for review") in respect of the Tender document for Tender IPC No KP1/6E.3/PT/2/19/A71 - Procurement of Design, Supply, Installation and Commissioning of Extensions of LV Single Phase Lines and Service Cables for the Last Mile Connectivity Project (EIB) (hereinafter referred to as "the tender").2. The respondent's ruling nullified and set aside the applicants tender (bidding) document. The applicant was ordered to prepare a fresh tender document within 30 days from the date of the respondent's decision taking into consideration the findings of the respondent and re-tender within 45 days from the date of the respondent's decision.3. The respondent erroneously granted itself jurisdiction to hear and determine the request for review despite the fact that the matters the subject of the request for review fall within the purview of sections 4(2)(f) and 6(1) of the Public Procurement and Asset Disposal Act, 2015 (hereinafter referred to as "the Act") and are therefore excluded from the provisions of the Act.4. The respondent assumed jurisdiction to hear and determine the dispute and thereby acted illegally.5. The respondent acted in excess of its jurisdiction, and, overreached its mandate. The decision of the respondent is in the circumstances, null and void.6. In rendering its decision, the respondent disregarded the fact that the tender is subject to the Kenya Power Distribution Last Mile Connectivity Finance Contract No 85348 between the Republic of Kenya and European Investment Bank, dated March 27, 2017 for Sixty Million Euros (hereinafter referred to as "the finance contract").7. In rendering its decision, the respondent disregarded the fact that the tender is subject to the Kenya Power Distribution Last Mile Connectivity Project Agreement No 85. 348 between the European Investment Bank and the applicant dated March 27, 2017 (hereinafter referred to as "project agreement").8. The European Investment Bank (hereinafter referred to as "the bank") is the financier of the tender. The respondent failed to consider the fact that the bank is an entity of the European Union governed by laws applicable to the European Union and not subject to the jurisdiction of the respondent.9. In rendering its decision, the respondent disregarded the fact that the tender is subject to the subsidiary grant agreement for sixty million euros between the Government of the Republic of Kenya and the applicant, dated February 4, 2019 (hereinafter referred to as "the subsidiary grant agreement"). The applicant is the implementing agency of the Government of the Republic of Kenya in respect of implementation of the tender.10. In making the orders of February 5, 2020, the respondent is directly inducing an Event of default of the finance contract and putting at real risk the attainment of the objectives of the contract.11. The respondent failed to take into account that an event of default would cancel the entire funding of Sixty Million Euros ((presently approximately Kenya Shillings Seven Billion Five Hundred and Sixty Million (1:126)). The Bank would also call for immediate payment of all monies already disbursed together with interest with no corresponding benefit to the Kenyan public. Further, it may compromise the applicants ability to secure any future funding and occasion irreparable reputational and financial damage.12. The respondent failed to take into account that the tender is subject to the finance contract and project agreement. Any disputes connected with them are subject to English law and settled through the Court of Justice of the European Union.13. The respondent failed to appreciate that the grounds upon which the request for review was founded did not fall within the ambit of the Public Procurement and Asset Disposal Act 2015, (hereinafter referred to as "the Act") having not been based upon a breach of any duty imposed on the applicant by the Act or the regulations thereunder.14. The respondent failed to take into account the fact that the project for which the tender was floated is specifically aimed at improving the living conditions of the rural Kenyan which forms a majority segment of the entire population. A frustration of the same would deny Kenya's wider population the right to social and economic development under the Constitution.15. Without prejudice to the foregoing, the respondents assumption of jurisdiction was capricious and ultra vires in that the:-1. Request for review was time-barred.2. Respondents finding that it could not determine the date when the alleged breach occurred could not give it any jurisdiction.3. fact that it was filed before the closing date of the tender could not amount to any grant of jurisdiction.16. Without prejudice to the foregoing, the respondent granted itself jurisdiction to hear and determine the request for review despite the fact that it was not filed by any valid candidate or tenderer as required by law.17. The respondent ignored relevant matters in arriving at its decision and considered irrelevant issues.18. The respondents decision of February 5, 2020 was irrational, unreasonable, illegal and amounted to abuse of its power.19. The respondent failed to take into consideration the fact that the request for review was premised upon abstract, presumptive and speculative claims that Kenyan citizen contractors would be unable to meet the financial, technical and experience requirements stipulated in the tender (bidding) document issued on December 3, 2019. 20. The respondent proceeded on erroneous interpretations and applications of the law on unbundling, preferences and reservations and thereby acted illegally.21. The interested party defined itself as an association of Kenyan citizen contractors. The respondent failed to make a distinction between the:-1. Interested party and Kenyan (local) contractors. In interchanging the two classes, the respondent wrongly applied the provisions of the law and thereby acted illegally.2. Interested party and its members, (if any). In interchanging the two, the respondent wrongly applied the provisions of law and thereby acted illegally.22. By proceeding with the orders of the Respondent, the financing for the tender would not be available thereby defeating the very purpose and intent of the tender to the great detriment of the applicant, the interested party and the Kenyan public at large. It is in the interests of justice and public that a stay of the respondent's decision be granted to preserve the matter.23. The present position of the tender is unclear given that the closing date for receipt of bids was February 11, 2020 but the procurement process stood suspended as from January 16, 2020. 24. The statutory period of 14 days before the decision of the respondent becomes final and binding expires on February 19, 2020. It is therefore extremely vital and in the interest of justice that the orders sought herein are granted as a matter of urgency.25. The applicant will suffer immense prejudice, and the application herein will be rendered otiose if the orders in the application are not granted.26. It is just and equitable to grant the orders sought.

3. Reliance is also placed on grounds set out in the statutory statement dated February 19, 2022 and in the verifying affidavit sworn by Imelda Bore.

4. The application was opposed and in a replying affidavit Henock K Kirungu, the respondent’s secretary, has in a replying affidavit defended the decision of the respondent. He urges that the decision was made after consideration of all issues raised by the parties. The question of jurisdiction was flagged out and determined. The question whether the provisions of the procuring entity’s bidding document applicable in the subject tender contravened Articles 227(1) and (2) of the constitution and the Public Procurement and Disposal Act and the regulations made thereunder was also addressed correctly and in detail. It is urged that the respondent continues to uphold procurement procedures as required by law and has promoted integrity and fairness of the procedures and processes and has not flouted any law nor acted in excess of its powers.

5. The record shows that the court gave directions at various times regarding the hearing which directions included compliance with Covid 19 protocols as the matter was filed in the period the pandemic was ravaging the country. There was a general trend of non -compliance with directions of the court among the parties, perhaps as a result of the hardships visited on operations in all sectors by the pandemic.

6. After a back and forth for months, this matter was mentioned in court on August 6, 2020 with a view to taking a Judgement date. The court reserved October 21, 2020 as the date when the judgement would be delivered electronically to the parties. As the trial judge was finalizing the judgement, the court of Appeal delivered judgement in Civil Appeal No E039 of 2021 a decision that impacted on the timelines allowed by law for disposal of matters like the one before court. Reasons were however reserved. The trial judge kept the judgement herein in abeyance to await the reasons. The reasons were eventually given and the applicant herein, after consulting with client, sought delivery of the judgement.

7. Naturally, before considering the merit or otherwise of the applicant’s case, it is necessary for this court to consider the standing of these proceedings, more specifically, the propriety of the proceedings given the provisions of section 175(3) of the Public Procurement and Asset Disposal Act and the decision by the Court of Appeal in Civil Appeal E039 of 2021.

8. Section 175 of the Public Procurement and Asset Disposal Act provides as follows;(1)A person aggrieved by a decision made by the review board may seek judicial review by the High Court within fourteen days from the date of the Review Board's decision, failure to which the decision of the Review Board shall be final and binding to both parties.(2)The application for a judicial review shall be accepted only after the aggrieved party pays a percentage of the contract value as security fee as shall be prescribed in regulations.(3)The High Court shall determine the judicial review application within forty-five days after such application.(4)A person aggrieved by the decision of the High Court may appeal to the court of Appeal within seven days of such decision and the Court of Appeal shall make a decision within forty-five days which decision shall be final.(5)If either the High Court or the court of Appeal fails to make a decision within the prescribed timeline under subsection (3) or (4), the decision of the Review Board shall be final and binding to all parties.(6)A party to the review which disobeys the decision of the Review Board or the High Court or the Court of Appeal shall be in breach of this Act and any action by such party contrary to the decision of the Review Board or the High Court or the Court of Appeal shall be null and void.(7)Where a decision of the Review Board has been quashed, the High Court shall not impose costs on either party.”

9. The wording of section 175 (3) of the Act is clear and leaves no ambiguity in the question of the timeline within which the High Court is to determine a judicial review application filed pursuant to section 175 (1) of the Act. Such a determination must be done within 45 days. In addressing the issue in Civil Appeal No E039 of 2021, Aprim Consultants v Parliamentary Service Commission and Another, the Court of Appeal stated;“Without a doubt, there are serious practical difficulties with meeting timelines set by the Act, and it may well be that given the sheer numbers of such judicial review matters that get filed before the relevant division of the High Court; the limited number of judges to handle them; and numerous other matters. Besides, as public procurement is but one of the areas in administrative law that spawns judicial review applications, the wisdom of so short a timeline may be fairly questioned. One may wonder whether a situational analysis or any other scientific, data-based research was done to determine the reality on the ground and inform the time that is practical to effectuate the legitimate desire for timelines in disposal of public procurement and disposal disputes. It would seem quite basic that before imposition of timelines sort in section 175 of the Act, there should have been a robust engagement with stakeholders, foremost of whom would be the Judiciary leadership and specifically the judges and registrars of the relevant division. We very much doubt that such engagement did occur given the patently unrealistic timelines in the provision.“That said, is it open for the High Court, no matter how reasonable its premises, to nonetheless go on and flout the timeliness or proceed as if they did not exist? Are the timelines in question such as leave the courts with degree of discretion, or they are to be construed as being inflexibility binding?“We think, with respect, that the provisions of section 175 are couched in terms that are plain and unambiguous, admitting to no interpretive wriggle room…”

10. In the instant case, the notice of motion having been filed on the March 2, 2020, the 45 days envisaged in law are long gone. The effluxion of time has taken away the court’s jurisdiction and any decision however well-reasoned would be a nullity. This court’s sentiments in Judicial Review No 46 of 2020 are relevant here. The court stated;“This matter having not been disposed of within the 45 days set in law is caught by the limitation set under the Act. This court acknowledges the herculean task placed on the parties and the court to resolve litigation on public procurement within 45 days given the meagre resources available to the court in terms of personnel, time and materials. This deficiency is not curable by flouting the law. It behoves on the parties and the court to work together closely and be innovative in ensuring the timelines are met as expanded resources or amendment to the law is awaited. The later may not ultimately be the solution given the dire need to allow public procurement proceed timeously, the very reason why the short timelines were set. The positive to this otherwise grim situation is that the court has put in place proper administrative structure and case management technique that has enabled new matters filed post the Aprim case decision be concluded in time. The few matters affected by the limitation are pre-Aprim case matters that had not been finalized. I will echo the words of this court in Judicial Review No E156 of 2021 where the court stated;‘’Without a doubt, the matter before court is a perfect example of the serious difficulties posed by the short timelines set in section 175(3) of the Act. The requirement of the law is not matched by corresponding resources given the many matters filed and the limited number of personnel. Whereas the court will do all in its power to meet the timelines as we continue doing in many of the matters, more than usual diligence is called upon from would be applicants to ensure they, with the support of the court, drive the agenda to meet the timelines set by law’’.

11. So, what is the effect of the exceeded timelines? As held by this Court in Judicial Review Application No 46 0f 2020 above, the effect of this matter having surpassed the timelines within which this court is obligated by law to conclude the same is that the court is divested of jurisdiction to entertain the matter any further. The Court of Appeal in the Aprim case (supra) put it thus;“Our reading of the Act is that the High Court was under an express duty to make its determination within the time prescribed. During such time did its jurisdiction exist, but it was a time bound jurisdiction that ran out and ceased by effluxion of time. The moment the 45 days ended, the jurisdiction also ended. Thus any judgement returned outside time would be without jurisdiction and therefore a nullity, bereft of any force of law.That legal conclusion remains irrespective of the avowed reasons, no matter how logical, sound, reasonable or persuasive they may be. No amount of policy, wisdom or practicality can invest a decision made without jurisdiction with any legal authority.’’

12. The court can only exercise jurisdiction conferred upon it by the constitution and the law. Any act done without jurisdiction is illegal. The Supreme Court in Samuel Macharia & Another v Kenya Commercial Bank Ltd & 2 others [2012]eKLR had this to say on jurisdiction of courts;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.”

13. In view of the above, this court no longer has jurisdiction in the matter. Any decision of the court either conferring rights or taking them away would be a nullity. The suit herein is dismissed. In the circumstances of this case, each party is to bear its own costs.

DATED SIGNED AND DELIVERED AT NAIROBI THIS 19TH DAY OF MAY 2022……………………………………………….A.K. NDUNGUJUDGE