Republic v Public Procurement Administrative Review Board & 2 others; Medvision Equipments (Exparte); Royale Online Limited (Interested Party) [2022] KEHC 18100 (KLR)

Republic v Public Procurement Administrative Review Board & 2 others; Medvision Equipments (Exparte); Royale Online Limited (Interested Party) (Judicial Review Application E064 of 2022) [2022] KEHC 18100 (KLR) (Judicial Review) (22 July 2022) (Judgment)

Neutral citation: [2022] KEHC 18100 (KLR)

Republic of Kenya

In the High Court at Nairobi (Milimani Law Courts)

Judicial Review

Judicial Review Application E064 of 2022

J Ngaah, J

July 22, 2022

Between

Republic

Applicant

and

Public Procurement Administrative Review Board

1st Respondent

Kenya Medical Supplies Authority

2nd Respondent

Attorney General

3rd Respondent

and

Medvision Equipments

Exparte

and

Royale Online Limited

Interested Party

Judgment

1The application before court is the applicant’s motion dated June 10, 2022 filed under Order 53 Rule 3(1) of the Civil Procedure Rules, Section 8(2) of the Law Reform Act Cap 26. The applicant seeks the following orders:1. An order of certiorari removing to this Honourable Court for the purposes of being quashed the decision of the Public Procurement Administrative Review Board made on May 25, 2022 in Application No 40/2022 May 4, 2012. 2.An order of prohibition to prohibit and restrain the second respondent from acting upon the decision made by the first respondent made on May 25, 2022 and/or signing any contract with any persons or entity other than the ex parte applicant in respect to the tender in question.3. The costs of this application be provided for.

2The application is based on the statutory statement dated June 6, 2022 and which is verified by the affidavit of one Akshay Dewan who has described himself in that affidavit as a director of the applicant company.

3The genesis of the applicant’s application is the award of tender by the 2nd respondent for supply of what was described in the tender as 'COVID-19 health products'. I will refer to it as simply 'the tender' or 'the subject tender'. The tender was by way of open international tendering method and it was advertised in the Standard Newspaper, the Public Procurement Information Portal and on the 2nd respondent’s website on January 14, 2022.

4The applicant was among the bidders but its bid was disqualified at the technical evaluation stage because it was found not to meet certain requirements in the tender document.

5Upon the award of the tender, the applicant requested for review of the tender under section 167(1) of the Public Procurement and Asset Disposal Act, 2015 (the Act). In a decision delivered by the 1st respondent on May 25, 2022, the request for review was dismissed because it did not have any merit. This is the decision that has provoked the present proceedings.

6According to the applicant, the procuring entity disqualified the applicant’s tender on the criteria that was not stated in the tender document, a fact that the 1st respondent is alleged not to have considered in its decision.

7The 1st respondent is also alleged not to have 'fully addressed the germane' issues as raised by the parties, particularly the applicant.

8Ms Terry Ramadhani, the Chief Executive Officer of the 2nd respondent swore a replying affidavit opposing the applicant’s application. She swore that on January 26, 2022 the 2nd respondent held a pre-bid conference where the prospective bidders attended. During the conference, the bidders were given opportunity to seek clarifications on any issue they had and those who sought such clarifications were answered satisfactorily.

9The tender was closed on March 10, 2022 by which time a total of 34 firms had submitted their bids. The bids were subjected to technical and financial evaluation and for the reasons given in the letter of notification dated April 19, 2022, sent to the applicant by way of email, the applicant was informed that its bid was found to be unresponsive and was therefore rejected.

10Two of the reasons given why the applicant’s bid was found non-responsive was first, that the applicant did not provide proof of WHO prequalification and, second, it did not provide a certificate of registration or marketing authorisation issued by a listed Stringent Regulatory Authority.

11By a letter dated April 20, 2022, the applicant had requested that its bid be evaluated on the basis of a certificate of approval issued by the National Institute of Occupational Safety (NIOSH) which is an American body. The 2nd respondent responded, informing the applicant that the certificate of approval by NIOSH was neither a certificate of quality nor a certificate of conformity for ‘CE marking’. It was also not a certificate of registration or marketing authorisation. Rather, it was a certificate issued by a non-Stringent Regulatory Authority which was meant for occupational usage only and further it was neither valid nor current.

12The applicant’s request to have its bid re-evaluated was based on new and foreign documents that were not submitted by the applicant in its initial bid. The request was denied by the 2nd respondent because accepting it would have unfairly affected the competitive position of other tenderers.

13On June 13, 2022, the 2nd respondent entered into a valid contract with the winning bidder, Royale online Limited.

14It is the 2nd respondent’s case that the applicant has not demonstrated how the 1st respondent failed to follow the laid-down procedures in arriving at its decision. It also disputes the contention that the applicant was not given a fair hearing. It noted that the applicant filed pleadings and written submissions just like any other party to the application for review. The pleadings and submissions were considered by the 1st respondent before it arrived at its decision.

15I have considered the pleadings on record, the affidavits by the respective parties and the submissions by their learned counsel in support of the respective positions they have taken in this matter.

16In the request for review out of which arose the impugned decision, the applicant alleged that the reason given by the procuring entity for disqualification of the applicant’s bid was calculated to lock it out. In so doing, the procuring entity is alleged to have contravened section 79 (1) of the Public Procurement and Asset Disposal Act.

17The second issue that the applicant raised in the request for review which, in my humble view, is related to the first issue is that the applicant complied with all the requirements in the tender document and, in its view, its bid was the most responsive. In particular, it brought to the attention of the procuring entity page 139 of its bid document regarding a NIOSH authorisation letter that was the requirement in the tender document on technical specifications.

18The third issue was that the procuring entity acted in breach of sections 86 (1) (a) of the Public Procurement and Asset Disposal Act as read with section 3 of this Act for failing to find that the applicant had made the lowest evaluated bid and, consequently, was eligible for the award of the tender.

19Finally, that as a result of the procuring entity’s decision to award the tender to the interested party rather than the applicant, the latter had suffered loss and damage.

20Since the applicant’s case largely hinges on the allegations that what it considers as the germane issues were not addressed by the 1st respondent and that the applicant was not given a fair hearing, the immediate question that this honourable court ought to be concerned about is whether these issues were considered. If they were not considered as alleged, the applicant would be in good stead to benefit from the discretion of this court and obtain the prerogative orders sought. If, on the other hand, the applicant’s concerns were addressed, the allegation that the applicant was not given a fair hearing would turn out to be baseless and, in the ultimate, the applicant’s application would stand no chance.

21The next stop, therefore, is the 1st respondent’s decision.

22The decision came out clearly on the mode of hearing and, to this end, the 1st respondent made reference to its circular No 2/2020 dated March 24, 2020 according to which it dispensed with physical hearings and directed all applications to be canvassed by way of written submissions. The pleadings and any other documents filed by the parties would be deemed to be duly filed if they bore the 1st respondent’s stamp.

23All the parties were subjected to this mode of hearing and therefore, it cannot be that the applicant was prejudiced more than the rest of the parties. In any event, no such prejudice has been demonstrated to exist.

24The 1st respondent started by bringing out the applicant’s case quoting verbatim the prayers that the applicant sought. It noted that the applicant’s allegations that the reason given for its failed bid were not genuine but were orchestrated to lock out the applicant. It also noted the applicant’s allegation that the procuring entity had not complied with section 79(1) of the Public Procurement and Asset Disposal Act and that the applicant’s bid was the most responsive in the technical requirements.

25The 1st respondent also noted that the applicant had written a letter of April 19, 2022 in which the applicant referred the 1st respondent to page 139 of its tender containing the NIOSH authorisation.

26Again, the 1st respondent noted that the applicant had invoked section 86 (1) of the Act as read with section 3 of the Act for failing to find that the applicant had returned the lowest evaluated bid price. It also noted the applicant’s claim that it was bound to suffer loss and damage as a result of the award being made to the interested party rather than the applicant.

27The 1st respondent then proceeded to lay out the respondent’s case in answer to the issues raised by the applicant and then considered the submissions by the parties with respect to these particular issues. It defined issues related to a preliminary objection filed by the respondents and also the issues raised in the applicant’s application.

28The overarching question was whether the applicant had complied with all the mandatory requirements and one of these requirements was proof of WHO prequalification. The 1st respondent responded to this question as follows:We have carefully perused the applicant’s original tender submitted to the 2nd respondent in the subject tender and note that there is no document provided by the applicant in its original tender that speaks to WHO prequalification or known as registration or marketing authorisation for the manufacturer/supplier for the item by any stringent regulatory authorities or known as a certificate of conformity for CE marking which is provided by an entity recognised by the Notified Bodies listed for conformity assessment of medical devices in the Nando database.'At page 15 of 51 of the valuation report, the evaluation committee determined that the applicant’s tender did not provide either of the 3 documents required under this criterion. It is on this basis that the applicant’s tender was determined non-responsive at the technical evaluation stage and the applicant was notified as much in a letter of regret dated April 19, 2022. '

29The 1st respondent noted in its decision that indeed by a letter dated April 20, 2022 the applicant had referred the procuring entity to page 139 of its original tender in which the applicant indicated that a NIOSH authorisation letter for the manufacturers conformed to a copy of registration or marketing authorisation for the manufacture. It established as a fact that the letter was not an endorsement by NIOSH and that such endorsement was not stated or implied in advertisements or other publicity. It held that the letter was not a registration or a marketing authorisation for the manufacturer or supplier for the item. Accordingly, the 1st respondent agreed with the procuring entity that the applicant’s tender was non-responsive on this criterion for failure to comply with the mandatory technical criterion.

30The 1st respondent came to the conclusion that the applicant’s tender did not satisfy the mandatory technical requirements in the tender document and therefore could not proceed to the financial evaluation stage.

31It is apparent from the 1st respondent’s decision that it not only acknowledged the applicant’s concerns but it dealt with the main issue which was whether the applicant had complied with the tender requirements as set out in the tender document. To the extent that the rest of the issues were intertwined with this primary issue, the 1st respondent dealt with all the issues raised by the applicant in its request for review. There is, therefore, no basis for the allegations that the applicant was neither given a fair hearing nor the issues raised in his application for review were not addressed.

32Narrowing down to the grounds upon which an application for judicial review orders may be granted, it has not been demonstrated that the 1st respondent’s decision is tainted by illegality, irrationality or procedural impropriety. These grounds for judicial review were enunciated in the English case ofCouncil of Civil Service Unions versus Minister for the Civil Service (1985) AC 374,410 in which Lord Diplock set out the three heads which he described as 'the grounds upon which administrative action is subject to control by judicial review'. These grounds are illegality, irrationality and procedural impropriety. While discussing susceptibility of administrative actions to judicial review and, in the process defining these grounds, the learned judge stated as follows:My Lords, I see no reason why simply because a decision-making power is derived from a common law and not a statutory source, it should for that reason only be immune from judicial review. Judicial review has I think developed to a stage today when without reiterating any analysis of the steps by which the development has come about, one can conveniently classify under three heads the grounds upon which administrative action is subject to control by judicial review. The first ground I would call 'illegality,' the second 'irrationality' and the third 'procedural impropriety.' That is not to say that further development on a case by case basis may not in course of time add further grounds. I have in mind particularly the possible adoption in the future of the principle of 'proportionality' which is recognised in the administrative law of several of our fellow members of the European Economic Community; but to dispose of the instant case the three already well-established heads that I have mentioned will suffice.

33By 'illegality' as a ground for judicial review I mean that the decision-maker must understand correctly the law that regulates his decision-making power and must give effect to it. Whether he has or not is par excellence a justiciable question to be decided, in the event of dispute, by those persons, the judges, by whom the judicial power of the state is exercisable.

34By 'irrationality' I mean what can by now be succinctly referred to as 'Wednesbury unreasonableness' (Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1948] 1 KB 223). It applies to a decision which is so outrageous in its defiance of logic or of accepted moral standards that no sensible person who had applied his mind to the question to be decided could have arrived at it. Whether a decision falls within this category is a question that judges by their training and experience should be well equipped to answer, or else there would be something badly wrong with our judicial system. To justify the court's exercise of this role, resort I think is today no longer needed to Viscount Radcliffe's ingenious explanation in Edwards v Bairstow [1956] AC 14 of irrationality as a ground for a court's reversal of a decision by ascribing it to an inferred though unidentifiable mistake of law by the decision-maker. 'Irrationality' by now can stand upon its own feet as an accepted ground on which a decision may be attacked by judicial review.

35I have described the third head as 'procedural impropriety' rather than failure to observe basic rules of natural justice or failure to act with procedural fairness towards the person who will be affected by the decision. This is because susceptibility to judicial review under this head covers also failure by an administrative tribunal to observe procedural rules that are expressly laid down in the legislative instrument by which its jurisdiction is conferred, even where such failure does not involve any denial of natural justice. But the instant case is not concerned with the proceedings of an administrative tribunal at all.'

36These grounds of illegality, irrationality and procedural impropriety are ordinarily regarded as the traditional grounds for judicial review. The court will intervene and grant the remedy for judicial review if any of them is proved to exist. But as Lord Diplock suggested, the list is by no means exhaustive. The learned judge hastened to say that further development of this area of law may yield further grounds on a case by case basis and it is in this spirit that the principle of proportionality as a further ground for judicial review has been developed.

37Turning back to the applicant’s case, it has not been proved that the 1st respondent did not understand correctly the law regulating its decision-making power or that it failed to give effect to it.

38It can also not be said that the decision was so outrageous in its defiance of logic or of accepted moral standards that no sensible person who had applied his mind to the question to be decided could have arrived at it.

39Finally, there is no evidence of any sort of impropriety in the 1st respondent’s proceedings out of which arise the impugned decision.

40In the ultimate, I do not find any merit in the applicant’s application. It is hereby dismissed with costs. It is so ordered.

DATED, SIGNED AND DELIVERED ON 22 JULY 2022NGAAH JAIRUSJUDGE