Please Wait. Searching ...
Republic v Public Procurement Regulatory Authority; Moi Teaching and Referral Hospital (Interested Party); Resh and Company Limited (Exparte) (Application E051 of 2022) [2022] KEHC 18078 (KLR) (Judicial Review) (2 December 2022) (Judgment)
Neutral citation:
[2022] KEHC 18078 (KLR)
Republic of Kenya
Application E051 of 2022
J Ngaah, J
December 2, 2022
Between
Republic
Applicant
and
Public Procurement Regulatory Authority
Respondent
and
Moi Teaching and Referral Hospital
Interested Party
and
Resh and Company Limited
Exparte
Judgment
1.The application before court is the applicant’s motion dated 8 April 2022 filed under Order 53 Rule 1(1) (2) and (4) of the Civil Procedure Rules, section 8 & 9 of the Law Reform Act, cap. 26 and section 42 of the Public Procurement and Asset Disposal Act, No. 33 of 2015. The application seeks the judicial review orders of Certiorari and Prohibition; the prayers for these orders have been captured in the motion as follows:a)That the Honourable Court be and is hereby pleased to grant an order of Certiorari to remove into this Honourable court for the purpose of being quashed the Respondent’s Final Decision dated 16th March 2022 indicating that:i)The upshot of the above is that the request for debarment has disclosed a case for debarment of the Respondent under Section 41(1) (a) and (c) of the Public Procurement and Asset Disposal Act, 2015.ii)Therefore, and in accordance with the powers bestowed upon the Public Procurement Regulatory Board, the Respondent is hereby debarred for the minimum period of three (3) years in line with section 41 (4) of the Act from the date of this decision.b)Thatthe Honourable Court be and is hereby pleased to grant an order of Certiorarito remove into this Honourable court for the purpose of being quashed entirely the Debarment proceedings in respect to PPRA Debarment Application No. 16 of 2022; Moi Teaching and Referral Hospital v Resh and Company Limited.c)Thatthe Honourable Court be and is hereby pleased to grant an order of Prohibitionto restrain the Respondent and the Interested Party from publishing or in any way effecting or executing the decision dated 16th March 2022 and delivered on 18th March, 2022 in PPRA Debarment Application No. 16 of 2022; Moi Teaching and Referral Hospital v Resh and Company Limited.d)Thatthe Honourable Court be and is hereby pleased to grant an order ofProhibitionto restrain the Respondent and the Interested Party from either instituting, convening, purporting to convene a hearing to debar the Ex-Parte Applicant in respect to the same subject matter as those under which PPRA Debarment Application No. 16 of 2022; Moi Teaching and Referral Hospital v Resh and Company Limited was brought.”
2.The motion is based on a statutory statement dated 31 March 2022 and a verifying affidavit sworn on even date by Bernard Oluoch Osedo. Osedo has sworn that he is a director in the applicant company.
3.According to the statement and the verifying affidavit, the applicant and the interested party entered into a contract on 17 December 2019 for the supply of a standby generator. Pursuant to the terms of the contract, the applicant delivered the generator to the interested party on 20 May 2020.
4.Payment for the generator was to be made in two instalments; 85% of the contract sum was to be paid upon delivery while the balance of 15% was to be paid upon expiry of the defect liability period which was five months from the date of delivery.
5.The interested party only paid the 85% but failed to pay the balance of 15% ostensibly because, the generator supplied by the applicant was of inferior quality and, in any event, not fit for the purpose for which it was procured. The interested party’s concerns on the reliability of the generator are said to have been raised more than nine months after its delivery.
6.Rather than pay the applicant, the interested party asked the respondent to debar the applicant on grounds that the applicant had committed an offence under section 41 (1)(a) of the Public Procurement and Asset Disposal Act, No. 33 of 2015. To be precise, the applicant is alleged to have breached the code of ethics and engaged in fraudulent activities by supplying a generator which it passed off as having met the technical specifications under the contract for procurement contrary to section 41 (h) and section 176 (1) of the Act. The applicant is also said to have been involved in fraudulent practices in procurement proceedings including forgery of the Manufacturer’s Authorization Letter and Manufacturer’s Authorization Form contrary to section 66 (3) (b) of the Act. It also failed to conduct itself in a professional manner contrary to Regulation 7(1) of the Code of Ethics; and finally that it knowingly, without just cause, and contrary to section 176 (1) (b) of the Act, misled the interested party which is a public institution.
7.The applicant opposed the request for debarment and to that end filed a notice of preliminary objection against the proceedings on the ground that there were pending cases over the same dispute. These cases were stated to be Eldoret Chief Magistrate Court Case No. E3899 of 2021; Republic v Doris Kagwira and Another and Eldoret High Court Constitutional Petition No. 3 of 2022 and Resh and Company Limited and 2 Others v The Attorney General and 3 Others. Again, it was contended that there existed a court order staying the criminal proceedings against the applicant.
8.The respondent found for the interested party and in its decision rendered on 16 March, 2022 it made the following orders:
9.The applicant contends that that the respondent’s decision was made in total disregard of the pending suits before courts and, in particular, a court order staying the criminal proceedings against the applicant. It is also contended that only a court of competent jurisdiction could declare that applicant to have breached the contract. The respondent did not have jurisdiction to do so.
10.In response to the application, the respondent filed a replying affidavit sworn on 10 May 2022, by Patrick K. Wanjiku, the respondent’s director-general. The respondent, it has been deposed, is a regulatory authority established under section 8 of the Public Procurement and Asset Disposal Act, with a statutory mandate of ensuring that procurement procedures established under the Act are complied with. In that regard, and under section 41 of the Act as read together with regulation 22 of the 
Public Procurement and Asset Disposal Regulations, 2020, the respondent has the mandate to debar persons who commit breaches prescribed in the Act.
Public Procurement and Asset Disposal Regulations, 2020, the respondent has the mandate to debar persons who commit breaches prescribed in the Act.
11.The Request for Debarment of the applicant was considered by the respondent in accordance with Regulation 22 (5)(a) and (b) and it is after completion of the consideration that the respondent found that there was a prima facie case against the respondent. It then issued a Notice of Intended Debarment dated 14 January, 2022 to all the parties involved with directions on hearing and disposal of the debarment proceedings.
12.Subsequently, the respondent delivered its decision on 16 March,2022 debarring the applicant for a period of three (3) years.
13.It has been deposed that the pendency of a court case does not preclude the debarment committee from conducting debarment proceedings. All the issues that the applicant has raised in these proceedings were raised and considered in the debarment proceedings but were dismissed.
14.Dr. Wilson K. Aruasa, the interested party’s Chief Executive Officer, swore a replying affidavit on behalf of the interested party. Dr Aruasa deposes that the interested party is a level 6 national teaching and referral hospital which offers outpatient, inpatient, and specialized healthcare services. It serves a population of over 24 million people from 23 counties in Kenya; it also serves parts of Eastern Uganda, South Sudan, Tanzania and the Democratic Republic of Congo.
15.According to Dr. Aruasa, the applicant supplied the interested party with a counterfeit generator, a fact that has been confirmed by the Anti-Counterfeit Authority. In doing so, the applicant exposed the interested party’s patients to the risk of loss of their lives.
16.As a matter of fact, the malfunction of the generator caused the interested party to stop chemotherapy sessions thereby compromising the treatment of cancer patients.
17.It has also been deposed that the applicant has suppressed the fact that this Honourable Court sitting in Eldoret in Constitutional Petition No. 3 of 
2022: Resh & Company Limited and Others v The AG and 3 others, set aside all orders issued by the court with regards to Eldoret Chief Magistrate Court Case No. E389 OF 2021:R vs. Resh and Company Limited & 2 Others. In any event, Section 193A of the Criminal Procedure Code allows for both criminal and civil proceedings to proceed simultaneously.
2022: Resh & Company Limited and Others v The AG and 3 others, set aside all orders issued by the court with regards to Eldoret Chief Magistrate Court Case No. E389 OF 2021:R vs. Resh and Company Limited & 2 Others. In any event, Section 193A of the Criminal Procedure Code allows for both criminal and civil proceedings to proceed simultaneously.
18.It has also been sworn that it was a mandatory requirement in the tender document that the engine of the 350 KVA Standby Diesel 
Generator be one running on either Perkins or Caterpillar Incorporated, being two renown companies, which specialize in manufacturing generator engines. The applicant is said to have purportedly supplied, delivered and installed a generator that was of inferior quality and which was manufactured by neither of these companies.
Generator be one running on either Perkins or Caterpillar Incorporated, being two renown companies, which specialize in manufacturing generator engines. The applicant is said to have purportedly supplied, delivered and installed a generator that was of inferior quality and which was manufactured by neither of these companies.
19.Even though the applicant had been supplied with a counterfeit generator, the interested party had paid the applicant Kshs. 5,641,569/= being 85% of the Contract. The balance was to be paid upon conclusion of a five months’ satisfactory performance of the generator.
20.On 22 October, 2020 the generator tripped shortly after it had been switched on after a power outage. The interested party’s principal engineer recommended that the generator be rejected due to its non-performance since it was still under the twelve months’ warranty period. The interested party requested the applicant to replace the generator but the applicant rejected the request and instead sought for inspection of the generator by its technician. It was then alleged that the malfunction was occasioned by the interested party’s employee who accidentally pressed the emergency button.
21.An enquiry made by the interested party to Perkins Engines Manufacturing Company which is alleged to have manufactured the generator on whether the generator could be replaced under the manufacturer’s warranty, revealed that the generator neither ran on a Perkins engine nor was the engine brand associated with Perkins. This confirmation by Perkins, brought to question the Manufacturer's “Authorization Form” given by the applicant during the tendering process, and which form was allegedly authorised by Perkins company.
22.A test run conducted on 22 March 2021 to 24 March 2021, in the presence of the representatives from the applicant, the interested party and officers from the Ministry of Transport, Infrastructure, Urban Development and Public Works showed that the entire engine block had an inbuilt malfunction attributed to the manufacturer’s defect.
23.A report from the Ministry confirmed that the generator was neither fit for the intended purposes nor did it meet the specifications in the tender document.
24.The interested party gave the applicant a chance to replace the generator but later, after several efforts, the interested party opted to have the applicant decommission the generator set and refund the contract sum being Kshs. 5,641,596.00/=.
25.The applicant sought for more time to replace the generator.
26.An official complaint was then made to the Anti- Counterfeit Authority for further investigation of the authenticity of the counterfeit generator. This action was necessary because the applicant intended to decommission the ill-fated generator and sell it to unsuspecting members of the public. It is out of the proceeds of the intended sale that the interested party would have been refunded.
27.It is after the Anti-Counterfeit Authority instituted criminal proceedings against the applicant that the interested party lodged a request for debarment under section 41 of the Public Procurement and Asset Disposal Act. The respondent proceeded to make its decision under this provision of the Act and therefore it is intra vires the Act.
28.I have had opportunity to consider the written submissions filed by the parties with respect to the positions they have adopted in this application.
29.I must state at the outset that grounds of judicial review are the only avenue through which a judicial review court would intervene in administrative decisions or generally check the exercise of power by public authorities such as the respondent. It is for this reason that whenever a judicial review court is confronted with an application such as the instant one, its immediate attention is drawn to the ground or grounds upon which the application is made. The applicant’s case would, to a greater degree, be weighed against the ground or grounds of judicial review that have been set out in the statutory statement. In other words, the fate of the application for any of the prerogative orders of judicial review is dependent upon proof of the existence of all or any of the grounds of judicial review. If the court is satisfied that the any of these grounds exist it may well exercise its discretion in favour of the applicant and grant the application. The converse is true; where none of the grounds are demonstrated to exist, the court will certainly dismiss the application.
30.The question that then follows is; what are these grounds?
31.The grounds for judicial review were enunciated in the English case of Council of Civil Service Unions versus Minister for the Civil Service (1985) A.C. 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:
32.By “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.
33.By “irrationality” I mean what can by now be succinctly referred to as “Wednesbury unreasonableness” (Associated Provincial Picture Houses Ltd. v. Wednesbury Corporation [1948] 1 K.B. 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] A.C. 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.
34.I 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.”
35.These grounds of illegality, irrationality and procedural impropriety are ordinarily regarded as the traditional grounds for judicial review. As stated earlier in this judgment, 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.
36.The need to expressly state the grounds for judicial review has been codified in the Civil Procedure Rules. Oder 53 Rule 1(2) of these rules states in mandatory terms that the statement accompanying the application must contain, among other things, the grounds upon which the application is made. It reads as follows:
37.And Order 53 Rule 4(1) of the same rules states unambiguously that no grounds should be relied upon except those specified in the statement accompanying the application for leave.
38.Turning back to the applicant’s application, it is not apparent from the statement accompanying the application which of the grounds of judicial review the applicant is relying upon. They have neither been stated nor set out in precise, specific and unambiguous terms. What has been presented as grounds in the statutory statement is nothing more than the depositions made in the affidavit sworn in verification of the facts.
39.The closest that the applicant has come to in singling out the ground upon which the application is based is what he has stated in paragraph 12 of the “grounds” to the effect that:
40.This may well be a ground of illegality. However, considering that the applicant has not come out clearly to declare it as such, the court would be left to speculate whether, by this statement, the applicant also intended to refer to the other two traditional grounds of irrationality or illegality.
41.As I have stated elsewhere, the court cannot, and need not speculate on what is on the mind of any particular applicant because it is the applicant’s obligation, in the first place, to state categorically the ground or grounds upon which he seeks a judicial review court to intervene and impeach the administrative action in issue.
42.While reiterating the importance of stating grounds for judicial review in concise and precise terms Michael Fordham in his book, Judicial Review Handbook, at Paragraph 34.1 states as follows:
43.The ‘new order’ referred to in this passage is Order 53 of the Rules of the Supreme Court of England whose provisions are more or less in pari materia with our own Order 53 of the Civil Procedure Rules, 2010. The point is, however, clear that courts will not entertain applications where grounds have not been identified and accurately stated. Stating the grounds in precise terms is not, as it were, a matter of analytical nicety but it is a practical necessity.
44.Assuming the court was to give the applicant the benefit of doubt and proceed on the presumption that the applicant must, in its pleading, have been referring to all or any of the grounds of judicial review, I must state that I have not seen the evidence of such grounds in the respondent’s impugned decision.
45.The respondent considered both the applicant’s case and the interested party’s respective cases. It considered the applicant’s arguments that there were other pending suits over the subject and that there was no conviction on the criminal charges preferred against the applicant.
46.After considering all these issues, the respondent came to the conclusion that:
47.This was a ruling on the preliminary objection raised by the applicant against the debarment proceedings. The decision of the respondent on the substantive debarment proceedings read, in part, as follows:
48.The respondent before this court is a body corporate established under section 8 of the Public Procurement and Asset Disposal Act. Its mandate is clearly outlined under section 9 of the said Act and, in summary, involves monitoring, accessing and reviewing of the public asset and disposal systems. The Authority’s management is vested in the Public Procurement Regulatory Board under section 10 of the Act.
49.It is this Board that has the power under section 41 to debar a person from participating in procurement or asset disposal proceedings. The section provides thus;(1)The Board shall debar a person from participating in procurement or asset disposal proceedings on the ground that the person—(a)has committed an offence under this Act;(b)has committed an offence relating to procurement under any other Act or Law of Kenya or any other jurisdiction;(c)has breached a contract for a procurement by a public entity including poor performance;(d)has, in procurement or asset disposal proceedings, given false information about his or her qualifications;(e)has refused to enter into a written contract as required under section 135 of this Act;(f)has breached a code of ethics issued by the Authority pursuant to section 181 of this Act or the code of ethics of the relevant profession regulated by an Act of Parliament;(g)has defaulted on his or her tax obligations.(h)is guilty of corrupt or fraudulent practices; or(i)(i) is guilty of a serious violation of fair employment laws and practices.(2)Without limiting the generality of subsection (1) the Board may debar a person from participating in any procurement process if that person—(a)has breached the requirements of the tender securing declaration form in the tender documents; or(b)has not performed according to professionally regulated procedures.(3)The Authority, may also debar a person from participating in procurement or asset disposal proceedings—(a)on the recommendation of a law enforcement organ with an investigative mandate;(b)on grounds prescribed by the Authority in Regulations(4)A debarment under this section shall be for a specified period of time of not less than three years.(5)The procedure for debarment shall be prescribed by Regulations.
50.In reaching the impugned decision, the respondent was merely exercising its power under section 41 of the Act and it is clear from this provision of the law that commission of a crime under the Act is only one of the grounds upon which a person may be debarred. It therefore does not matter that the applicant has not been convicted of an offence under the Act. He could be debarred and indeed he was debarred on other grounds prescribed by the Act. Suffice it to say that there is no proof that in coming to the decision it did, the respondent acted ultra vires this provision of the law or any other provision in the Act for that matter.
51.The statement of grounds upon which the applicant’s application is purportedly based shows that all the applicant has done in the instant application is to escalate the same arguments which were presented before the respondent and upon which the respondent has made a determination. In other words, the applicant is challenging the merits of the decision rather than the process by which the decision was reached. The following averments in the statutory statement attest to this fact:
52.The Court cannot assume appellate jurisdiction and fault the respondent on what are, in my humble view, more of grounds of appeal than grounds of judicial review. As long as the process by which the decision was reached was consistent with the law, the merits of the decision of the respondent would be of little concern to this honourable court. This point was succinctly put in Chief Constable of the North West Police vs Evans (1982) 3 ALL ER 141 at 154 where it was held that:
53.It was held further in this case that:The remedy by way of judicial review under RSC…, vastly increased in extent, and rendered, over a long period in recent years, of infinitely more convenient access than that provided by the old prerogative writs and actions for a declaration, is intended to protect the individual against the abuse of power by a wide range of authorities, judicial, quasi-judicial, and …administrative. It is not intended to take away from those authorities the powers and discretions properly vested in them by law and to substitute the courts as the bodies making the decisions. It is intended to see that the relevant authorities use their powers in a proper manner…and not to substitute the opinion of the judiciary or of individual judges for that of the authority constituted by law to decide the matters in question. The function of the court is to see that lawful authority is not abused by unfair treatment and not to attempt itself the task entrusted to that authority by the law.” (Per Lord Hailsham at 1160E-H).
54.Thus, a judicial review court should not supplant a tribunal’s or administrative body’s decision with its own decision.
55.To the extent that the respondent’s decision is faulted on the grounds of its merits rather than the process by which it was arrived at, the application is misconceived and an abuse of the process of this honourable court.
56.For the reasons I have given, I am inclined to dismiss the applicant’s application. It is hereby dismissed with costs. Orders accordingly.
SIGNED, DATED AND DELIVERED ON 2 DECEMBER 2022NGAAH JAIRUSJUDGE
