Weekly Newsletter 024/2019



Kenya Law

Weekly Newsletter


Land acquired through compulsory acquisition does not revert back to its original owners if unutilized
Town Council of Awendo v Nelson O Onyango and 192 others
Supreme Court of Kenya
Petition Number 37 of 2014
D K Maraga, CJ & P; M K Ibrahim, S C Wanjala, N Njoki & I Lenaola, SCJJ
April 30, 2019
Reported by Ian Kiptoo
Download the Decision
Land Law - compulsory acquisition- rights of reversion- radicle title vis-à-vis fee simple title - where the Government utilized a certain portion of the land it compulsorily acquired-claim by the original owners that they had reversionary interests to the un-utilized portions – whether a proprietor whose land had been compulsorily acquired retained some reversionary interest in or, pre-emptive rights over the un-utilized portions - Constitution of Kenya, 2010, articles 40 and 68 (c) (ii); Constitution of Kenya, 1963 (Repealed), section 75; Land Acquisition Act (repealed), sections, 6 and 19 (1)
Land Law - compulsory acquisition- public purpose – where compulsorily acquired land remained un-utilized – where the repealed Constitution and Land Acquisition Act (repealed) remained silent on use of un-utilized compulsorily acquired land – guiding principles applicable to compulsorily acquired land -what amounted to un-utilized land that had been compulsorily acquired - how could land that had been compulsorily acquired but remained unutilized be used - what were the guiding principles applicable to land compulsory acquired
Land Law - compulsory acquisition - pre-emptive rights vis-à-vis reversionary interests - where compulsorily acquired land remained unutilized - what was the distinction between pre-emptive rights and reversionary interest in regards to compulsorily acquired land – Land Act, section 110 (2)

Brief Facts
The instant matter was an appeal where the appellants urged that the Court of Appeal erred in fact in finding that the suit land was not acquired for purposes of the expansion of the appellant; that it erred by reasserting the 1st to 13th respondents’ titles over the suit land, despite the said titles having extinguished upon completion of the process of compulsory acquisition by the government; that the impugned judgment by the 1st Appellate Court had the  effect of divesting the third party allottees (interested parties) of their property, including schools, hospitals, churches and financial institutions, in breach of articles 40, 48 and 50 (2) of the Constitution of Kenya, 2010 (Constitution)

Issues:
  1. Whether a proprietor whose land had been compulsorily acquired retained some reversionary interest in or, pre-emptive rights over the unutilized portions.
  2. What amounted to unutilized land that had been compulsorily acquired?
  3. How could land that had been compulsorily acquired but remained unutilized be used?
  4. What was the distinction between pre-emptive rights and reversionary interest in regards to compulsorily acquired land?
  5. What were the guiding principles applicable to land compulsorily acquired?
Relevant Provisions of the Law
Constitution of Kenya, 1963 (Repealed)
Section 75

(1) No property of any description shall be compulsorily taken possession of, and no interest in or right over property of any description shall be compulsorily acquired, except where the following conditions are satisfied:
 (a) the taking of possession or acquisition is necessary in the interest of defence, public safety, public order, public morality, public health, town and county planning or the development or utilization of property so as to promote the public benefits; and
 (b) the necessity thereof is such as to afford reasonable justification for the causing of hardship that may result to any person having an interest or right over the property; and
 (c) provision is made by a law applicable to that taking of possession or acquisition for the prompt payment of full compensation…”


Constitution of Kenya, 2010
 Article 40

 (3)“The State shall not deprive a person of property of any description, or of any interest in, or right over, property of any description, unless the deprivation-
 (a) results from an acquisition of land or an interest in land or a conversion of an interest in land, or title to land, in accordance with Chapter Five; or
 (b) is for a public purpose or in the public interest and is carried out in accordance with this Constitution and any Act of Parliament that:
 i. requires prompt payment in full, of just compensation to the person; and
 ii. allows any person who has an interest in, or right over, that property a right of access to a court of law.
 (4) Provision may be made for compensation to be paid to occupants in good faith of land acquired under clause (3) who may not hold title to the land.”


Land Act
Section 110

 (1) “Land may be acquired compulsorily under this Part if the Commission certifies, in writing, that the land is required for public purposes or in the public interest as related to and necessary for the fulfillment of the stated public purpose.”
 (2) “If, after land has been compulsorily acquired, the public purpose or interest justifying the compulsory acquisition fails or ceases, the Commission may offer the original owners or their successors in title pre-emptive rights to re-acquire the land, upon restitution to the acquiring authority the full amount paid as compensation.”


Land Acquisition Act (repealed)
Section 19

(1) “After the award has been made, the Commissioner shall take possession of the land by serving on every person in the land notice that on a specified day which shall not be later than sixty days after the award has been made, possession of the land and title the land will vest in the Government.”
(4) “Upon taking possession, the land shall vest in the Government absolutely free from encumbrances.”


Held:
  1. The suit land was compulsorily acquired by the Government of Kenya, pursuant to the provisions of section 75 of the Constitution of Kenya, 1963 (repealed) and section 6 (2) of the Land Acquisition Act 1968, (repealed). Further, the proprietors of the land, including the 1st to the 13th respondents, were fully compensated in accordance with the applicable law. The compulsory acquisition was actualized vide the two Gazette Notices No. 2996 of October 8, 1976 and No. 3737 of December 24, 1976. However, while it was clear that the parcels of land were acquired for a public purpose, what remained in contention was the
  2. Both purposes for which the various land parcels were acquired fell within the rubric of within the meaning of section 75 (1) of the repealed Constitution. Section 6 of the Land Acquisition Act (repealed) replicated the above provisions of the repealed Constitution. Therefore, on the face of the two Gazette Notices, the suit lands in question were acquired, on the one hand for and on the other hand, for
  3. The proper basis for determining the specific nature of the purpose for which the suit lands were acquired, was the language used in the two Gazette Notices. Towards that end, Gazette Notice No. 2996 stated that the specified parcels of land were to be acquired for the South Nyanza Sugar Scheme while Gazette Notice No. 3737 stated that the specified parcels were to be acquired for the South Nyanza Sugar Scheme (Awendo Township Expansion) in South Nyanza District.
  4. The Gazette Notices were distinct and referred to different parcels of land. Land title no. North [particulars withheld]1193 (Plot No. 1193) in respect of the 7th respondent was not on the list of parcels of land acquired by the two Gazette Notices. The tentative conclusion regarding the said title therefore was that it was never compulsorily acquired. In addition, land title No. North [particulars withheld] 46 (Plot No. 46) in respect of the 1st respondent and Land Title No. North [particulars withheld]/168 (Plot No. 168) in respect of the 13th respondent were acquired vide Gazette Notice No. 2996. A perusal of the record revealed the fact that some of the respondents, to wit, the 3rd, 9th, 10th, 11th and 12th were not the original proprietors of the parcels in question. However, they referred to themselves in their supporting affidavits as beneficial owners.
  5. A plain reading of Gazette Notice No. 2996 clearly indicated that the intention of acquiring the land parcels was for establishing the South Nyanza Sugar Scheme. That had to be taken to refer to all that it entailed to establish such a scheme, including the factory, sugar plantations, offices, plant and machinery and all necessary infrastructure. Towards that end, there was no dispute regarding the establishment of South Nyanza Sugar Scheme. As for Gazette Notice No. 3737, it was stated that the listed parcels were to be acquired for the South Nyanza Sugar Scheme (Awendo Township Expansion) in South Nyanza District. The operative words were the bracketed ones.
  6. The two Gazette Notices, although linked in material particulars, could not have been referring to the same purpose for the compulsory acquisition. The inclusion of the words Awendo Township Expansion had to be taken to mean that there was another purpose other than, but related to, the actual establishment of the South Nyanza Sugar Scheme. That other purpose was the expansion of the Awendo Township. The establishment of the South Nyanza Sugar Scheme within the vicinity of Awendo Township meant that the latter, had to be expanded to accommodate the functionality of the former. The need to expand the Township necessitated the further acquisition of extra land, for that purpose, as was clearly stated in the brackets. The words Awendo Township Expansion had to surely be taken to mean something; otherwise they would not have been included in Gazette Notice No. 3737.
  7. The purpose for which all that land, comprised in Gazette Notice No. 2996, i.e., the establishment of South Nyanza Sugar Scheme in South Nyanza, had been fully accomplished by the time of filing Civil Case No. 133 of 2005 at the High Court. That being the case, there were no unutilized portions of land in the block to which the said Gazette Notice applied.
  8. A reversion was that interest in land that survived the expiry or extinction of an estate in the said land. It was called a reversion because upon the extinction of the estate, that interest reverted to the person or entity from whose superior title the estate was originally created. An estate on the other hand, was a time bound bundle of rights over land or stated at common law, an estate was a time in the land or a land for a time. Thus a holder of a fee simple estate retained interest in that land for as a long as there would be an heir to inherit the same. Where no heir remained to inherit the estate, then the land reverted to the State.
  9. The State held a superior title to the land called the radical title. The fee simple estate also became extinguished upon a compulsory acquisition by the State in exercise of its powers of eminent domain. By the same token, in a landlord and tenant relationship, the tenant held the leasehold estate while the landlord retained the reversion which, upon the expiry of the leasehold, was surrendered back to the landlord, since the latter held a superior title from which the lease was created.
  10. The respondents did not retain any interests in the land, capable of protection or resuscitation by the law as provided for in section 19 (1) of the Land Acquisition Act (repealed). The respondents did not have any reversion in the acquired lands since whatever reversion that had existed, could only have been a reversion in favour of the State, and not vice versa. The suit lands all became vested in the Government of Kenya.
  11. For purposes of the Appeal, unutilized land referred to any residual portion of land which had been compulsorily acquired, but which remained unused after the realization of the public purpose for which it had been acquired. Neither the repealed Constitution, nor the Land Acquisition Act, provided any direction as to what should happen to land that remained unutilized after the public purpose for which it was compulsorily acquired became spent.
  12. Land which had been compulsorily acquired had to be used for the purpose for which it was acquired. If for example, after compulsorily acquiring land, the Government or any of its agencies proceeded to allocate the said land, to individuals or other entities, for their own private benefit, in total disregard of the public purpose, such allocation would not confer good title to the allottees.
  13. Under the law as it then stood, the original owners of compulsorily acquired land had no reversionary rights in that land. In Niaz Mohammed v Commissioner for Lands & 4 Others (1996) eKLR, it appeared to suggest that such land would legally revert to the original owners through equity. The fallback to equity was compelling, given that what was involved was land, a subject that unendingly continued to generate emotive disputes among all and sundry. Indeed, equity grew out of the interstices of common law rigidity. The doctrines that had catapulted it into the cosmos of law were themselves handmaidens of justice and fairness. But even equity, in all its splendor, followed the law, lest it be deformed, by judicial caprice or whim. Therefore, in the face of clear constitutional and legal provisions, that extinguished private title to compulsorily acquired land, not even equity could resuscitate such title to unutilized portions thereof.
  14. The public purpose, for which the land was compulsorily acquired, could have been spent, but the unutilized portions thereof remained public land. Therefore, such land as remained unutilized could only be applied to a public purpose, or be utilized to promote the public interest, even if the said interest was not such as had been originally envisaged. Unutilized portions of land, could in the instant case, be allocated to private entities, including those from whom the land was acquired, at a price, provided that, the land was to be put to such use as would promote the public interest.
  15. The provisions relating to the doctrine of eminent domain as were enshrined in article 40 of the Constitution of Kenya, 2010 (Constitution), and Part VIII, of the Land Act (sections 107 to 133), mirrored those of section 75 of the repealed Constitution, and section 6 of the Land Acquisition Act (repealed) with a few modifications. Article 68 (c) (ii) of the Constitution provided that Parliament would enact legislation to regulate the manner in which any land could be converted from one category to the other.
  16. Section 110 (2) of the Land Act introduced the concept of over compulsorily acquired land. Where the purpose justifying the compulsory acquisition then the original owners or their successors in title had the pre-emptive rights to re-acquire the land upon payment of the full amount received as compensation. However, a was not the same as The former arose, consequent upon the failure or cessation of the purpose justifying the compulsory acquisition; while the latter reposed in the holder of a superior title and became exercisable upon the expiry of an estate.
  17. It could not be said that the land over which the pre-emptive right of re-acquisition arose upon failure or cessation of the public purpose, was the same as unutilized land or portion of land that remained once the public purpose became spent. In the former case, there was a total failure of the public purpose, meaning that the acquired land could not be used as earlier envisaged. The wording of section 110 (2) of the Land Act was permissive (the Commission may offer) in the sense that the acquiring authority, was not necessarily barred from applying the land to another public purpose. However, should it decide to abandon the land to private purchase, then the original owners had the pre-emptive rights to re-acquire the land upon restitution of the full sum that was paid in compensation.
  18. The land to be re-acquired in the instant case was the whole as opposed to a portion thereof. That explained why the sum of money to be restituted by the original owners was the full amount paid in compensation. In the latter case, the public purpose had been realized, but the acquired land had not been utilized in full, leaving a portion thereof. In that instance, neither the original owners, nor their successors in title had pre-emptive rights to re-acquire the un-utilized portions.
  19. On the basis of the analysis, the following guiding principles were issued:
    1. where the Government, pursuant to the relevant constitutional and legal provisions, compulsorily acquires land, such land, would only be used for the purpose for which it was compulsorily acquired;
    2. the allocation of compulsorily acquired land, to private individuals or entities, for their private benefit, in total disregard of the public purpose or interest for which it was compulsorily acquired, would be incapable of conferring title to that land in favour of the allottees;
    3. a person whose land had been compulsorily acquired in accordance with the relevant constitutional and legal provisions did not retain any reversionary interest in the said land; and
    4. unutilized portions of compulsorily acquired land could be used for a different public purpose, or in furtherance of a different public interest, including the allocation of such portions to private individuals or entities, at the market price, in furtherance of such public interest.
  20. Consequently, flowing from the analysis and guiding principles:
    1. through the instrumentality of Gazette Notices Nos. 2996 and 3737 of 1976, all parcels of land whose land titles were listed respectively, were compulsorily acquired and vested in the Government of Kenya;
    2. the appellant (or its successor in title) held that land in trust for the residents of the area, and as the Implementing Agency of the public purpose for which the land was compulsorily acquired;
    3. The letter written by the Land Registrar, directing the appellant to re-survey the land and allocate the same to the original owners or their successors in title had no legal basis;
    4. the 1st and 13th respondents had no reversionary interest in the parcels of land listed in the two Gazette Notices, since titles thereto were extinguished through the compulsory acquisition of the same;
    5. the purpose for the acquisition of all those lands listed in Gazette Notice No. 3737 of 1976 (the suit land) was for the expansion of Awendo Township in South Nyanza District. Such expansion was necessitated by the establishment of South Nyanza Sugar Scheme, through Gazette Notice No. 2996;
    6. the land comprised in Gazette Notice No. 3737 was not unutilized land given the fact that the expansion of Awendo Township was an on-going process;
    7. the allocation of various parcels of land comprised within Gazette Notice No. 3737, at a price, to the interested parties, for the establishment of residential, commercial and other amenities such as churches, etc., was in furtherance of the expansion of Awendo Township; and
    8. by purchasing the said plots, and using them for residential, commercial and other purposes in consonance with the public interest, and in the absence of any proof of fraud on the part of the interested parties, the latter acquired valid title which could not be defeated by the claims of the respondents.
Petition of appeal allowed with no orders as to costs.
The 7th respondent would be fully compensated by the Government of Kenya for the loss of his Land Title No. North [particulars withheld]1193.
Kenya Law
Case Updates Issue 024/2019
Case Summaries

COMPANY LAW Rights and obligations vested or acquired under a written law are not affected by the repeal in whole or in part of that written law and/or another written law.

Christopher Dennis Wilson v Registrar of Companies & 2 others [2019] eKLR
Miscellaneous Civil Application 130 of 2016
High Court at Mombasa
PJO Otieno, J
April 1, 2019
Reported by Beryl Ikamari & Mathenge Mukundi

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Company Law-register of companies-restoration of companies to the register –period within which to apply for the restoration of a company to the register of companies-effect of the reduction of the period allowed for applications for the restoration of companies from 10 years to 6 years under the Companies Act 2015 where a company was dissolved before the enactment of the Companies Act 2015- whether the rights acquired under the repealed Companies Act were extinguished by the Companies Act 2015-Companies Act (No. 17 of 2015), sections 895, 912 & 917.
Jurisdiction-jurisdiction of the High Court-jurisdiction of the High Court as related to the restoration of a company to the register of companies-where statute provided for applications for the restoration of companies to the register of companies to be lodged before the registrar of companies-whether the Court had jurisdiction to entertain an application where the applicant had not exhausted the statutory dispute resolution mechanisms-Companies Act (No. 17 of 2015), section 912.

Brief facts:
The applicant, the shareholder and contributory of the company, approached the Court and filed an application under section 339 of the repealed Companies Act as well as under sections 895, 912 and 917 of the Companies Act 2015. He sought one substantive order-that the court be pleased to restore the name of Kilifi Plantation Properties to the register of companies. The basis of the application was that the company was dissolved by the Registrar of Companies pursuant to its statutory powers under the repealed Companies Act through a Gazette Notice dated November 12, 2010. The applicant only became aware of the dissolution on January 18, 2018 and thereafter moved with speed and filed the application in May 2018.
The applicant wanted the company restored to the register as the company continued to own assets, had issued long term leases to different individuals, including the interested parties, who had invested heavily in developing the same and thus stood to suffer irreparable loss and damage if it was dissolved. The application sought the Court’s intervention and to invoke the inherent powers of the Court to do justice and avoid injustice to ensure that nobody was unjustly prejudiced.

Issues:

  1. Whether the reduction of the period allowed for applications for restoring companies into the register of companies from 10 to 6 years under Companies Act 2015 made an application for restoration, which was filed after 6 years, statute barred.
  2. Whether the rights acquired under the repealed Companies Act were extinguished by the enactment of the Companies Act 2015.
  3. Whether the Companies Act 2015 had a retrospective effect and could apply to acts done before its enactment.
  4. Whether the Court had jurisdiction to entertain the application where the applicant had not exhausted the statutory dispute resolution mechanisms provided in the Companies Act 2015. Read More..

Held :

  1. The applicant invoked not only the overriding objectives of the Court and the inherent powers of the Court but also the provisions of the repealed statute as well as the new statute as vesting in the Court, the powers to make an order for the restoration sought. The undisputed fact was that while the repealed statute granted to the applicant a period of 10 years to seek restoration, the amendment by re-enactment reduced that period to a period of six (6) years. The matter was filed in 2018 and the applicable provision was the Companies Act 2015 and not the repealed one. However, there were rights vested and accrued under the old statute that had to be respected, honoured and accorded protection.
  2. The rights and obligations accrued, vested and incurred under a repealed statute would not be affected or removed by the repeal and/or re-enactment. Section 23(3)(c) of the Interpretation and General Provisions Act provided that where a written law repealed in whole or in part another written law, unless a contrary intention appeared, the repeal would not affect a right, privilege, obligation or liability acquired, accrued or incurred under the written law so repealed. That was the statutory provision that helped interpret whether a statute had retrospective effect. Indeed, a chose in action under article 40 of the Constitution would be based on protection from arbitrary deprivation of property. Under section 917 of the Companies Act 2015, there was no clear intention that Parliament intended that a right to seek restoration of a dissolved company within 10 years from the date of dissolution be extinguished.
  3. The general rule was that a retrospective operation was not to be given to a statute so as to impair an existing right or obligation, otherwise than as regards matter of procedure. Objection to such retrospective application would be more strongly felt in respect of ex post facto imposition of novel penalties, and of arbitrary creation of new crimes, for it shocked the most elementary sense of justice to punish anybody, as an afterthought, for doing that which was lawful when he did it. The rule chiefly prevailed where the enactment would prejudicially affect vested rights, or the legality of past transactions or impair contracts. Every statute which took away or impaired vested rights acquired under existing laws, or created a new obligation, or imposed a new duty, or attached a new disability in respect of transactions or considerations already past, had to be presumed to be intended not to have a retrospective operation.
  4. It was not the case that Parliament had no authority to pass a retrospective legislation. That power was clearly with the legislature but the intention had to be clear and unambiguous from the words of the statute. There was no retrospective application shown to have been intended by Parliament in replacing the provisions of section 339(6) of the repealed Companies Act with section 917 of the Companies Act 2015. The rights vested upon the applicant to seek restoration within 10 years were not affected by the repeal and the application as filed was not statute barred but was made within time.
  5. For the Court’s jurisdiction to be ousted there had to be a clear, firm and unequivocal provision in an alleged ouster clause. Ouster clauses could be categorized as constitutional or statutory. Where they were statutory ouster clauses, the statute would confer exclusive jurisdiction on the relevant body to determine the relevant matter. In such a case, the relevant body had to act under the statute and not outside it. The courts had a conventional inclination to interpret statutes in a manner that precluded acceding of jurisdiction of other agencies. There were proper instances of jurisdiction being conferred upon other agencies by the legislature but when the legislature did so, it had an obligation to express itself in a clear, firm and unequivocal language.
  6. Section 912 and 917 of the Companies Act, 2015 had no clear, firm and unequivocal intention to oust the jurisdiction of the Court. Indeed, a party affected by the dissolution of a company by the Registrar of Companies had the option to either go to the Registrar first or just approach the Court directly. The primary purpose of a court system since the invention of equitable principles was that the Court should not give succour to the infringement of a right without legal recourse. Under the letter and dictates of the Constitution, the situation was even clearer. The Court was mandated to administer justice in a manner that promoted and protected the principles of the Constitution. One of the principles of the Constitution was entrenchment and safeguard of the bill of rights which included the right to property.
  7. It was demonstrated without rebuttal that the company continued to be the registered owner of land property, on which it had granted long term leases to the interested parties and others. The existence of such property rights which would inevitably be dissipated, unless the restoration was ordered, was strong enough for the Court to order restoration so that the company and interested parties concluded the process to have the leases registered and certificates thereof issued. The Court would always resort to its inherent powers, which vest in it at all times by its own nature to do justice.

Application allowed.
Orders-

  1. The company to be restored onto the register of companies but on terms that it would submit all the un-submitted returns of its operations since 2010 to date within 30 days.
  2. Each party to bear its own costs.
JUDICIAL REVIEW Exceptional circumstances under which a tender validity period could be extended.

Republic v Public Procurement Administrative Review Board; Shenzhen Instrument Co. Limited & another (Interested Party) Ex parte Kenya Power and Lighting Company Limited
Miscellaneous Application 207 of 2018
High Court at Nairobi
J M Mativo, J
February 26, 2019
Reported by John Ribia & Flora Weru

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Judicial Review-principles of judicial review - applicability of the principles of judicial review - applicability of the principles of natural justice, procedural fairness, legitimate expectation, rationality, reasonableness, ultra vires and intra vires decisions-applicability of judicial review as prescribed by the Constitution of Kenya, 2010 vis a vis the Fair Administrative Action Act - what was the importance of pleading the principles of judicial review in order to institute judicial review proceedings – what was the threshold to be met in pleading the principles of judicial review in a judicial review proceedings
Conflict of Laws-choice of law-choice of law in international agreements-where there was a conflict between Kenyan procurement laws and the terms of International Agreements to which Kenya was a party to-which law took precedence when there was a conflict between Kenyan procurement laws and the terms of international agreements to which Kenya was a party to
Procurement Law-tenders-tender validity period-extension of tender validity period-circumstances for extension of tender validity period-exceptional circumstances-what constituted exceptional circumstances under which a tender validity period could be extended
Judicial Review – remedies of judicial review – certiorari, prohibition and declaratory orders- circumstances to be considered before granting judicial review remedies–where the impugned decision involved international parties and was governed by an international agreement-whether judicial review remedies could be granted where the impugned decision involved international parties and was governed by an international agreement
Civil Practice and Procedure- suits - parties to a suit- interested party- participation of an interested party - extent of participation-introduction of new issues-where the new issues had not been raised by the principal parties - whether an interested party could raise new issues not presented by principle parties for determination by the Court.

Brief facts:
On February 2, 2017, the ex parte applicant published an on line invitation for Tender No. KPI/6A.1/PT/13/16/A58 Procurement of Design, Supply, Installation and Commissioning of Advanced Metering Infrastructure (AMI) System to support Revenue Recovery and Protection Programs (RPP), (herein after referred to as the Tender). On February 9, 2017 it advertised the Tender in the Daily Nation and the Standard Newspapers. The submission dead line was April 4, 2017. Various bidders presented their respective bids. The bids were opened on May 12 2017 in the presence of the bidders or their representatives. The ex parte applicant stated that the tender was donor funded, hence, it was subject to the World Bank's Guidelines; Procurement of Goods, works and Non-Consulting Services under IBRID Loans and IDA Credits & Grants by World Bank Borrowers (herein after referred to as the World Bank Guidelines). Owing to the complexity of the tender and in accordance with the World Bank Guidelines, the ex parte applicant extended the Tender Validity Period for at least seven days vide e-mails which extensions were communicated to all the bidders.
It was further averred that during the evaluation, 5 bids out of the 14 submitted were found to be non-responsive, among them the first Interested Party's while the remaining 5 were subjected to Commercial Evaluation where they were checked for errors, deviations or omissions and corrections. The ex parte applicant also stated that this was followed by a detailed evaluation for the lowest ranked 6 bidders whereupon the 2nd Interested Party emerged the successful bidder and all the parties were notified vide a letter dated April 3, 2018. The ex parte applicant asserted that despite having adhered to the procurement laws, regulations and procedures, the first Interested Party challenged the award of the Tender to the second Interested Party before the respondent with the consequence that the Tender was eventually annulled vide a decision dated May 4, 2018 delivered to the ex parte applicant on May 9, 2018 in which the Respondent directed the ex parte applicant to re-advertise the tender within 14 days of the decision. As a consequence, the ex parte applicant averred that it was losing immense public funds. The ex parte applicant aggrieved by the respondent’s decision filed the instant application seeking judicial review remedies

Issue:

  1. What constituted exceptional circumstances under which a tender validity period could be extended?
  2. What was the applicability of the following principles of judicial review:
    1. grounds of judicial review:
      1. natural justice;
      2. procedural fairness;
      3. legitimate expectation;
      4. rationality;
      5. reasonableness; and
      6. ultra vires and intra vires decisions;
    2. judicial review as prescribed by the Constitution of Kenya, 2010 and the Fair Administrative Action Act.
  3. When there is a conflict between Kenyan procurement laws and the terms of International Agreements to which Kenya was a party to, which took precedence?
  4. Whether an interested party could raise new issues not presented by principle parties for determination by the Court.Read More..

Relevant Provisions of the Law
Constitution of Kenya, 2010;
Article 47;
(1) Every person has the right to administrative action that is expeditious, efficient, lawful, reasonable and procedurally fair.
(2) If a right or fundamental freedom of a person has been or is likely to be adversely affected by administrative action, the person has the right to be given written reasons for the action.
(3) Parliament shall enact legislation to give effect to the rights in clause (1) and that legislation shall—

(a) provide for the review of administrative action by a court or, if appropriate, an independent and impartial tribunal; and
(b) promote efficient administration

Public Procurement and Asset Disposal Act
Section 6(1)
Subject to the Constitution, where any provision of this Act conflicts with any obligations of the Republic of Kenya arising from a treaty, agreement or other convention ratified by Kenya and to which Kenya is party, the terms of the treaty or agreement shall prevail

Section 167 (1);
(1) Subject to the provisions of this Part, a candidate or a tenderer, who claims to have suffered or to risk suffering, loss or damage due to the breach of a duty imposed on a procuring entity by this Act or the Regulations, may seek administrative review within fourteen days of notification of award or date of occurrence of the alleged breach at any stage of the procurement process, or disposal process as in such manner as may be prescribed.

Fair Administrative Act
Section 4;
(1) Every person has the right to administrative action which is expeditious, efficient, lawful, reasonable and procedurally fair.
(2) Every person has the right to be given written reasons for any administrative action that is taken against him.

a) Where an administrative action is likely to adversely affect the rights or fundamental freedoms of any person, the administrator shall give the person affected by the decision—

a) prior and adequate notice of the nature and reasons for the proposed administrative action;
b) an opportunity to be heard and to make representations in that regard;
c) notice of a right to a review or internal appeal against an administrative decision, where applicable;
d) a statement of reasons pursuant to section 6;
e) notice of the right to legal representation, where applicable;
f) notice of the right to cross-examine or where applicable; or
g) information, materials and evidence to be relied upon in making the decision or taking the administrative action.

(4) The administrator shall accord the person against whom administrative action is taken an opportunity to—

a) attend proceedings, in person or in the company of an expert of his choice; (b) be heard; (
b) cross-examine persons who give adverse evidence against him; and
c) (d) request for an adjournment of the proceedings, where necessary to ensure a fair hearing.

(5) Nothing in this section shall have the effect of limiting the right of any person to appear or be represented by a legal representative in judicial or quasi-judicial proceedings.
(6) Where the administrator is empowered by any written law to follow a procedure which conforms to the principles set out in Article 47 of the Constitution, the administrator may act in accordance with that different procedure

Section 7(2) (a) (i)
A court or tribunal under subsection (1) may review an administrative action or decision, if— the person who made the decision— was not authorized to do so by the empowering provision.

Held :

  1. A decision suffered from procedural impropriety if in the process of its making the procedures prescribed by statute were not followed or if the rules of natural justice were not adhered to. Decision makers had to act fairly in reaching their decisions. The principle applied solely to matters of procedure, as opposed to considering the substance of the decision reached.
  2. There were three broad bases on which a decision maker could owe a duty to exercise its functions in accordance with fair procedures:
    1. legislation or another legal instrument which gave a decision making power could impose a duty to follow specific procedures. The requirements relating to procedure contained in the statute or other instrument had to be complied with. However, failure to comply with required procedures did not automatically mean that the decision which followed was invalid. The courts took a range of factors into account in deciding whether or not to nullify a decision.
    2. No-one could be the judge in his or her own cause. That struck at decision making where the decision maker was connected with the party to the dispute or the subject matter. Justice should not only be done, but should be seen to be done.
    3. No person against whom an adverse decision could be taken should be denied a fair hearing to allow them to put their side of the case. What constituted a fair hearing depended on the particular circumstances of the case. Those included the character of the decision-making body, the kind of decision it had to make and the statutory or other framework in which it had to work.
    4. Statutes often required that decisions made under them to be supported by reasons.
  3. Procedural impropriety generally encompassed two things: procedural ultra vires, where administrative decisions were challenged because a decision-maker had overlooked or failed to properly observe statutory procedural requirements; and common law rules of natural justice and fairness. Failure by an administrative tribunal to observe procedural rules that were expressly laid down in the legislative instrument by which its jurisdiction was conferred, even where such failure did not involve any denial of natural justice, was a form of procedural impropriety.
  4. The common law rules of natural justice consisted of two pillars: impartiality. Nemo judex in causa sua (the rule against bias) – and fair hearing, the right to be heard, or audi alteram partem (hear the other side). Public authorities had a duty to act fairly rather than a duty to natural justice. One aspect of such a duty was the obligation on authorities in some cases to give effect to procedural legitimate expectations. Those were underpinned by the notion that a party that was or would be affected by a decision could expect that s/he would be consulted by the decision-maker before the decision was taken.
  5. Judicial Review of administrative action on the basis of procedural impropriety had undergone a rather remarkable transformation. The courts, using the language of natural justice and, more recently and more dramatically, fairness, had brought about a situation in which a broad range of statutory authorities were subject to the observance of at least a modicum of procedural decency. A decision that was against natural justice did not mean merely that it was against evidence or wrong in law; it meant that the decision was one that the person appealing had not had their case properly considered by the Judge who decided it.
  6. However erroneous the judgment or a decision could be in law or whatever injustice that erroneous judgment or decision could inflict, the erroneousness or injustice of the judgment or decision did not make the judgment contrary to natural justice. A decision contrary to natural justice was where the presiding decision maker denied a litigant some right or privilege or benefit to which he was entitled to in the ordinary course of the proceedings, as for instance refusing to allow a litigant to address the Court, or where he refused to allow a witness to be cross-examined, or cases of that kind.
  7. Procedurally, fairness had received a constitutional seal of approval. Article 47 of the Constitution codified every person's right to fair administrative action that was expeditious, efficient, lawful, reasonable and procedurally fair. Further there was a right to be given reasons for any person who had been or was likely to be adversely affected by administrative action. Each of those prescriptions fit the recognized grounds for judicial review of administrative actions.
  8. Natural Justice had assumed the importance of being an essential inbuilt component of the mechanism, through which decision making process passed in the matters touching the rights and liberty of the people. It was a procedural requirement. It ensured a strong safeguard against any Judicial or administrative; order or action, adversely affecting the substantive rights of the individuals. Those whose duty it was to decide had to act judicially. They had to deal with the question referred to them without bias and they had to give to each of the parties the opportunity of adequately presenting the case made. The decision had to come to the spirit and with the sense of responsibility of a tribunal whose duty it was to mete out justice
  9. The applicability of principles of natural justice was not dependent upon any statutory provision. The principle had to be mandatorily applied irrespective of the fact as to whether there was any such statutory provision or not. Where a statute authorized interference with properties or other rights and was silent on the question of hearing, the Courts would apply rule of universal application and founded on principles of natural justice.Principles of natural justice operated as implied mandatory requirements, non-observance of which invalidated the exercise of power.
  10. The constitution recognized a duty to accord a person procedural fairness or natural justice when a decision was made that affected a person’s rights, interests or legitimate expectations. It was a fundamental rule of the common law doctrine of natural justice expressed in traditional terms that when an order was made which would deprive a person of some right or interest or the legitimate expectation of a benefit, he was entitled to know the case sought to be made against him and to be given an opportunity of replying to it.
  11. Review power of the Court was no longer grounded in the common law, and therefore susceptible to being restricted or ousted by legislation. Instead the Constitution had conferred fundamental rights to administrative justice and through the doctrine of constitutional supremacy prevented legislation from infringing on those rights. Essentially, the clause had the effect of constitutionalizing what had previously been common law grounds of Judicial Review of administrative action. A challenge to the lawfulness, procedural fairness or reasonableness of administrative action, or adjudication of a refusal of a request to provide reasons for administrative actions involved the direct application of the Constitution.
  12. Procedural fairness contemplated by article 47 and the Fair Administrative Action Act demanded a right to be heard before a decision affecting ones right was made. Whether or not a person was given a fair hearing of his case would depend on the circumstances and the type of the decision to be made. The minimum requirement was that the person got the chance to present his case.
  13. The standards of fairness were not immutable. They could change with the passage of time, both in the general, and in their application to decisions of a particular type. The principles of fairness were not to be applied by rote identically in every situation. What fairness demanded was dependent on the context of the decision, and that was to be taken into account in all its aspects.
  14. The courts looked at all the circumstances of the case to determine how the demands of fairness should be met. The range of procedural protection would vary, depending on the context, with greater protections in some contexts rather than others. Courts had also used fairness as an explanation of other grounds of review. The Courts had also used fairness as the explanatory basis for reviewing mistakes of fact. Courts also used fairness to rationalize judicial review of decisions based on wrongful or mistaken assessments of evidence. However, in all of the above contexts, fairness had operated as a conclusion or explanatory norm of the main ground for judicial review (for example, illegality or substantive legitimate expectations) rather than as the primary norm per se by which the relevant administrative decision was judged.
  15. Section 2 of the Public Procurement and Asset Disposal Act (the Act) defined a candidate to mean a person who had obtained the tender documents from a public entity pursuant to an invitation notice by a procuring entity. Thus a candidate meant any supplier seeking an invitation to take part in a restricted or a negotiated procedure or the competitive dialogue. The 1st Interested Party was a candidate who participated in the tender process as a partner in a consortium and above all was granted a power of Attorney to conduct business relating to the tender in question on behalf of the consortium. Such business included filing a Request for Review. The ex-parte applicant's argument was legally flawed and unsustainable. It was not supported by the law. The 1st Interested Party had the locus standi to file the Request for Review.
  16. The argument that the ex-parte applicant was not afforded a hearing was not supported by the record. The ex-parte applicant was represented by its Manager, Legal Services and an advocate.
  17. Courts generally granted tribunals a degree of latitude when it came to dealing with evidence. The weighing of various pieces of evidence was generally a matter for the Tribunal, and merely to ignore relevant material did not establish jurisdictional error. There was no obligation on decision makers to refer to every piece of evidence and every contention made by an applicant in their written reasons. Inferences should not be drawn that an issue or evidence had been overlooked simply because a piece of evidence was not expressly discussed in the course of the reasons for decision.
  18. A justification sometimes offered by courts on review for leaving matters of facts/evidence to tribunals was the advantage that decision-makers had over the supervising courts in relation to evaluating the evidence and assessing credibility. But if a court on review regarding a tribunal’s fact-finding methodology was deficient, the Court would be disposed to intervene. None, the less, courts were reluctant to become involved in factual and evidentiary controversies. This was consistent with the proper limits on Judicial Review that required courts not to intrude upon the merits of the decision. The respondent made a final on the Interested Party's locus standi. Inviting the Court to find otherwise on the same issue was a merit review.
  19. Judicial intervention was posited on the idea that the objective was to ensure that the agency did remain within the area assigned to it by Parliament. If the agency was within its assigned area then it was prima facie performing the tasks entrusted to it by the legislature and hence not contravening the will of Parliament, then a court would not interfere with the decision.
  20. The task for the courts in evaluating whether a decision was illegal was essentially one of construing the content and scope of the instrument conferring the duty or power upon the decision-maker. The instrument would normally be the Constitution, a statute or delegated legislation. The courts when exercising the power of construction were enforcing the Rule of Law, by requiring public bodies to act within the four corners of their powers or duties. They were also acting as guardians of Parliament’s will, seeking to ensure that the exercise of power was in accordance with the scope and purpose of Parliament’s enactments.
  21. Determining whether a precondition was or was not a jurisdictional fact was a question of statutory interpretation. If the statutory construction led to the conclusion that Parliament intended that the factual reference could only be satisfied by the actual existence (or non-existence) of the fact or facts’, the review court was required to give effect to that intention by inquiry into whether the fact or facts existed. The ex parte applicant's argument that the respondent failed to consider the question of jurisdiction lacked legal basis and had to fail. Reason being, first, the respondent properly applied its mind to the question of locus standi of the 1st Interested Party. The respondent acted intra vires in arriving at the decision. The ex parte applicant had not demonstrated procedural impropriety or breach of the rules of natural justice or unfairness or ultra vires.
  22. A simple computation of time showed that the request for review was filed within time. That was consistent with the wording of section 167(1) of the Act which provided that a candidate or a tenderer, who claimed to have suffered or risked suffering, loss or damage due to the breach of a duty imposed on a procuring entity by the Act or the Regulations, could seek administrative review within fourteen days of notification of award or date of occurrence of the alleged breach at any stage of the procurement process, or disposal process as in such manner as could be prescribed.
  23. Clause 2.57 of the World Bank Guidelines provided for extension of validity of bids. The tender validity period was extended up to seven times. None of the parties raised any objection to the extensions. All the parties were in agreement that the World Bank Guidelines applied to the tender in question. All the parties were in agreement that the Tender was donor funded. Section 11 entitled Bid Data Sheet at paragraph ITB 2.1 defined the Borrower as the Government of Kenya. It was trite that the contract was donor funded. All those documents were on record during hearing of the Request for Review. The Respondent's finding that there was no evidence before it to support the argument that the World Bank Guidelines applied was not supported by the material before it.
  24. Section 6(1) of the Act provided that subject to the Constitution, where any provision of the Act conflicted with any obligations of the Republic of Kenya arising from a treaty, agreement or other convention ratified by Kenya and to which Kenya was party, the terms of the treaty or agreement would prevail. Clause 2.57 provided for extension of validity of bids. Section 6(1) provided that the terms of the agreement prevail over the provisions of the Act. It followed that the extension in question was valid and in conformity with the World Bank Guidelines.
  25. The Guidelines or even legislation could not go into details of prescribing what amounted to special circumstances. That was because it was not possible to draw a closed list. It was the duty of courts of justice to try to get at the real intention of the parties or legislation by carefully attending to the whole scope of the documents or the legislation. The meaning and intention of the Legislature or the parties to the document had to govern. The meaning was to be ascertained not only from the phraseology of the document or legislation, but also by considering its nature, its design and the consequences which would follow from construing it in one way or the other.
  26. What constituted exceptional circumstances depended on the facts of each case. The following points were relevant:-
    1. what was ordinarily contemplated by the words exceptional circumstances was something out of the ordinary and of an unusual nature; something which was accepted in the sense that the general rule did not apply to it; something uncommon, rare or different.
    2. To be exceptional the circumstances concerned had to arise out of, or be incidental to, the particular case.
    3. Whether or not exceptional circumstances existed was not a decision which depended upon the exercise of a judicial discretion: their existence or otherwise was a matter of fact which the Court had to decide accordingly.
    4. Depending on the context in which it was used, the word exceptional had two shades of meaning: the primary meaning was unusual or different; the secondary meaning was markedly unusual or specially different.
    5. Where, in a statute, it was directed that a fixed rule should be departed from only under exceptional circumstances, effect would, generally speaking, best be given to the intention of the Legislature by applying a strict rather than a liberal meaning to the phrase, and by carefully examining any circumstances relied on as allegedly being exceptional. The context was essential in the process of considering what constituted exceptional circumstances.
  27. There was no definition of exceptional circumstances in any Kenyan statute. Exceptional circumstances were circumstances that were out of the ordinary and that rendered it inappropriate for the Court to require the tender process to proceed. The circumstances had to be such as to require the tender validity period to be extended. Exceptional circumstances defied definition, they were context sensitive, hence, where proceeding with the tender would render the process untenable or defeat the entire process, the Court would be inclined to allow the extension.
  28. What constituted exceptional circumstances depended on the facts and circumstances of the case and the nature of the administrative action at issue. Where proceeding with the tender process would be futile, a court could find that exceptional circumstances existed and permit the extension. The need for the circumstances of the case to be exceptional meant that those circumstances had to be well outside the normal run of circumstances found in cases generally. The circumstances did not have to be unique or very rare but they did have to be truly an exception rather than the rule. The extensions were not objected to by the parties; hence, it was not necessary for the parties to cite the reasons for the extension for the court to determine whether or not they were exceptional. Had the Review Board properly addressed its mind to the provisions of the tender documents which expressly provided that the tender was governed by World Bank Guidelines as read with section 6(1) of the Act, it could have arrived at a different conclusion, which was, the World Bank Guidelines prevailed over the provisions of the Act. It followed that the extensions of the tender validity period were valid.
  29. A procedural legitimate expectation rested on the presumption that a public authority would follow a certain procedure in advance of a decision being taken. In adjudicating legitimate expectation claims the court followed a two-step approach. First, it asked whether the administrator’s actions created a reasonable expectation in the mind of the aggrieved party. If the answer to that question was affirmative, the second question was whether that expectation was legitimate. If the answer to the second question was equally affirmative, then the court would hold the administrator to the representation; that was to enforce the legitimate expectation. The first step in the analysis had both an objective and a subjective dimension. It was firstly asked whether a reasonable expectation of a certain outcome was created. The representation itself had to be precise and specific and importantly, lawful. Once a reasonable expectation existed the administrator was required to act in accordance with that expectation, except if there were public interest considerations which outweighed the individual’s expectation.
  30. The requirements for the existence of a procedural legitimate expectation included:-
    1. that there had to be a representation which was clear, unambiguous and devoid of relevant qualification;
    2. that the expectation had to be reasonable in the sense that a reasonable person would act upon it;
    3. that the expectation had to have been induced by the decision-maker; and
    4. that it had to have been lawful for the decision-maker to make such representation.

    If such an expectation existed it would be incumbent on the administrator to respect it and afford the individual holding that expectation due procedure before the expectation was disappointed. Failing such procedure, the individual could approach a court to review the administrator’s actions on the ground of procedural unfairness. If the Court found that a legitimate expectation did in fact exist, it would ordinarily invalidate the administrative action and refer the matter back to the decision-maker to deal with it in a procedurally fair manner.

  31. The alleged expectation could not be said to be devoid of qualification. It failed the first test stated above. That was because the ex-parte applicant participated in the proceedings. It was afforded an opportunity to be heard and argued its case. It was aggrieved by the decision, hence, the instant proceedings. There was nothing to demonstrate that the respondent violated the ex-parte applicant’s right to legitimate expectation. The claim for alleged violation of legitimate expectation failed.
  32. An interested party was not a principal party in the proceedings. The issues to be determined by the Court were those arising from the pleadings presented by the principal parties. The Interested Party could only participate by assisting either of the parties or making submissions to help Court. In every case, whether some parties were enjoined as Interested Parties or not, the issues to be determined by the court would always remain the issues as presented by the principal parties, or as framed by the Court from the pleadings and submissions of the principal parties. An interested party could not frame its own fresh issues, or introduce new issues for determination by the Court. One of the principles for admission of an Interested Party was that such a party had to demonstrate that s/he had a stake in the matter before the Court. That stake could not take the form of an altogether a new issue to be introduced before the Court. The 2nd Interested Party could not properly raise new issues which were never raised before the Review Board. It would be prejudicial to the respondent and the 1st Interested Party since they would not have the opportunity to challenge the issues.
  33. The ex-parte applicant had not demonstrated that the Respondent acted ultra vires its statutory mandate. Simply put, the applicant had not demonstrated illegality. There was nothing to suggest that the decision was either unreasonable or irrational. Rationality, as a ground for the review of an administrative action was dealt with in section 7(2)(a)(i) of Fair Administrative Action. The test for rationality was the question whether a decision was rationally related to the purpose for which the power was given calls for an objective enquiry. Otherwise a decision that, viewed objectively, was in fact irrational, could pass muster simply because the person who took it mistakenly and in good faith believed it to be rational. Such a conclusion would place form above substance and undermine an important constitutional principle. In applying the test, the reviewing Court would ask: was there a rational objective basis justifying the connection made by the administrative decision-maker between the materials made available and the conclusion arrived at.
  34. Reasonableness, as a ground for the review of an administrative action was dealt with in section 7(2)(k) of the Fair Administrative Action Act. A court or tribunal had the power to review an administrative action if the exercise of the power or the performance of the function authorised by the empowering provision, in pursuance of which the administrative action was purportedly taken, was so unreasonable that no reasonable person could have so exercised the power or performed the function. The simple test used throughout was whether the decision in question was one which a reasonable authority could reach. The converse was described as conduct which no sensible authority acting with due appreciation of its responsibilities would have decided to adopt. Whatever the rubric under which the case was placed, the question reduced to whether the decision maker had struck a balance fairly and reasonably open to him.
  35. Review by a court of the reasonableness of decision made by another repository of power was concerned mostly with the existence of justification, transparency and intelligibility within the decision-making process but also with whether the decision fell within a range of possible, acceptable outcomes which were defensible with respect to the facts and law. Differently stated, the following propositions could offer guidance on what constituted unreasonableness:-
    1. Wednesbury unreasonableness was the reflex of the implied legislative intention that statutory powers be exercised reasonably;
    2. that ground of review would be made out when the Court concluded that the decision fell outside the area of decisional freedom which that legislative assumption authorized outside the range within which reasonable minds could differ; and
    3. the test of unreasonableness was whether the decision was reasonably open to the decision-maker in the circumstances of the case. To say that the decision was not reasonably open was the same as saying that “no reasonable decision maker” could have made it.
  36. The legal standard of reasonableness had to be the standard indicated by the true construction of the statute. It was necessary to construe the statute because the question to which the standard of reasonableness was addressed was whether the statutory power has been abused. Legal unreasonableness comprised any or all of the following; specific errors of relevancy or purpose; reasoning illogically or irrationally; reaching a decision which lacks an evident and intelligible justification such that an inference of unreasonableness can be drawn, even where a particular error in reasoning cannot be identified; or giving disproportionate or excessive weight — in the sense of more than was reasonably necessary — to some factors and insufficient weight to others.
  37. There was nothing to show that a reasonable body, faced with the same set of facts and the law would have arrived at a different conclusion. The ex-Parte applicant has not demonstrated that the decision was tainted with unreasonableness or irrationality.
  38. The Court’s role remained strictly supervisory. It was concerned with determining whether there had been a lawful exercise of power having regard, in particular, to the terms, scope and purpose of the statute conferring the power. In circumstances where reasonable minds could differ about the outcome of, or justification for, the exercise of power, or where the outcome fell within the range of legally and factually justifiable outcomes, the exercise of power was not legally unreasonable simply because the court disagreed, even emphatically, with the outcome or justification. If there was an evident, transparent and intelligible justification for the decision or if the decision was within the area of decisional freedom of the decision-maker, it would be an error for the Court to overturn the decision simply on the basis that it would have decided the matter differently.
  39. Judicial intervention in Judicial Review matters was limited to cases where the decision was arrived at arbitrarily, capriciously or mala fide or as a result of unwarranted adherence to a fixed principle or in order to further an ulterior or improper purpose, or where the functionary misconceived the nature of the discretion conferred upon him and took into account irrelevant considerations or ignored relevant ones; or where the decision of the functionary was so grossly unreasonable as to warrant the inference that he had failed to apply his mind to the matter.
  40. A Judicial Review court ought to be slow to substitute its own decision solely because it did not agree with the permissible option chosen by the body. Where a body was granted wide decision-making powers with a number of options or variables, a Judicial review court could not interfere unless it was clear that the choice preferred was at odds with the law. If the impugned decision lay within a range of permissible decisions, a Judicial Review court could not interfere only because it favoured a different option within the range.
  41. Judicial review was more concerned with the manner in which a decision was made than the merits or otherwise of the ultimate decision. As long as the processes followed by the decision-maker were proper, and the decision was within the confines of the law, a court would not interfere. Broadly, in order to succeed in a Judicial Review proceeding, the applicant would need to show either:- the person or body was under a legal duty to act or make a decision in certain way and was unlawfully refusing or failing to do so; or a decision or action that had been taken was beyond the powers of the person or body responsible for it.
  42. Certiorari issued power to quash a decision that was ultra vires. Review on a writ of certiorari was not a matter of right, but of judicial discretion. A petition for a writ of certiorari would be granted only for compelling reasons. Certiorari was a discretionary remedy, which a court could refuse to grant even when the requisite grounds for it exist. The Court had to weigh one thing against another to see whether or not the remedy was the most efficacious in the circumstances obtaining. The discretion of the court being a judicial one had to be exercised on the basis of evidence and sound legal principles.
  43. The writ of prohibition arrested the proceedings of any tribunal, corporation, board or person, when such proceedings were without or in excess of the jurisdiction of such tribunal, corporation, board or person. A prohibiting order was similar to a quashing order in that it prevented a tribunal or authority from acting beyond the scope of its powers. The key difference was that a prohibiting order acted prospectively by telling an authority not to do something in contemplation.
  44. The impugned decision offended the World Bank Guidelines and section 6 (1) of the Act. The ex parte applicant's application succeeded, but, only on the ground that the decision was amenable for review on grounds of error of law. Judicial Review was concerned with testing the legality of the administrative decisions. A decision did not involve an error of law unless the error was material to the decision in the sense that it contributed to it so that, but for the error, the decision would have been, or might have been, different.

Application allowed
Orders:

  1. Order of certiorari issued quashing the respondent's decision (Public Procurement Administrative Review Board application No. 48 of 2018- Shenzhen Star Instrument Co. Ltd (Applicant) and Kenya Power Lighting Company Limited (Procuring Entity) dated May 4, 2018;
  2. Order of prohibition issued restraining the respondent by itself, its agents or persons acting on its behalf from implementing the Respondent's decision dated May 4, 2018;
  3. A declaration was issued that the Advertisement, Evaluation and Award of Tender No. KPI/6A.1/PT/13/16/A58, Procurement of Design, Supply, Installation and Commissioning of Advanced Metering Infrastructure (AMI) Systems to Support Revenue Recovery and Protection Programs (RPP) was done in conformity with the procurement Laws, Regulations as well as the laid down Procedures.
  4. No orders as to costs.
CONSTITUTIONAL LAW Forcible arrest and removal of persons to face charges in a foreign country is unconstitutional

Alliow Somo Abdi on behalf of the subject Mohamed Adan Abdow and 2 others v Minister of State for Provincial Administration and Internal Security and 3 others [2019] eKLR
Constitutional and Human Rights Suit 96 of 2011
High Court at Nairobi
D S Majanja, J
January 15, 2019
Reported by Ian Kiptoo and Kadzo Jally

Download the Decision

Constitutional Law– fundamental rights and freedoms - enforcement of fundamental rights and freedoms - right not to be deprived of personal liberty - right to immunity from expulsion– where accused persons were allegedly forcibly removed from Kenyan jurisdiction and arraigned in a court in foreign jurisdiction – where due process was not followed – whether the removal of accused persons from Kenya to face charges in another country without following due process was unconstitutional – whether the failure of police to prove that a search and seizure of persons was based on reasonable suspicion rendered an arrest unconstitutional – Constitution of Kenya, 1963 (repealed), sections 72 (1) (i), 76, 81 (1) & (3)
Constitutional Law– fundamental rights and freedoms – enforcement of fundamental rights and freedoms – remedies for violations of fundamental rights and freedoms- where accused persons sought relief for the alleged violations of fundamental rights and freedoms – what reliefs were available to accused persons who were forcibly extradited to face charges in another country – Constitution of Kenya, 1963 (repealed), section 84
Criminal Lawextradition – extradition process – applicable law in extradition process – where reliance was placed on article 124 of the East African Community to justify the removal of the subjects to face charges in Uganda –where the arresting country did not issue an arrest warrant or follow the due process of extradition proceedings – what was the applicable law governing extradition of persons from Kenya – Criminal Procedure Code, section 29(h); Extradition (Contiguous and Foreign Countries) Act
International Law- extradition – extradition process- applicable law in extradition process- where reliance was placed on article 124 of the East African Community to justify the removal of the subjects to face charges in Uganda –where the arresting country did not issue an arrest warrant or follow the due process of extradition proceedings- what was the applicable law governing extradition of persons from Kenya – Criminal Procedure Code, section 29(h); Extradition (Contiguous and Foreign Countries) Act

Brief Facts:
The petitioners brought the petition against the respondents on behalf of the subjects who had been detained in Uganda on allegations of having participated in bombing attacks that took place on July 11, 2010 at the Kyadondo Rugby Club and the Ethiopian Village Restaurant in Kampala. The petitioners contended that the subjects were unlawfully arrested without warrants by police officers, detained incommunicado in various police stations in Kenya and denied access to any person who could assist them during that period. Further, no charges were preferred against the subjects and they were not arraigned before any court for extradition or any other judicial proceedings before being handed over to the Ugandan authorities.
On the other hand, the respondents justified their action by stating, that the handing over of the petitioners by the Kenyan Authorities to the Republic of Uganda was pursuant to the provisions of article 124 of the Treaty for the Establishment of the East African Community.

Issues:

  1. Whether the removal of persons from Kenya to face charges in another country without following due process was unconstitutional.
  2. What was the applicable law governing extradition of persons from Kenya?
  3. Whether the failure of police to prove that a search and seizure of persons was based on reasonable suspicion rendered an arrest unconstitutional.
  4. What reliefs were available to accused persons who were forcibly extradited to face charges in another country? Read More...

Relevant Provisions of the Law
The Constitution of Kenya, 1963 (Repealed)
Section 72

(1) No person shall be deprived of his personal liberty save as may be authorized by law in any of the following cases –
..........…

(i) for the purpose of preventing the unlawful entry of that person into Kenya, or for the purpose of effecting the expulsion, extradition or other lawful removal of that person from Kenya or for the purpose of restricting that person while he is being conveyed through Kenya in the course of his extradition or removal as a convicted prisoner from one country to another; or

Section 76(1)
Except with his own consent, no person shall be subjected to the search of his person or his property or the entry by others on his premises.”

Section 81
(1) No citizen of Kenya shall be deprived of his freedom of movement, that is to say, the right to move freely throughout Kenya, the right to reside in any part of Kenya, the right to enter Kenya, the right to leave Kenya and immunity from expulsion from Kenya.

Section 81(3)
(3) Nothing contained in or done under the authority of any law shall be held to be inconsistent with or in contravention of this section to the extent that the law in question makes provision –

(c) for the imposition of restrictions, by order of a court, on the movement or residence within Kenya of any person or on any person’s right to leave Kenya either in consequence of his having been found guilty of a criminal offence under the law of Kenya or for the purpose of ensuring that he appears before a court at a later date for trial of such a criminal offence or for proceedings preliminary to trial or for proceedings relating to his extradition or lawful removal from Kenya;
(f) for the removal of a person from Kenya to be tried or punished in some other country for a criminal offence under the law of that other country or to undergo imprisonment in some other country in execution of the sentence of a court in respect of a criminal offence under the law of Kenya of which he has been convicted;

Criminal Procedure Code, Chapter 75 of the Laws of Kenya
Section 29(h)
Arrest by police officer without warrant
29. A police officer may, without an order from a magistrate and without a warrant, arrest-

(h) ...Any whom he suspects upon reasonable grounds of having been concerned in an act committed at a place out of Kenya which, if committed in Kenya, would have been punishable as an offence, and for which he is liable to be extradited under the Extradition (Contiguous and Foreign Countries) Act or the Extradition (Commonwealth Countries) Act.

Held:

  1. One was not exempted from the ordinary protection of the law, whether one was a terror suspect or an ordinary suspect. Whatever the security considerations that the Police had, the recognition and preservation of the liberties of the subjects was the only way to reinforce the country’s commitment to the rule of law and human rights. Police had to have the capacity to battle terrorism and enforce human rights at the same time as the two were not incompatible.
  2. Section 72(1)(i) of the Constitution of Kenya, 1963 (repealed) showed that the right to liberty could only be limited under authority of the law and for the purpose of effecting extradition or other lawful removal of a person from Kenya. The respondents justified their action by relying on the provisions of the Treaty for the Establishment of the East African Community which related to security co-operation. Those provisions did not exist in a vacuum and co-existed side by side with the law and were subject to the Constitution which set out fundamental rights and freedoms of the individual. Under the repealed Constitution, those provisions were not self-executing and had to be implemented by domestic law enacted for that purpose. In the instant case and in relation to section 72(1) (i) of the repealed Constitution, the law relating to extradition of any person to Uganda was the Extradition (Contiguous and Foreign Countries) Act.
  3. The removal of subjects from Kenya without due process was unconstitutional and a violation of fundamental rights and freedoms of the subjects. The applicable law was the Extradition (Contiguous and Foreign Countries) Act which applied to Uganda and Tanzania and set out the procedure for the extradition of suspects. The requesting country had to issue a warrant of arrest which was then enforced by a Kenyan Magistrate. In the instant case, the respondent did not demonstrate that a warrant had been issued by a Ugandan Court or that the extradition process was commenced in Kenya.
  4. The respondents’ reliance on article 124 of the Treaty Establishing the East Africa Community was unfounded, as the article only provided a general guidance on how the partner states needed to cooperate in areas of combating crime and sharing intelligence. It did not in any way oust the application of the Extradition (Contiguous and Foreign Countries) Act and Extradition (Commonwealth Countries) Act, which was not complied with and, which envisaged a judicial process before extradition of any suspect.
  5. Kenyan citizens were protected from expulsion from the country under section 81(1) of the repealed Constitution. However, the immunity from expulsion could be restricted under section 81(3) thereof. The exceptions to section 81(1) contained in section 81(3) of the repealed Constitution envisaged that before expulsion from Kenya, there would be extradition or lawful proceedings against any citizen for removal from Kenya, a situation that did not obtain in the instant case.
  6. The respondents did not contest the fact that they arrested the subjects without any warrants, subjected them to unlawful searches and seized their property before arresting them and handing them over to the Ugandan authorities contrary to section 76(1) of the repealed Constitution. Under section 29(h) of the Criminal Procedure Code, the police could arrest any person without a warrant if he/she suspected upon reasonable grounds that the person was concerned in an act committed outside Kenya, which if committed in Kenya would have been punishable as an offence and for which he/she was liable to be extradited under the Extradition (Contagious and Foreign Countries) Act or the Extradition (Commonwealth Countries) Act.
  7. The burden to prove that the search and seizure was based on reasonable suspicion was on the respondents and when called upon to do so, they did not furnish any evidence to show that the searches of the subjects had a reasonable basis, rendering their actions a violation of section 76(1) of the repealed Constitution.
  8. The Court had wide jurisdiction to frame and grant appropriate relief under section 84 of the repealed Constitution and was entitled to award general and exemplary damages for the violations of the fundamental rights of the petitioner. Based on the decisions of various cases, a global approach to the award of damages was the most appropriate in cases where the events of the case constituted a single transaction.
  9. A claim in the nature of special damages had to be properly pleaded and proved. Since special damages were not pleaded, orders of the same could not issue.
  10. The removal and handing over of the subjects to the Ugandan authorities was a culmination of various violations of their fundamental rights and freedoms. The respondents’ justification for that action folded under the light of the repealed Constitution as validated by several decisions of Kenyan courts condemning such action as devoid of constitutionality and legality.

Petition partly allowed.

Orders

  1. Declaration that the arrest and removal from Kenya of the subjects to Uganda to face trial without extradition proceedings or other lawful process was a violation of their right not to be deprived of their personal liberty guaranteed by section 72 of the repealed Constitution and the right to immunity from expulsion from Kenya protected by section 81 of the repealed Constitution.
  2. Declaration that the entry into the premises of the subjects by the Kenya police and the searches upon their persons and houses, was arbitrary and unconstitutional contrary to sections 76 (1) of the repealed Constitution.
  3. Damages of Kshs. 7,000,000/= awarded to cover all violations of the fundamental rights and freedoms to the subjects.
  4. Damages of Kshs. 500,000/= awarded to each of the subjects as damages for arbitrary and unconstitutional searches contrary to sections 76 (1) of the repealed Constitution.
  5. Costs awarded against the respondents.
  6. The damages were to accrue interest at court rates from the date of the instant judgment until payment in full.
JURISDICTION A further amendment to a tax assessment can only be made within 1 year, by the Commissioner of Domestic Taxes, after the giving of notice of the amended assessment.

Hewlett Packard East Africa Ltd v Commissioner of Domestic Taxes
Income Tax Appeal 12 of 2018
High Court at Nairobi
Mary Kasango, J
May 9, 2019
Reported by Beryl A Ikamari

Download the Decision

Jurisdiction-jurisdiction of the High Court-nature and extent of the High Court's jurisdiction in an appeal against the decision of the Tax Appeal Tribunal-jurisdiction relating to matters of law only-whether an issue relating to whether VAT payments were made within the required timeframe was a matter of fact-Value Added Tax Act 2009, section 13 (1)(c).
Statutes-interpretation of statutory provisions-interpretation of section 31(6) of the Tax Procedure Act-time within which a further amendment to a tax assessment could be made by the Commissioner of Domestic Taxes-whether such a further amendment could be made within five (5) years or within a year-Tax Procedure Act, No 29 of 2015, section 31(6).
Appeals-appeals to the High Court from the Tax Appeal Tribunal-notice of appeal-requirements relating to filing a notice of appeal for an appeal from the decision of the Tax Appeal Tribunal-payment of undisputed taxes-effect of failure to pay undisputed taxes-Tax Procedure Act, No 29 of 2015, section 52(2).

Brief Facts:
The appellant appealed against the decision of the Tax Appeal Tribunal. At the Tribunal, the appellant challenged the respondent's decision to further amend a Value Added Tax (VAT) notice of amended assessment issued on August 29, 2012 whilst stating that the decision went contrary to section 31(6) of the Tax Procedure Act 2016. The further amendments were made in the year 2016.
The Tribunal's findings were that the appeal was incompetent since the appellant had not paid its undisputed taxes before filing the appeal as required under section 52 (2) of the Tax Procedure Act. The Tribunal also found the appellant liable to pay penalties and interest for late declaration and payment of VAT. Additionally, the Tribunal found that the respondent acted appropriately in reviewing the tax assessment in 2016 and that the appellant's claim for a tax refund was time barred and no extension of time had been sought.

Issues:

  1. What was the nature and extent of the High Court's jurisdiction in an appeal against the decision of the Tax Appeal Tribunal?
  2. Within what period could a further amendment to a tax assessment be made by the Commissioner of Domestic Taxes?
  3. What was the effect of filing a notice of appeal before the Tax Appeal Tribunal without having paid undisputed taxes as required under section 52(2) of the Tax Procedure Act?
  4. Whether an issue relating to late payment of VAT was an issue of fact.Read More...

Relevant provisions of the law
Tax Procedure Act, No 29 of 2015;
Section 31(6);
Where an assessment has been amended, the Commissioner may further amend the original assessment –

a) Five years after
i) For a self-assessment, the date the taxpayer submitted the self-assessment return to which the self-assessment relates; or
ii) For any other assessment, the date the Commissioner served notice of the original assessment on the taxpayer;
b) One year after the Commissioner served notice of the amended assessment on the taxpayer, whichever is the later.

Held:

  1. The High Court's jurisdiction related only to questions of law but issues of fact were capable of giving rise to questions of law. An erroneous conclusion although based primarily on factual evidence would be a point of law.
  2. Section 52(2) of the Tax Procedure Act had the effect of invalidating a notice of appeal where there were unpaid undisputed taxes. It was clear that when the appellant filed the notice of appeal, it had unpaid undisputed taxes which it sought to offset against an overpayment in VAT. Therefore the notice of appeal was filed contrary to section 52(2) of the Tax Procedure Act.
  3. With regard to the further amendment to the tax assessment of August 29, 2012 done in the year 2016, there was an issue as to whether it could be done within 5 years as provided for in section 31 (6)(a)(ii) of the Tax Procedure Act or it could only be done within one year as provided in section 31 (6)(a)(ii) of the Tax Procedure Act. However, a further amendment could only be made under section 31 (6) (b) of the Tax Procedure Act after the respondent had served a notice of amended assessment. The clear intention of the Legislature was that once the respondent gave notice of the amended assessment it could only further amend it within a year under the terms of section 31(6)(b) of the Tax Procedure Act.
  4. The appellant had arranged to raise invoices for the payment of Return on Value Added Commission (ROVAC) for services rendered on a quarterly basis. That was important as invoicing on a monthly or quarterly basis determined when VAT was payable by the appellant and whether payment was made late and ought to attract interest and penalties. Under section 13 (1)(c) of the Value Added Tax Act 2009, which was applicable in the year 2011 to the year 2013, VAT was chargeable when an invoice was issued in respect of supply.
  5. The issue of late payment of VAT was not the subject of the appeal before the Court. If it was intended to be before the Court by the appellant, it was still the case that it was a factual issue which could not be the subject of an appeal before the Court.
  6. The Tribunal found that the appellant failed to lodge a claim for a refund for overpaid VAT within 12 months as required under section 24 of the Value Added Tax Act and the claim was therefore time barred. However, the determination by the Tribunal was made without that issue on a refund being placed before the Tribunal. The Tribunal was legally constrained to determine only issues brought before it for determination.

Appeal partly allowed.
Orders:-

  1. The order of the Tribunal that the appellant was not entitled to refund of Ksh 20,060,671/- was set aside. The applicant was to follow the applicable lawful process of claiming the refund.
  2. Each party to bear its own costs.

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