25. Counsel submitted that the High Court interfered with the statutory mandate of KEBS in making a determination that the percentage of the broken rice was a negligible deviation from the Kenya Standard; that section 14A of the Standards Act provides that where a product is found not to meet the standard provided it ought to be destroyed; that notwithstanding KEBS made a decision pursuant to World Trade Organisations Agreement on Technical Barriers to Trade to allow Phoenix to apply for downgrading of the rice, which the 1st appellant did after sometime; and this was a clear manifestation that the rice had indeed failed in grading. In the circumstances, it was therefore improper for the trial court to order unconditional release of the rice, Counsel stated.

26. The appellants supported the above submissions by KEBS. They added that under section 11 of the Standards Act if Phoenix was aggrieved by the decision of KEBS that some of the rice had not met the required standard it ought to have appealed in writing to the

KEBS Appeal Tribunal; that according to the “doctrine of exhaustion”, Phoenix was obligated to exhaust the administrative law options before moving to the High Court. In support thereof the appellants’ counsel cited Geoffrey Muthinja Kabiru & 2 others v Samuel Munga Henry & 1756 others [2015] eKLR, where this Court held:-

“It is imperative that where a dispute resolution mechanism exists outside courts, the same be exhausted before the jurisdiction of the courts is invoked. Courts ought to be the fora of last resort and not the first port of call the moment a storm brews within churches, as is bound to happen. The exhaustion doctrine is a sound one and serves the purpose of ensuring that there is a postponement of judicial consideration of matters to ensure that a party is first of all diligent in the protection of his own interest within the mechanisms in place for resolution outside of courts. This accords with Article 159 of the Constitution which commands Courts to encourage alternative means of dispute resolution”

27. Section 11 of the Standards Act states as follows:-

“Any person who is aggrieved by a decision of the Bureau or the Council may within fourteen days of the notification of the act complained of being received by him, appeal in writing to the Tribunal.”

We do not think that in the circumstances of this matter the above provision of the law was applicable. Phoenix waited patiently from 13th July, 2018 when it was denied access to its goods without any explanation until 3rd August, 2018 when it moved to court. And even after the petition was filed and interim conservatory orders granted, KEBS and other members of the multi-agency team did not take any action until 20th August, 2018 when it drew samples of the rice for testing. There was therefore no decision that could have been referred to the Tribunal.

28. In response to the question whether the learned judge had interfered with the statutory duty of KEBS, Phoenix submitted that following promulgation of the 2010 Constitution, in the discharge of its statutory duties and functions, KEBS is required to comply with its obligations under the Act and to act lawfully and fairly but in this particular incident it failed to do so. In support of that submission counsel cited this Court’s decision in Krish Commodities Limited vs Kenya Revenue Authority, Civil Appeal No. 67 of 2017 where it was held that exercise of powers by public officers ought to be reasonable, rational, fair and in accordance with Articles 10 and 47 of the Constitution; that every person has the right to fair administrative action in an expeditious, efficient, lawful, reasonable and procedurally fair manner, even in the exercise of statutory powers.

29. In ordering unconditional release of the rice, did the learned judge therefore interfere with the statutory role of KEBS?

On 20th August, 2018 after more than one month of sealing the 7th respondent’s warehouses without taking any action at all, the multi-agency team collected samples of the rice and sent them to KEBS’ headquarters in Nairobi to ascertain whether the rice met the set standards of any grade; the percentage of moisture thereof; if it had aflatoxin contamination; whether it had arsenic, cadmium, mercury and lead content; and whether it was fit for human consumption.

30. Some of the rice was found to be fully compliant with the required standard and could therefore be released for sale, but some of it was said to have failed in grading and therefore ought to be condemned for destruction; which was the initial stand taken by the multi-agency team. However, it was not demonstrated that under the provisions of section 14 A (1) of the Standards Act an order for destruction of the rice was merited. The section states as follows:-

“14 (1) An inspector may order the destruction of goods detained under section 14(1) if the following conditions are satisfied-

(a) testing indicates that the goods do not meet the relevant Kenya Standard; and

(b) it is reasonably necessary to destroy the goods because the goods are in a dangerous state or injurious to the health of human beings, animals or plants.”

31. Subsequently, it was established that the question of unfitness for human consumption of the rice did not arise and KEBS was agreeable to its downgrading. There were also various issues that were raised by Phoenix regarding the test results that showed that some of the rice did not meet the required standards. Among the issues were that some of the results were in respect of rice brands that allegedly did not belong to Phoenix; and the integrity of the DCI’s sampling process and submission of the samples for testing.

32. It was also argued that there was no reasonable explanation for the variation between the pre-shipment tests conducted by KEBS Pvoc agents and the test results conducted after the rice was impounded at the 7th respondent’s warehouses.

33. The learned judge appreciated that the pre-shipment verification was not a bar to further testing once goods are off-loaded; and that KEBS has a statutory duty to ensure that goods that are consumed in the country are of the required standard. However, the learned judge expressed some misgivings about the manner in which the multi-agency team, particularly the DCI and KEBS, had conducted the whole exercise of impounding and testing the rice in issue. The learned judge stated, inter alia:-

“84.  All along there has never been an issue of substandard, contraband  or  poisonous  rice.  The  issue  is  alleged failure  in  size.  This  cannot  be  considered  a  life threatening issue as submitted by the respondents. I have also looked at the alleged deviation in the size, which appears negligible. As I have already observed in issue  number  two  above,  a  comparative  analysis  of results attached to the Petitioner’s and Respondents Affidavits shows margins of deviation. The First Result on the DCI’s Second Affidavit relates to ‘Himalaya Pearl Biryani Rice’ has been failed on the basis of there being 8.7% broken rice instead of the 5% maximum permissible under the Kenyan Standards. All other parameters meet the Standard. Compare this to the SGS test report done by the Petitioner’s Independent Testing Agent in results appearing at Pages 241 and 248 of the Petitioner’s Fourth Affidavit where for the same ‘Himalaya Pearl Biryani Rice’ Brand, the broken kernels were found to be 1, 34% and 0.63%. At Page 255 is another test report showing 0.30% broken kernels. The testing done and Pre-verification of conformity for the same brand appears at Pages 325 to 334 of the Petitioner’s Sixth Affidavit showing the broken rice at 1.5% on the basis of which the PVOC was issued by KEBS through its contracted agent.

85. In my view, this margin of deviation is marginal and has been explained by the Petitioner. I have accepted that this kind of deviation can be caused simply by the way the cargo is handled both at loading and offloading and indeed dependent on the position of samples taken. This in my view is a kind of deviation that constitutes occupational hazard which should be accepted by the Respondents. To do otherwise will expose the fallacy of KEBS conduct to be discerned from a result in respect of Grade 3 rice issued by KEBS for a consignment that has long been sold and disposed of appearing as Exhibit ‘BJ6’ to the Petitioner’s Sixth Affidavit where Grade 3 rice is said to have had only 2% broken elevating it to Grade 1 in terms of the KEBS Milled Rice Specification appearing at Page 572 of Petitioner’s 6th Affidavit. ”

34. In so expressing himself, the Judge does not appear to have had any regard whatsoever to the affidavits sworn on 9th October 2018 by Caroline Outa-Ogweno, the Acting Director, Marketing Surveillance of KEBS. It may well be that that affidavit escaped the attention of the learned judge as no reference was also made to it in paragraph 2 of the impugned judgment where he set out the affidavits filed. In the affidavits sworn by Caroline Outa-Ogweno on on 9th October 2018 and 2nd November 2018 , it was deposed that samples of rice were taken for testing between 13th July 2018 and 20th August 2018; the contention by Phoenix that some of those samples were not taken from its stock was contested with KEBS maintaining that all the samples in question were taken from Phoenix’s stock of rice.

35. More significantly, it was demonstrated through those affidavits that some of those samples failed the results analysis and Phoenix acknowledged as much. In a letter dated 7th September 2018 exhibited to the affidavit of Caroline Outa-Ogweno sworn on 9th October 2018, Biren Jasani, a Director of Phoenix, wrote to the Managing Director, KEBS and admitted that some of the samples failed the test on brokenness. The letter stated in part:

 “Factually this rice is fit for human consumption and only failed on basis of broken percentage of maximum 5% and not any other tested parameters. Phoenix humbly requests your office to consider:

(a) Downgrading the rice to Grade 2 to enable us continue with our sales.

(b) We will ensure that we mark out all the bags as Grade 2 before dispatch to the market.”

36. Also exhibited to the affidavit was the KEBS standard prescribing that milled rice grains shall comply with the maximum limits given, which in respect of the characteristic of damaged broken kernels was 5% for grade 1, 15% for grade 2 and 25% for grade 3. There is no suggestion that those standards are arbitrary. Those standards recognize that there is an acceptable level of broken kernels beyond which the rice cannot be marketed as grade 1 rice. It is not, in our respectful view, the function of the court to, in effect, set its own standard as to what an acceptable standard is. By proceeding on the basis that the deviation was marginal or negligible, the lower court thereby substituted its own standard with that of KEBS, the body with the statutory mandate to do so.

37. In view of the foregoing, we agree with the appellants and with KEBS that the learned judge interfered with the statutory duty of KEBS by purporting to substitute its own standard on brokenness with that of KEBS and thereby erred in ordering unconditional release of the rice. This finding also disposes of the 5th and 6th issues for determination.

 (ii) Did the learned judge contravene the provisions of Articles 43 and 46 of the Constitution?

38. Article 43 (1) (c) guarantees every person the right to adequate food of acceptable quality; while Article 46 states as follows: -

“46.

(1) Consumers have the right-

(a) to goods and services of reasonable quality;

(b) to the information necessary for them to gain full benefit from goods and services;

(c) to the protection of their health, safety, and economic interests; and (d) to compensation for loss or injury arising from defects in goods or services.

(2) Parliament shall enact legislation to provide for consumer protection and for fair, honest and decent advertising.

(3) This Article applies to goods and services offered by public entities or private persons.”

39. The submission by the appellants that ordering release of the rice was tantamount to risking the health of consumers who may be “exposed to the probability of consuming rice that has failed in grading”, is not entirely accurate. It was not demonstrated that the rice in question was in any way unfit for human consumption. No sample was found to have any aflatoxin or any harmful chemical or compound. It was the percentage of the broken rice that was said to be higher than the required standard, and that is why KEBS was not opposed to its downgrading.

40. The learned judge was cognizant of the constitutional role of KEBS under Article 46 of the Constitution. He delivered himself as follows: -

“It is the statutory obligation of the 6th Respondent to ensure that the goods being consumed are of the required standards, failure of which the Public risks consuming harmful and/or substandard products. Further Article 46(1) (a), (b) and (c) of the Constitution of Kenya, 2010 protects consumers’ economic rights, rights to quality, safe and healthy products which the 6th Respondent is mandated by statute to enforce among other Agencies. So, the 6th Respondent in sampling and testing the Rice consignment is performing its constitutional and statutory obligation of protecting the consumers.”

41. However, the learned judge observed that whereas KEBS has an important constitutional and statutory duty, it has to undertake it in a lawful manner and without destroying the Phoenix’s business.

The learned judge did however downplay the statutory duty of KEBS of protecting the public from substandard products.

(iii) Did the learned judge overlook two affidavits filed by KEBS which provided test results of the rice? Did he substitute KEBS’ test results with his own decision?

42. As already indicated, the answer to this question is in the affirmative. As already stated, there were two affidavits that were sworn by Caroline Outa-Ogweno, Acting Director, Market Surveillance, KEBS. The first affidavit was sworn on 9th October, 2018 shortly after the Petition and Cross Petition were filed. The deponent stated, inter alia, that 28 samples of rice were drawn for testing and some of them failed the test while others complied and the rice represented by the samples that complied was released, while that did not comply was withheld; that subsequently the 1st respondent wrote to KEBS requesting to have the non-compliant rice downgraded instead of being destroyed.

43. In the second affidavit sworn on 2nd November, 2018, Caroline Ogweno stated, inter alia:-

 “7. That it is in my knowledge and that of the Cross - Petitioner that part of the rice tested failed in terms of grading. This has an impact on the grade of the rice. The grade of the rice has an impact on the price of the rice. A higher grade attracts a higher price. A lower grade deserves a lower price.

8. That it is in the consumers’ economic interest to get value for their money. It would be unjust, unconstitutional and unconscionable for the consumers to pay a higher price for rice whose grade is much lower.

9. That it is necessary to hold onto the non-compliant rice until a decision is made respect to its destruction or otherwise.”

44. At paragraph 16 of the judgment, the learned judge extensively dwelt on the affidavit sworn by Caroline Outa-Ogweno on 2nd November, 2018. At paragraphs 57, 58, 59 and 60, the learned judge again considered the submissions by KEBS’ learned counsel, Miss Ombati, and made reference to the an affidavit dated 19th October 2018. The affidavit of 19th October 2018 referred to is the “Petitioner’s further replying affidavit” that was sworn by Biren Jasani. Quite clearly, the learned judge did not consider one of the affidavits by Caroline Outa-Ogweno, namely the affidavit of 9th October, 2018.

45. In considering whether the deviation in the size of the rice should lead to its destruction, re-classification or otherwise, the learned judge acknowledged that:-

“It is the statutory obligation of the 6th Respondent (KEBS) to ensure that the goods being consumed are of the required standards, failure of which the public risks consuming harmful and/or substandard products… so the 6th Respondent in sampling and testing the rice consignment is performing the constitutional and statutory obligation of protecting the consumers.”

46. That notwithstanding, the learned judge for reasons that he expressed, was not satisfied that the deviation in the grade of the rice called for its destruction. Whereas we agree with the learned judge that it did not call for destruction, it did not, in our view, call for unconditional release of the rice as grade 1 rice. We reiterate that it was not demonstrated the requirements of section 14A (1) of the Standards Act had been satisfied as to warrant the destruction of the rice.

(iv) Whether the learned judge erred in law by relying on the pre-shipping verification to order release of the rice.

47. We have already alluded to this issue. At paragraph 86 of the impugned judgment, the learned judge observed that before the rice was shipped, KEBS’ Pvoc Agents had inspected it and verified that it met the required standards (and the results were shown); that upon its arrival at the Port of Mombasa it was randomly sampled by KEBS and released upon confirmation that it met the relevant standards; and that there was likelihood of a variance in the broken percentage of the rice, “based on whether the bag had been stepped on or handled harshly (by throwing) during the exercise of stacking or loading /unloading into or from trucks/containers/warehouses”, as the learned judge put it.

48. The court went on to state that the size variations were negligible; that the method to determine the percentage of the broken rice was not scientific, and that the subsequent results were not totally accurate, considering that some of the results were in respect of rice samples that did not even belong to Phoenix. We note that the Phoenix in one of its affidavits had annexed videos showing how the rice was handled during loading and off-loading and storage.

49. On our part we have no basis of affirming the learned judge’s view that the method used by KEBS to determine the percentage of the broken rice was not scientific. That said, the learned judge acknowledged that “the fact that the rice was tested and did pass the test at the country of origin is not a bar to further testing once the goods are in Kenya and being traded” and that “it is the statutory obligation of [KEBS] to ensure that the goods being consumed are of the required standards…” Yet, the Judge went ahead to order the unconditional release of the goods despite the testing done in Kenya showing that rice of a lower grade would be passed off to the public as grade 1 rice and not withstanding that Phoenix itself acknowledged in its letter dated 7th September 2018 that the rice failed on basis of broken percentage of maximum 5%”. We think the learned judge erred in doing so..

(v) Whether the learned judge erred in awarding damages against KEBS

50. Having concluded that the Judge erred in ordering the unconditional release of the rice, the question of awarding damages does not arise.

51. In view of the foregoing, we find this appeal and the cross appeal have merit. We allow the appeal and the cross appeal. We set aside the judgment of the High Court at Mombasa in Constitutional Petition No. 205 of 2018 delivered on 24th January 2019 and substitute therefor an order dismissing the petition with no orders as to costs. The 1st respondent shall however bear the costs of the appeal and of the cross appeal

It is so ordered.

DATED and Delivered at Mombasa this 19th day December, 2019.

D. K. MUSINGA

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JUDGE OF APPEAL

S. GATEMBU KAIRU, FCIArb

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JUDGE OF APPEAL

A.K. MURGOR

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JUDGE OF APPEAL

I certify that this is a true copy of the original.

DEPUTY REGISTRAR