Republic v Public Procurement Administrative Review Board Ex-Parte Syner- Chemie Limited,Kenya Medical Supplies Authority,Revital Healthcare (EPZ) Limited & Anocma Enterprises [2016] KEHC 1107 (KLR)

REPUBLIC OF KENYA

IN THE HIGH COURT OF KENYA

AT NAIROBI

JUDICIAL REVIEW NO.  371 OF 2015

IN THE  MATTER  OF AN APPLICATION BY SYNER-CHEMIE  LIMITED FOR  LEAVE TO APPLY FOR JUDICIAL REVIEW ORDERS OF CERTIORARI AND MANDAMUS AGAINST THE PUBLIC  PROCUREMENT   ADMINISTRATIVE   REVIEW BOARD

AND

IN THE MATTER OF ARTICLES 10,22,23(3) (f), 47(1), 50(1) AND 165(6) & (7) OF THE CONSTITUTION OF KENYA 2010

AND

IN THE MATTER OF PART III OF THE FAIR ADMINISTRATIVE ACTIONS ACT, 2015

AND

IN THE MATTER OF SECTION 8 AND 9 OF THE LAW REFORM ACT CHAPTER 26

AND

IN THE MATTER OF ORDER53 (1) OF THE CIVIL PROCEDURE RULES 2010

AND

IN THE MATTER OF SECTION 175(1) OF THE PUBLIC PROCUREMENT AND ASSET DISPOSAL ACT, 2015

AND

IN THE MATTER OF THE TENDER FOR SUPPLY OF NON PHARMACEUTICALS (SURGICAL TUBES AND CANNULAES) TENDER NO.  KEMSA /01T7/2015-2017 BY KENYA MEDICAL SUPPLIES AUTHORITY

BETWEEN

REPUBLIC……………………………………..................................APPLICANT

VERSUS

PUBLIC PROCUREMENT

ADMINISTRATIVE REVIEW BOARD……………….…………RESPONDENT

KENYA MEDICAL SUPPLIES AUTHORITY……...1ST INTERESTED PARTY

REVITAL HEALTHCARE (EPZ) LIMITED…............2ND INTERESTED PARTY

ANOCMA ENTERPRISES………………………….3RD INTERESTED PARTY

SYNER- CHEMIE LIMITED …………………...…….....EX-PARTE APPLICANT

RULING

1. By an application dated  5th October  2016  the applicant  who is the 1st interested party herein  Kenya Medical Supplies  Authority seeks  from this court  orders:

i. That the application be certified urgent and the same be heard exparte on a priority basis and service   therefore be dispensed with the first instance.

ii. That   the court be pleased to issue an order   of stay of the order made on 23rd September 2016   staying the procurement process of tender No.  KEMSA /01777/2015- 2017 pending interpartes hearing hereof and final disposal   of the application.

iii. That there is stay of the order of 23rd September 2016   pending hearing and determination of the appeal as lodged.

iv. That costs be provided for.

2. The application is predicated on the grounds on the face of the notice of motion, the supporting affidavit of Dr John Munyu and the annextures thereto.

3. Mr Senteyo counsel for the  1st interested  party/applicant argued  the  application  orally before me this morning  after  I certified  it urgent  and  directed that  it be  heard expeditiously  in the first  instance.

4. Mr Senteyo submitted that his client was dissatisfied with the orders of this court made on 23rd September 2016 staying procurement process of tender No.  KEMSA /01T7/2015-2017 pending hearing and determination of these judicial review proceedings and have since  filed  a notice of appeal  to the Court of Appeal  challenging that order.

5. That the contract  between the 1st and  2nd interested  parties   was signed on 15th August  2016  which was way  before the exparte  applicant filed the application for leave to commence judicial review proceedings on 19th August 2016.

6. Further, that the Review Board  after  striking out   the request  for review , ordered  that the  procurement  process  proceeds hence  the signing  of the contract on 15th August  2016   as shown by annexture JMM2.

7. It  was submitted that at the time  when the contract   was being  signed there was no stay and that the application for  leave  was only  served  upon his clients  on 28th August  2016  without an accompanying  order of stay hence  there was nothing  to prevent  the procurement  process  from  going on.

8. Further, it  was submitted that  when the parties came to court  on 31st August  2016   the exparte applicant  withdrew  the notice of motion  hence  the stay orders that  were granted  on 19th August  2016   lapsed.

9. It  was  submitted that the procurement  process is at  an advanced stage, and that therefore the 1st interested party being a state corporation mandated by statute to supply  pharmaceutical  and non  pharmaceutical  products to hospitals, and since the  supplies  have run out, the decision of this court  made on 23rd September  2016  extending   stay orders which lapsed  and that order  of stay being appealed from, it in the interest of justice   that the said order  be stayed  to allow the procurement process to proceed  since the stoppage thereof has serious ramifications as  public facilities  will not get   the supply of the tubes.

10. Further, that damages might ensue which will prejudice the interests of the interested parties who have already signed a contract for   procurement.

11. I have  carefully considered the application by the applicant  1st  interested   party brought under  Order  42 rule  6 and Order  51 of the Civil Procedure  Rules and Section 3A of the Civil  Procedure Act  and all other enabling  laws.

12. The significance of an order of stay was exemplified in the case of In Butt Vs Rent Restriction Tribunal [1982] KLR 417 where the court held that:

“ The general  principle in granting or refusing a stay  is that if there is no  other overwhelming  hindrance  a stay  must be  granted to that an appeal may not be  rendered nugatory  should  the decision  be reversed.”

13. And in Mukoma Vs Abuoga, [1988] KLR 545 the Court of Appeal stated inter alia, that:

“……the issue of substantial loss is the cornerstone of both jurisdictions.  Substantial loss is what has to be prevented by preserving the status quo because such loss would render the appeal nugatory.”

14. In Standard Ltd & Others Wilson Kalya Civil Application CA Nairobi 369/2001 the Court of Appeal held inter alia that:

“………..a) the appellant must show that his appeal is an arguable   one.  In other words, he must   show that the appeal is not a frivolous one;

(b)   The appellant  must also  show, in  addition, that if the order of stay  of proceedings  is not granted, his  appeal, if  it  were to succeed, would be rendered  nugatory.

15. In Tabro Transporter Ltd Vs Absolom Dora Lumbani [2012], Gikonyo J stated that:

“Of course a frivolous   appeal cannot be rendered nugatory.  The  only caution however, is that  the High Court  should not   base  the exercise  of  its discretion  under  Order 43 Rule  6 of the Civil  Procedures  Rules on the chances  of the success  of the appeal.  It must   consider factors that constitute substantial   loss.  Much more is therefore needed in order to pass the test I have set above.”

16. In the instant  case, on  23rd September 2016   this court  granted  the exparte applicant  orders enlarging  the period within which the  substantive notice of motion  was to be filed  after the   initial  period  granted  by the court  lapsed  after the withdrawal of an erroneous application.

17. The court  also  granted  stay of  enforcement  of  the decision of the Review Board  made on  5th August  2016, which decision  the exparte  applicant  was seeking  to challenge  by these Judicial Review  proceedings.

18. The 1st  interested  party claims  that  it will suffer  irreparably if the  orders  of  23rd September  2016  are not  stayed  since on 15th August  2016  it entered  into a procurement   contract with   the 2nd interested  party since it was given   a go ahead  by the Review Board  by its  decisions made on  5th August  2016.

19. Although the application is being considered exparte, the burden of proving that the stay orders sought are   merited in the first instance lies with the person who applies and in this case, the 1st interested party.

20. The court notes that under Section 175(1) of the Public Procurement and Asset Disposal Act No. 33 of 2015, (1) A person aggrieved  by a decision  made by the Review Board  may seek  Judicial Review  by the High  Court   within  14  days from for  date of the Review  of Board’s  decision, failure to which the  decision of the Review  Board  shall be  final and binding  on both parties.”

21. In the instant case,  the decision of the Review  Board   was made  on 5th August  2016  and on  19th August  2016, the  exparte  applicant filed an application for leave to institute  Judicial Review  proceedings, which  was within the  14  days stipulated  under Section  175(1)  of  the Public Procurement and Asset Disposal Act.

22. Nonetheless, from the averments of the   1st interested  party, even before  the elapse of the  14 days  within  which  one would file  for Judicial Review of the decision of the Review Board, on 15th August, 2016, the applicant herein  entered  into a  contract   with the  2nd interested  party and that it is in the  advanced  stages  of enforcing  that contract   hence the orders  of 23rd  September  2016   have serious  ramifications  including  damages  for breach of  contract  on the part  of the 1st interested  party which  is a statutory  body.

23. In Republic  Vs Public Procurement   Administrative Review Board and 2 Others Exparte  Noble  Gases  International  Ltd [2013] e KLR the court  was  categorical that:

“In my view, where Judicial Review proceedings are commenced within 14 days from the date of the respondent’s decision the said decision is neither final nor binding and hence ought not to be implemented.  Thus, there is an  automatic  stay under Order  53 of the Civil Procedure Rules……..the fourteen days   period is  a window period  availed to serve the purpose of  limiting the time frame  within which a  review against the  Board’s  decision can be  lodged in the High Court  for purpose of  expediency  and conclusiveness  of the   Board’s decision as these activities are time   bound and the procurement  process  ought not to be  hold hostage  to  indefinite proceedings…..

The decision of the Board after the application for review has been filed remains subject to the court’s directions and   decision.  This provision answers the core question in contention, that is, whether  the filing of  Judicial Review  proceedings before the High Court  within  the prescribed  period  of  14 days  acts  as an automatic   stay.  I take  the position  that Section  100 of the Act  implies  that the Board’s  decision  is to be  kept  in abeyance  until the court makes  its final  decision.  The use of the term “shall take   effect” discloses the legislative purposes and intent.  For all practical  purposes, the Board’s  decision  was  ‘frozen’ so to speak until such   a time as  the High Court  issued an  order of  Judicial Review  contemplated  under the  Section over  the decision  or after the lapse of the  14 days  period  whichever  comes first.  I find and hold that provision is a statutory stay.”

24. From the  above  decision interpretative of Section  100 of the repealed Act   and which is in pari materia  with Section  175(1)  of the current  Public Procurement and Asset Disposal Act 2015, it is clear that the 1st interested  party herein  could only  have signed  a valid contract   with the  2nd interested  party after expiry   of  14 days  from 5th August  2016  and only if  there was  no application for  Judicial Review  proceedings.  It cannot escape from the statutory provisions which are meant to protect those who are aggrieved by the decisions of the tribunal.  By entering  into a  contract  on 15th August    2016 elapse   of 14 days, it  was  varying  the scope  of  its  statutory  powers and duties, which  cannot be  allowed  to stand.

25. Accordingly, I find that the application for stay is not merited at this stage   as it would  amount to  sanctioning an illegality  to be  continued  by the  1st interested party  and therefore  the allegations  of serious  ramifications are  in the view  of this court  meaningless  to the established   law.  A similar decision was reached in KenyaPower &Lighting Company Ltd Vs NGM.Co. Ltd & 2 Others [2010] e KLR by the Court of Appeal.

26. Thus, even if the application was served  on 28th August  2016  without  any orders  of stay  by this court, by  15th August  2016  there  was  a statutory  stay.  Accordingly, find the application by the 1st interested party not merited. I dismiss the application for stay as sought in prayer 2 of the Notice of Motion   dated 5th October 2016 with no orders as to costs.  This ruling    applies to JR   372 of 2016 with necessary modifications as to the parties thereto.

Dated, signed and delivered   in open court this 7th day of October 2016.

R.E. ABURILI

JUDGE