Republic v Public Procurement Administrative Review Board & Ministry of Defence Ex parte Adan Osman Godana t/a Eldoret Standard Butchery & Joseph Chesire Chemuna t/a Avenue Butchery [2017] KEHC 5927 (KLR)

REPUBLIC OF KENYA

IN THE HIGH COURT OF KENYA

AT NAIROBI

JUDICIAL REVIEW NO.  622 OF 2016

IN THE MATTER OF AN APPLICATION FOR LEAVE TO APPLYJUDICIAL

REVIEWORDERS OFCERTIORARI AND PROHIBITION

IN THE MATTER OF THE PUBLIC PROCUREMENT   ND ASSET DISPOSAL ACT, 2015

AND

IN THE MATTER OF PUBLIC PROCUREMENT ADMINISTRATIVE   REVIEW BOARD

AND

IN THE MATTER OF APPLICATION NO.  98 OF 2016 AND 2ND DECEMBER, 2016

CONCERNINGTENDER NO.  MOD/422(01103) 2016/2017 CONCERNING

SUPPLYOF FRESHMEAT (BEEF) ON BONE TO ELDORET BASED UNITS

BETWEEN

ADAN OSMAN GODANA T/A ELDORET STANDARD BUTCHERY.......EXPARTE APPLICANT

AND

PUBLIC PROCUREMENT ADMINISTRATIVEREVIEW BOARD..................1ST RESPONDENT

MINISTRY OF DEFENCE....................................................................................2ND RESPONDENT

JOSEPH CHESIRE CHEMUNA T/A AVENUE BUTCHERY....INTERESTED PARTY/APPLICANT

RULING ON REVIEW

1. On 28th February  2017 this court delivered  a ruling  on the exparte  applicant’s  application  by way of chamber summons  dated  3rd December  2016  allowing the prayer   that the leave granted do apply for  Judicial Review orders on  13th December  2016 be and  do operate  as stay of enforcement or implementation   of the award  of a tender  for supply of fresh meat on bone  between  the procuring  Entity Ministry  of Defence  and the  interested  parties  Joseph  Chesire  Chemuna  T/A Avenue  Butchery.

2. More specifically, the court, after noting that there was an allegation that a contract of supply had been signed between the Procurement Entity and the  interested  party  herein on 7th December  2016,  made a specific   finding that such contract   was illegal  and in violation of Section 175  of  the Public procurement  and  Asset  Disposal Act, 2015  for reasons  that the Section provides for an automatic statutory stay of  implementation of  any decision  for  14 days  from date of the award  to allow for  any challenge  of the decision  of the Review Board.

3. The court also  ordered that there would   be a stay to preserve  the status  quo prevailing as at  7th December  2016  and before  the decision of the Review Board  was made  so as not to render the  applicant  a pious  explorer in the  judicial process, should the  Judicial Review  application be successful; and or not to foist  in the court  a situation of hopelessness  or render its decision an academic exercise and therefore  nugatory.

4. The order for stay was extracted   and issued on 2nd March 2017 by the honourable Deputy Registrar.

5. On 1st March  2017, the interested  party herein JOSEPH CHESIRE CHEMUNA T/A AVENUE BUTCHERY filed a notice of motion  dated  the same day, pursuant  to the  provisions of  Article  159(2) (d)  of the Constitution  of Kenya  2010, Section 3A , 63(e), Order  45  Rule  1  of the Civil Procedure  Rules  and Section  1A,1B, 3 and  3A  of the Civil Procedure  Act Cap 21 Laws of Kenya  seeking for  orders:-

a.That  this matter  be certified  as urgent  and service  thereof  dispensed  owing to the urgency, nature  and  circumstances  of  the case;

b.That pending  the hearing  and  determination  of substantive  motion, the orders of status quo as at  7th December  2016  over tender  No.  MOD/423(01103) 2016/2017 concerning the supply of fresh meat (beef)  on bone  to Eldoret Based Units made by this court on 28th February 2017 be reviewed,  vacated and or set aside;

c.That the applicant/interested party herein be allowed to continue supplying the recruits in accordance with the tender No.MOD/423(01103) 2016/2017 concerning the supply of fresh meat on bone to Eldoret Based Units and for avoidance of doubt until  the expiry  and  full performance of the contract dated  7th December  2016.

d.That costs of the application be provided for.

6. The application which was supported by the affidavit  of Phillip Kosgei & Joseph  Chesire  jointly sworn on 1st March 2017  was  predicated  on the grounds that:

a. The subject  of urgency  is that the  applicant  has learnt  of a recent  court ruling  made on  28th February  2017  touching   on a tender known as  Tender No, MOD/423(011 O3) 2016/2017  concerning the supply of  fresh meat (beef) on bone  to Eldoret  Based Units.

b. The court  gave orders, in the  absence of  factual  information concerning  the expiry  of the contract  of the exparte applicant  which expired in  November 2016.

c. If this factual information was brought  to the  knowledge  of the court, then the  court would  have arrived at a different  outcome other then the order  of  28th February  2017.

d. If the court  would have been informed  of the new facts  and or evidence that  there  was  an expired  contract   as at November, 2016 against the then  supplier, then  the court would  have exercised  judicial  restraint  in exercising  its discretion  in granting stay or any adverse order against the   applicant/interested party.

e. The  status quo as at 7th December  2016  was that the contract of the exparte  applicant  had expired and that  the contract  to the new supplier/interested party  was signed, and the earlier decision  of 30th September  2016 was upheld by the 1st respondent  and complied  with by the  2nd respondent.

f. The law  has been  settled  instances  where the  court is  invited  to exercise its discretionary powers, and  in such  circumstances, it  behooves  a court to  exercise  its discretion  judiciously and in an  independent  and fair  manner  so as  not to  occasion  injustice.

g. The application has been brought without undue delay, one day after the ruling.

h. If the ruling of 28th February 2017 and order is not reviewed urgently, there is a present danger and a real risk the applicant  is going to suffer  a major  loss, delay and big  financial  setback, not  only  on the applicant  but  untold  prejudice  will also be visited  upon the  2nd respondent  who why find it hard to accept  an invoice and  pay or settle  bills  of the exparte applicant  whose  contract  has expired  by operation of the law.

i. The applicant   is  likely  to lose a lot  of millions  if the  orders issued  on 28th  February, 2017  are not  stayed  and  reviewed  and or vacated, in the sense   that the applicant  has  invested  in buying   and  fattening  animals s to the tune of  over  20 million in a  bid  to realize  the contract  signed   on 7th February, 2017  with the  2nd respondent.

j. Justice   and  interests  of justice  would have  been properly  served if  the court would  have  seen the adverse  effects  of the order and  ruling  made  on 28th  February, 2017   was that the applicant/interested  party’s  right to act   under the contract   would be  stopped yet  it has  a valid  contract  signed  on 7th December, 2016.  This is itself   was enough for the court to exercise judicial restraint.(sic).

7. The application  is further supported by  the affidavit  sworn by Joseph  Chesire  Chemuna  and  Phillip  Kosgei T/A Avenue  Butchery, reiterating in  their depositions, the grounds in support  of the motion  and maintaining  that the orders  of  28th February  2017  unless  vacated will cause  hardship to them and the Procuring Entity  since they  have a valid  contract entered   into  on  7th December  2016  and that  the contract  between   the exparte  applicant  and the Procuring  Entity  expired   on  31st December  2016,  while urging the court to exercise  judicial restraint.

8. To the affidavit is  annexed  a copy of letter  of  notification of the  award for   supply of  fresh meat(beef) on bone  to Eldoret  Based Units  through restricted  tendering  dated  10th November  2016; a contract  dated  7th December  2016  between the procuring entity-MOD  and the interested  party herein  Avenue Butchery.  The contract, clause 2:1 thereof   stipulates that the effective date of the contract is 8th December 2016.

9. The respondents and exparte applicant did not file any responses to the notice of motion. Parties  canvassed  the application orally  with Mr Langat  appearing  and  also holding   brief  for  Mr Okara for the  interested party and  Mr Odhiambo held brief  for Ms  Maina for the  1st respondent.  Mr Were held brief for Mr Masika for the exparte applicant.

10. The respondents  did not  submit as they  wished not to  take any  position  in the matter whereas  Mr Were on behalf of the exparte applicant was allowed  to address  the court on  points  of law only  as they  had not filed a formal  response  in writing.

11. According  to Mr Lagat who  fully adopted the grounds  and  supporting  affidavit  of the interested party/applicant, there  are new  facts and  evidence  in the form of a letter  of notification  and a signed  contract  binding  the interested  party and the procuring entity  and that  had that evidence been  availed to the court at the time  of hearing of the application  and   prayer for stay, the court would  not  have ordered  for a stay.  It  was  submitted  that the new information is cardinal  and that unless  review of  the ruling  of 28th February  2017 is made, the rights  of the interested  party  applicant  stand prejudiced.

12. According  to Mr Lagat, the notification  letter  was made  41 days  after the  ruling  of Review  Board delivered  on  30th September 2016.  That a promise   was made to his client  that they  would  receive  a contract  on notice  from the  MOD(PE) and that  as at  10th December  2016 there   was no stop order  against  the  MOD  contracting  with the interested  party  hence the contract  of 7th December  2016.  It  was  further submitted  that the  applicant  applied for  review  of the  decision of the Tender  Committee 41  days  later after the award had  been made.

13. That the status quo as at 7th December  2016  is that there   was  no existing  contract  and if the  order is adhered to as it  is, there will be a crisis  as the (Procuring Entity) will not  have  anybody to supply meat  to its Eldoret  Based Units.

14. Further, that the contract for supply of meat between the Procuring Entity and the exparte applicant had effectively  expired on 30th November 2016  hence the  applicant  (Interested Party) has a valid contract  which took effect on 8th December  2016  and that  having been  the lowest tenderer, the Interested Party  should be  allowed to supply  the meat to the Procuring Entity  to avoid  a crisis  to the recruits.  That the exparte applicant having wasted their time   at the Review Board, they should not be allowed to enjoy any stay orders.

15. In response, Mr  Were for the  exparte  applicant  submitted in opposition to the notice  of motion  that the  application  is defective, is predicated  on wrong   provisions of the law; and that on the material  that  was  placed  before the court, the court  deemed  it fit to grant  stay  by declining  to sanitize  the violation  of the law.

16. It  was  also submitted that the impugned  decision   was made on 7th December  2016  and  that the  alleged valid  contract  was signed  on the same day  without  granting the exparte  applicant  time  to challenge  the decision  contrary to Section 175  of the Public Procurement and Asset   Disposal Act, 2015.

17. It  was  submitted that the applicant  herein   was  deceiving  the court that as at  7th December  2016  there  was  no supplier  of beef the (Procuring Entity) yet it  was the  exparte   applicant  who was supplying beef to the recruits.

18. Mr Were concluded that the interested party applicant cannot seek sympathy from the court to violate the law.

19. In a rejoinder, Mr Lagat  counsel  for the interested  party/applicant  submitted that there   was no existing  contract  in law  as at 7th December 2016  as the contract  which the  exparte  applicant  had with the Procuring Entity  expired  on 30th November  2016  by  effluxion of time  hence the exparte  applicant’s  claim is not  supported in law.

Determination

20. I have considered the applicant/interested party’s notice of motion, the grounds, supporting affidavit and counsel’s  submissions for and against  the application .

21. In Kenya, the substantive  law relating  to review of  the court’s own  order or judgment  is Section 80 of the Civil Procedure Act  whereas  the  procedural law is Order  45  of the Civil Procedure  Rules.

22. Although the exparte  applicant attempted  to submit that the court exercising Judicial Review jurisdiction  has no jurisdiction  or power to  review  its own  orders/decision  and that the  applicant  herein should  have appealed  the ruling of  28th February 2017 instead  of applying  for review, as the Law Reform  Act  does not  provide for  review  of the courts  own decision  unlike  the Civil Procedure Act and  Rules; and  whereas  I agree  that the  court’s  jurisdiction in  Judicial Review  matters  is donated  by Section 8 and  9 of  the Law  Reform Act, which jurisdiction  is exercised  through  Order  53   of the  Civil Procedure  Rules; and  whereas Section  8 and  9  of the Law  Reform  Act  do not   provide  for review  of the  court’s own orders in Judicial Review; there are two  conflicting  pronouncements/ decisions  from the Court of Appeal on this  issue.

23. In Biren  Amritlal Shah & Another Vs Republic  and 3 Others  CA No. 186/2004[2013] e KLR the court  held that in view of the provision of Section 8(3)  and  8(5)  of the Law  Reform Act, the High Court  did not  have jurisdiction to review  its previous  Judicial Review  orders.  But in  an earlier  decision in Nakumatt Holdings  Limited  V Commissioner  of Value added Tax[2011] e KLR, the same  Court of Appeal had made  a different  decision and held that the High Court  had residual  power to correct  its own  mistake  in the exercise  of its inherent  jurisdiction  where such a mistake  is remediable by the court.  The court stated:

“ Mr Ontweka  for the respondents  in his  submissions  to us, seemed to suggest  that  where a  law is  silent  on whether review is  permissible, the courts  must decline  jurisdiction where a review  is sought.  While we agree with him  that Judicial Review  is a special jurisdiction, we  do not  agree that  in clear cases, courts  should  nonetheless fold their  hands  and  decline jurisdiction. The process of review is intended to obviate hardship and injustice to a party who is otherwise not to blame for the circumstances he finds himself in. This court in the earlier  case we cited of  Aga Khan Education Services  Kenya V Republic (supra)  expressed  the view  that review  jurisdiction in cases  as the present  one,  should be  exercised  sparingly and in very  clear cut cases.”

24. Odunga J in Republic Vs Anti Counter feit Agency & 2 Others exparte  Surgipham  Ltd and  in Republic vs  Cabinet  Secretary for Transport & Infrastructure & 6 Others followed  the above  Court of Appeal’s  latter (2011)  decision  in the Nakumatt Holding  Ltd  case and  held inter alia, that this  court in the exercise of  its  inherent   powers had jurisdiction to grant  order reviewing  or setting  aside Judicial Review  orders.

25. I am in a total  agreement  with the  Nakumatt Holdings decision  as cited  by Odunga J and add that the inherent jurisdiction  of the court  is not dependent  on statutory  provisions, it is  residual power  which the court exercises to  ensure  that the  ends of  justice are met  in every case or  to prevent  abuse  its  process.  It is  that inherent  power which the  court will invoke to administer substantive  justice  in  the adjudication of disputes as stipulated in the new  constitutional dispensation.

26. Turning  to the  orders being  sought  in this case  for review of its orders  of stay issued  on 28th February  2017 and  setting aside  the same to  allow the interested  party to continue  supplying meat to the procuring entity  on the grounds  that this court made  the orders  of  28th February  2017 without  factual  information  concerning   the expiry  of the contract  of the exparte  applicant  which expired  on 30th November 2016; and  that had that  information been availed  to the court then it would  have arrived  at a different  decision  owing  to the new facts- It is  clear that  what the interested party is saying is that  this court  should vacate  its orders  of  28th February  2017  because it   was made  per incuriam, and that unless the  said order is set  aside  and or reviewed, the interested  party shall suffer great injustice  and  prejudice  as it has  a valid contract  with the Procuring Entity and that  as at  7th December  2016  when  the  Review Board’s decision  was  made, there  was  nobody supplying  meat  to the recruits  until when the new  contract dated 7/12/2016  with the Procuring Entity  was signed.

27. Further, that the exparte  applicant’s  contract had expired  on 30th November  2016  hence  there  was  nothing  for them to loose  as opposed to  the interested party who had  invested  heavily  in purchasing and  fattening of  animals  for meat Supply  to the  Procuring  Entity; and that  the Procuring Entity will not pay for  supplies   from the exparte  applicant without  a  valid  contract.

28. Examining  the Ruling  of  28th February 2017  which is sought  to be reviewed   vis avis  the so called  new facts  or information  which is a letter of  notification of the award dated  10th November  2016  and a contract  signed  on 7th December  2016  commencing  8th December  2016  between  the interested  party and the procuring  entity, I note that at  paragraph  14 of the  said ruling, the court clearly  captured  the submissions of  the interested party’s counsel  relying  on the Interested Party’s replying affidavit  filed in court on  29th December 2016  contending  that    a stay would not  be  viable  as the  interested  party  and the Procuring  Entity  had   already  signed  a binding  contract  for supply of meat.

29. Obviously, although  the contract  was   initially  not annexed  to that reply,  there  was  a deposition  and from  submissions  of its   existence  and as it has not  been  explained  why the contract  was never  annexed  to the reply, this court finds it hard to accept the claim that there is any new evidence which could not have been availed to the court at the material time of the hearing of the application for leave and stay.

30. In addition, the  court in  granting  stay was  clear that  despite  the disclosure  of the existence of that contract , the  said contract   was illegal  and in violation  of the automatic  statutory  stay provided for under Section 175(1)  of the  Public Procurement Administrative Disposal Act, 2015 which  stipulates  that unless the judicial review  is lodged  within  14 days  from the  date of the  decision  of the Review Board, the decision of the Review Board is final  and  binding  on the parties.

31. In this case, the parties were all in agreement   that the decision of the Review Board was made on 7th December 2016.  That being  the case, I maintain that a contract entered into the same day is illegal and this court  having  pronounced  itself  on that issue  of illegality  of the contract  of 7th December  2016,  cannot be called upon to state  otherwise by sitting on its  own appeal. In my view, only an appellate court can reverse my decision on that issue of illegality of the material contract.

32. Further, the issue  was  canvassed  comprehensively by both parties to the application for leave and stay and my ruling  of 28th February   2017  captured the issue very well  hence it  is not a  new matter  or information.

33. Further, a letter of notification of an award is not a contract.

34. The applicant’s counsel  did  state in his submissions that  there  was  no meat  supply to the Procuring Entity  between  30th November  2016  and  7th December  2016  because the  contract with the exparte applicant   had expired on 30th November, 2016.  That may be so  but  there  was no evidence as to  where the Procuring Entity  was getting  its meat  supplies   during  that period  which I can call the transitional period.

35. The Procuring  Entity chose to remain a silent  listener  to the conservation  between the exparte  applicant  and the interested  party in this case as if  waiting  for this  court’s  decision  whichever  way it goes.

36. It cannot, therefore  be said on its  behalf  by the interested party  that there will be a crisis  at the Eldoret  based  recruits  base  if the interested  party is not  allowed  to supply the meat, in view of the fact that the procuring entity  and the interested party never  said that  between 30th November  2016 and  7th December 2016  they had  any valid  contract of supply.

37. The position  does not  change by  re annexing  the letter of notification of the award as  it is the same  letter dated  10th November  2016  which  was annexed  to the interested party’s replying  affidavit sworn on 18th December  2016  at paragraph 7 as annexture exhibit  PKK4 and the  next  document  attached   thereto is a letter of  acknowledgment of  notification  letter of  award of the  tender.  It is  dated  30th November  2016  written  by the Interested Party addressed  to the  Permanent Secretary  Ministry  of Defence.  It therefore  follows  that indeed, there is no  new  evidence  or matter or error  apparent  on the face of the  record  or sufficient reason or cause to  warrant   a review  of the ruling of this  court made  on  28th February 2017.

38. In addition, a letter of notification of the award does not constitute a contract.  On the face of the said letter is clearly written: “Kindly note that    this is only a notification of offer and an Order”

39. That being the case, the Interested Party has to wait until a contract is signed before making any supplies.  But because of the  legal challenge to the award,  the Interested Party  never  acknowledged  notification until 30th November  2016   the same day  it is  alleged  the contract  between the  exparte  applicant and the  Procuring Entity  lapsed.  And the parties  waited until  after the decision  of the Review  Board  was pronounced  then they quickly  signed a contract  of supply on the same  day of the decision which  this court  has pronounced  to be an illegal  contractual act and it  remains so, whatever the circumstances, and until this court  pronounces  itself  on the merits  of the substantive  notice of motion, the status  quo  prevailing  before  7th December  2016  and as  at that  date shall prevail.

40. The exparte  applicant maintained  in the application for stay that it continued  supplying  meat up to  7th December  2016  the date of the  decision  of the Review Board. If the contract ended on 30th November 2016    the Procuring Entity has not told the court why it was still in association with the exparte applicant.

41. Where there is challenge  to the legal process, a stay is necessary   and status  quo  should be  maintained, where  appropriate, for good  administration  and in order  not to render  the success  of the Judicial Review nugatory.  This  is not  to presume  that the Judicial Review application will be  successful but that  in some  instances, stay of the decision  may amount to  temporarily  reversing  the decision in exceptional  circumstances, especially where the  respondent’s  actions are intended  to frustrate  the outcome  of the proceedings  or are illegal, like in the present case, and this court would not sit and sanitize an illegal act.

42. In my humble view, the  stay in public procurement  processes  if granted  by the court cannot  be an illegal  stay as  Order  53 (1)  of the Civil Procedure Rules  contemplates   a stay.  In most circumstances, by the time the parties are wrangling in court, the previous contracts   lapse.  That being the case, parties  especially the Procuring Entity  cannot be  left in a state of hopelessness as  a stay  contemplates  status quo  prior to the decision of the  Review Board  to continue until the Judicial Review  proceedings are  heard and determined  expeditiously.

43. This is a matter  which this  court gave priority  but what it  has witnessed  is delay by this application for review  which I find  totally unmerited and I proceed to dismiss it.  Each party to bear its own costs.

44. In order to have this matter out of way owing to its urgency, and for the PE to conclude the process of procuring meat for the recruits, I direct that the notice of motion dated 10th January 2017 be heard expeditiously on 5th April 2017. Parties to file written submissions within 3 days of today.

Orders accordingly.

Dated, signed and delivered in open court at Nairobi this 23rd day of March, 2017.

R.E. ABURILI

JUDGE

In the presence of

Mr Lagat for interested party applicant

Mr Munene for Respondents

N/A for exparte applicant