Minister for Finance, Government of Kenya & 2 others v Cotecna Inspection SA & 3 others [2004] KEHC 2527 (KLR)

REPUBLIC OF KENYA

IN THE HIGH COURT OF KENYA

AT NAIROBI (NAIROBI LAW COURTS)

Misc Civ Cause (Appli) 723 of 2003

The Minister for Finance, Government of Kenya & 2 others………………..APPLICANT

Versus

Cotecna Inspection SA& 3 others………………………..…………………RESPONDENT

RULING

There are two applications  before me brought by way of Notices of Motion respectively dated the 21st and 26th August 203 and both filed on the 26th 2003 by the 1st and 2nd interested parties respectively under certificates of urgency.

The application by the first interested party (to whom I shall hereinafter refer to as “Cotecna” andto whose application I shall hereinafter refer to as “Cotecna’s application” seeks the following orders, namely THAT:-

1)          There be a stay of any further proceedings until the hearing and determination of the intended appeal from the order of 19th August 2003.

2)          The Order of stay of proceedings issued on 19th August 2003 be extended until the hearing and determination of the application herein.

3)          The costs of this application be provided for

The application by the second interested party (to whom I shall hereinafter refer to as “Bivac” and to whose application I shall hereinafter refer to as “Bivac’s application”) seeks the following orders, namely:-

1)          THAT all further proceedings herein be stayed pending the hearing and determination of the 2nd interested Party’s intended appeal against the decision and orders of Mr Justice Aganyanya delivered on 19th August 2003.

2)          THAT the costs of, and occasioned by, this Application be provided for.

As the Cotecna and Bivac applications are both brought under order 41 rule 4 of the Civil Procedure Rules and  /or the inherent jurisdiction /power of the Court and seek orders which are not dissimilar, the applications were both heard together with the consent of the parties and I shall accordingly deal with both applications in this ruling.

The Cotecna application relies on the four grounds set forth therein and is supported by the affidavit of Bosco Kangeri Karingithi made on the 26th August 2003 annexed thereto while the Bivac application is founded on the eight grounds stated therein supported by the affidavit of Arun Kakad also made on the 26th August 2003 annexed thereto.

Both the Cotecna and Bivac applications are opposed by the Respondent, Intertek Testing Services International Ltd. (the applicant in the pending proceedings for judicial review and to whom I shall hereinafter refer to as “Intertek”) upon the five grounds set out in the Notice of Intention to Oppose dated the 16th September 2003 and filed on the 17th September 2003.

I do not find it necessary in this ruling to repeat the facts and circumstances leading to the Cotecna and Bivac applications as the same are well expounded in the said affidavit of Bosco Karingithi made on the 26th August 2003 as well as in the said affidavit of Arun Kakad also made on the 26th August 2003. Intertek has not responded to these affidavits.

In his submissions, and in addition to arguing the other grounds of Cotecna’s application, Mr Kiragu Kimani for Cotecna urged me to invoke the inherent powers of the Court by staying any further proceedings herein pending the hearing and determination of Cotecna’s appeal (which has since the filing the Cotecna’s application been duly filed as Civil Appeal Number 265 of 2003 ) against the ruling of Anganyanya, J dated the 19th August 2003. Mr Kimani contended that Cotecna was not given any opportunity whatsoever to be heard on the merits of its Notice of Motiondated the 15th July 2003 seeking an order to set aside the ex-parte order of Nyamu J dated the 3rd July 2003 granting leave to Intertek to apply for judicial review by way of certiorari, prohibition and mandamus and that this notwithstanding, the learned Judge proceeded to dismiss such Notice of Motion contrary not only to the provisions of Section 25 of the Civil Procedure Act but also to the rules of natural justice. In support of Cotecna’s application, Mr Kimani referred me to several decisions of the Court of Appeal including Geoffrey Orao Obura v Martha Karambu Koome (Civil Application Number NAI 258 of 1998 (101/98 UR) ) (unreported).

Mr Bill Inamdar, for Bivac, in association himself with and adopting the submissions advanced on behalf of Cotecna made submissions in answer to the several grounds of opposition of Intertek and further argued that Intertek, in making the ex-parte application leading to the said order dated the 3rd July 2003 granted by Nyamu, J had not only made deliberate misrepresentations to the Court but had also failed to made a full and frank disclosure of material facts and that had such misrepresentations not been made and the full facts been brought to the attention of the Court, Nyamu, J would probably have decided differently and may well have not granted such leave. It is principally for this reason that Bivac had urged Aganyanya, J on the 24th and 29th July 2003 that its application dated the 21st July 2003 could only properly heard by Nyamu, J as he only could determine whether or not the alleged misrepresentations and non disclosure of material facts had affected his order of the 3rd July 2003. Mr Inamdar also cited several authorities to support his arguments including Njuguna v Minister for Agriculture [2002] 1 E A 184.

The Honourable the Attorney General (represented by Miss Muthoni Kimani) for the first, second and third Respondents in the pending proceedings for judicial review associated himself fully with and supported the submissions of Messrs Kimani and Inamdar respectively and urged that as Cotecna and Bivac have arguable appeals, such appeal should be heard and determined before proceeding with Intertek’s substantive application for judicial review.

Mr Alibhai, for Intetek, opposed both the Cotecna and Bivac applications on the grounds set out in the Said Notice Notice of intention to Oppose dated the 16th September 2003 arguing that such applications cannot properly be brought under the provisions of rule 4 of Order 41 aforesaid which specifically relate to stay of execution. Differing from the positions adopted by both Cotecna  and Bivac, Mr Alibhai maintained that Aganyanya, J had given the applicants every opportunity to be heard on their respective Notices of Motion but that the learned Judge had expressed the view that the issues raised by both such applicants be dealt with at the hearing of Intertek’s substantive application for judicial review and that the applicants stood to suffer no prejudice in following this course of action. Intertek further contended that if a stay is granted pending the applicants’ intended appeals, Intertek will have been denied its fundamental right to be heard on the application for judicial review which would, in any event, be rendered nugatory by effluxion of time as the public procurement contract the subject thereof may have expired by the time the applicants’ appeals are heard and determined. Mr Alibhai, too, cited various authorities in support of these and the other grounds of opposition, including Halsbury’s Laws of England Vol 37 4th Ed Paras 437 – 442 and Brinks – MAT Ltd v Elcombe and Others [1983] 3 All ER 188.

I have considered both the Cotecna’s and Biva’s applications in conjunction with the respective submissions of all Counsel and the legal authorities to which they have respectively referred me. In doing so, I am particularly conscious that I must not in this ruling usurp the functions of the judge before whom the substantive application for judicial review will be brought nor that of the Court of Appeal in adjudicating upon the appeals of the Cotecna and Bivac against the said ruling of Aganyanya, J dated the 19th August 2003.

Firstly, and for the reasons advanced by learned Counsel for Intertek, I would respectively agree that the applications before me cannot properly be brought under the provisions of Order 41 rule 4 of the Civil Procedure Rules but rather under the inherent power / jurisdiction of this Court; and I so rule.

Having read the said ruling of AganyanyaJ dated the 19th Augusst 2003, it is apparent on the face of it at page 8 that:

‘Counsel for both parties appeared before this Court on 24th July 2003 to either urge and /or oppose the application but were advised to submit as to why this matter should be sent back to Judge Nyamu for his consideration.” (emphasis mine).

Later, at page 12 of his ruling, the learned Judge goes on to say that:

“In my view the application to set aside the order for leave is based on the assumption that Honourable Judge Nyamu who heard it did not go through the record placed before him to get grips of the contents thereof before making such order. I am not sure this is the correct position….”

And refused to send back the file to Nyamu J for review of his ex-parte order dated the 3rd July 2003. As to the fate of both Cotecna’s and Bivac’s applications, the learned Judge further ruled that:

“And my refusal to send the file back to Judge Nyamu simply  means that the arguments put forwards do not support setting aside order of leave hence the applications fail”.

As earlier observed, Cotecna and Bivac both contend that contrary to the principle restated in Geoffrey Orao Obura v Martha Karambu Koome (supra), they were both not given any opportunity to be heard on their applications respectively dated the  15th and 21st July 2003 and further that Aganyanya J exceeded his jurisdiction in proceeding to determine issues not properly before him relating to the said ex-parte order for leave granted on the 3rdJuly 2003 which only Nyamu J could determine: Njuguna v Minister for Agricultre (supra) and Aga Khan Education Service Kenya v Republic Through Ali Seif and Three others (Civil Appeal No 257 of 2003) (unreported). Bivac further argued that this was particularly so in light of the alleged misrepresentations and non disclosure of material facts by Intertek at the ex-parte hearing before Nyamu,J: Uhuru Highway Development Ltd v Central Bank of Kenya and Two Others (Civil Appeal No 126 of 1995 (unreported)) following the pinciple in R v Kensington Income Tax Commissioner Ex-parte Princess Edmondde Polignac [1917] 1 KB 486.

In my judgment, Cotecna and Bivac ought first to be heard on their respective appeals to determine whether or not their fundamental right of natural justice to be heard was violated: Prime Salt Works Ltd v Kenya Industrial Plastics Ltd [2001] 2 E A 528 as otherwise , such appeals may be rendered nugatory as in the event that it is determined that Cotecna and Bivac were, in fact, not heard on their said Notices of Motion, then they would be entitled, as a matter of right, to have the said ruling of Aganyanya, J set aside: Purshotam Ramji Kotech and Another v Narand As Ranchoddas Pau and Another (Civil Application No NAI 63 of 2003 (34/2003 UR)) (unreported).

There is also another aspect of this matter which I must address: Regulation 40(3) of the Exchequer and Audit (Public Procurement ) Regulations, 2001 provides as follows:-

“Once the procuring entity has concluded and signed a contract with the successful tenderer, a complaint against an act or omission in the process leading up to that stage shall not be entertained through administrative review.”

Given that the subject public procurement contract has been duly signed, albeit in Intertek’s opinion irregularly, it does seem to me on a balance of convenience that it would be just and equitable to grant the orders respectively sought by Cotecna and Bivac in their respective applications as in any event, any loss or damage suffered by Intertek can be appropriately addressed by an award of damages.

In arriving at these conclusions, I have also considered most carefully the principles of law enunciated in R v Secretary of State for Home Department Ex-parte Chinoy [1952] 5 Adm L Rep 457 and in Halsubury’s Laws of England Vol 37 4th Ed Paras 437 – 442 (supra) and while accepting that “stay of proceedings in a serious, grave and fundamental interruption in the right that a party has to conduct his litigation towards the trial on the basis of the substantive merits of his case” and should therefore be invoked very sparingly and only in the plainest of cases, I am nonetheless persuaded, as was Aganyany, J who granted a temporary stay pending formal application, that in the particular and somewhat peculiar circumstances of Cotecna’s and Bivac’s applications, it would be in the interest of justice to grant Cotecna and Bivac a temporary stay.

I hasten to add that I am not prepared to stay further proceedings herein pending the hearing and determination of the intended appeals of Cotecna and Bivac – whenever that will be.

Accordingly, and for the foregoing reasons, I allow both Cotecna and Bivac applications as contained in their Notices of Motion  respectively dated the 21st and 26th August 2003 and filed on the 26th August 2003 but only to the extent and intent that since both the applicants have already lodged their respective appeals in the Court of Appeal, one of which being Civil Appeal No 265 of 2003 aforesaid, has already been filed),I will and do hereby grant a stay of any and all further proceedings herein for a period of thirty (3) days from the date hereof pending the lodging of applications for stay by Cotecna and Bivac respectively in the Court of Appeal under rule 5(2)(b) of the Court of Appeal Rules.

It is so ordered and further that each of them Cotecna, Bivac and Intertek shall bear their own respective costs of the Cotecna and Bivac applications.

April 23, 2004

Kariuki, J