1. The Application before this court for determination is the one dated 5th June, 2023 wherein the Applicant seeks the following orders;
a. An Order of Certiorari to call into this Court the decisions of the Respondent as communicated to the Applicant by its letters dated 17th February, 2023, 13th April, 2023, 20th May, 2023 and 15th December 2022 into this Honourable Court for purposes of quashing it, and to quash it.
b. Orders of Prohibition restraining the Respondent from carrying out investigations, issuing an investigation report and/or terminating Tender No. KAA/OT/HRD/0014/2022-2023- For the Provision of Insurance Underwriting Services for Staff Medical Insurance Cover or in any way interfering with the Contract dated 20th December, 2022between the Applicant and the Interested Party.
c. Order of prohibition to restrain the Respondent from issuing an investigation report on Tender No. KAA/OT/HRD/0014/2022-2023-For the Provision of Insurance Underwriting Services for Staff Medical Insurance Cover
d. Orders of prohibition to restrain the Respondent from terminating the Tender No. KAA/OT/HRD/0014/2022-2023- For the Provision of Insurance Underwriting Services for Staff Medical Insurance Cover.
Applicant’s case;
2. It is the Applicants case that on 9th August 2022, Kenya Airports Authority (KAA) advertised a Tender- Tender No. KAA/OT/HRD/0014/2022-2023- For the Provision of Insurance Underwriting Services for Staff Medical Insurance Cover.
3. That Applicant submitted its bid to provide the services set out in the Tender; and emerged as the winning Bidder.
4. The Tender process was challenged at the Public Procurement Administrative Review Board, vide PPARB Application No. 79 of 2022, an application filed by CIC General Insurance Ltd- one of the Bidders and the PPARB heard the Application, and by a Decision dated 21st September 2022 rendered itself as follows:
“1. The Request for Review filed on 31st August 2022 by the Applicant herein with respect to Tender No. KAA/OT/HRD/0014/2022-2023 for the Provision of Underwriting Services for Staff Medical Insurance Cover be and is hereby dismissed.
2. The Procuring Entity’s Addendum No. 6 dated 1st September 2022 with respect to Tender No. KAA/OT/HRD/0014/2022-2023 for the Provision of Underwriting Services for Staff Medical Insurance Cover issued during the pendency of the instant Request for Review filed on 31st August 2022 be and is hereby nullified and set aside.
3. The Board hereby directs the Accounting Officer of the Procuring Entity to extend the tender submission
Deadline for Tender No. KAA/OT/HRD/0014/2022-2023 for the Provision of Underwriting Services for Staff Medical Insurance Cover to (sic) by a minimum of 7 days from the date of this decision taking into consideration the Board’s findings in this Request for Review.
4. Given that the subject procurement process has not been concluded, each party shall bear its own costs in the Request for Review.”
5. The Applicant alleges that having emerged as the winning bidder; the Applicant proceeded to enter into a contract dated 20th December 2022 with KAA; which Contract is still in force.
6. The Respondent is a statutory body established under the Public Procurement and Assets Disposal Act, 2015 (hereinafter referred to as the PPADA), and draws its mandate from Section 9 of the PPADA with its main mandate being to monitor, assess and review the public procurement and asset disposal system to ensure that these institutions respect the National values and other provisions including Article 227 of the Constitution on public procurement, Section 9(h) of the PPADA gives the Respondent the mandate to investigate and act on complaints received on procurement and asset disposal proceedings from procuring entities, tenderers, contractors or the general public that are not subject to administrative review.
7. The Respondent wrote to the Applicant on 17th February 2023, under section 35(1) of the Public Procurement & Asset Disposal Act, (‘The PPADA’) seeking for the following information in order for it to conclude investigations on Tender No. KAA/OT/HRD/0014/2022-2023 for the Provision of Underwriting Services for Staff Medical Insurance Cover.
“a. Documents relating to incorporation of M/s Jubilee Insurance Company of Kenya Limited.
b. Documents relating to incorporation of M/s Jubilee Health Insurance Limited.
c. List of Directors of M/s. Jubilee Health Insurance Limited.
d. Documents relating to the transfer of business from M/s. Jubilee Insurance Company of Kenya Limited to M/s. Jubilee Health Insurance Limited; and
e. Any other relevant information or document that may assist the Authority in this matter.”
8. The request for information was followed with a letter dated 13th April 2023 in which the Respondent summoned the Applicant’s Principal Officer for an Interview/statement recording on 19th April 2023. Article 47 (1) of the Constitution as read with Section 4 (1) & (2) of the Fair Administrative Action Act entitles the Applicant to a fundamental and inalienable right to a lawful and procedurally fair administrative action, while Article 47 (2) of the Constitution enjoins the Respondent to furnish the Applicant with written reasons for their action where the administrative actions affect or threaten to affect the Applicant's rights or fundamental freedoms.
9. The Applicant’s representatives on 19th April 2023, presented themselves at the Respondent’s Offices at KISM Towers, 6th Floor, for the meeting which had in attendance the officer-in-charge of Audit and Risk Investigations at PPRA in person and representatives of the Investigations team who appeared virtually.
10. During the pendency of the interview, the Respondent’s officer requested for various documents such as the performance bond, IRA licenses and various documents that made part of the tender document. He was advised by the Applicant’s representatives that the said request had not been made to them prior to the meeting and they were therefore unable to provide the documents at the time.
11. The Applicant alleges that the Respondent’s officer had no power to undertake any investigations as he was not an Investigator appointed pursuant to section 35 (2) of the PPADA as his role is limited to conducting Audit and Risk Assessments under the Department of Audit and Risk assessment. In purporting to conduct investigations under section 36 (1) of the PPADA, the Respondent’s Officer acted ultra vires and acted without authority as he was/is an Inspector at the Respondent- under section 42 of the PPADA; not an investigator within the meaning of sections 35 & 36 of the Act.
12. Further the conduct of investigations as prescribed under Section 35 of the PPADA is undertaken by a person appointed as an investigator and culminates in the preparation of a Report that will result in inter-alia an order by the Director General directing termination of a contract that is submitted to the Authority for consideration by the Director General. The inspection is undertaken by the Authority or anyone authorized by the Authority (Inspector) in accordance with Section 43 of the PPA with the aim of identifying contraventions and directing the Procuring Entity on actions to be taken to rectify the contravention only.
13. The Respondent thus conducted an inspection and not an investigation as is alleged by them.
14. It is the Applicant’s case that the Respondent’s refusal to avail the complaint to the Applicant’s representatives and by requiring the Applicant to produce documentation/ information that was not in its ‘Request for information’ dated 17th February 2023, the Respondent violated the Applicant’s rights to fair administrative action, fair hearing, access to justice and right to information a violation of Articles 35, 47 and 50 of the Constitution.
15. The Applicant, through its Counsel, on 24th April 2023, wrote to the Respondent’s Director-General, informing him, inter alia, that the PPRA could not undertake investigations into the subject tender on account of section 40 of the PPADA.
16. On 10th May 2023 the Respondent wrote to the Applicant’s Principal Officer seeking additional information, in furtherance of their impugned investigation.
17. The Applicant proceeded to instruct its counsel to write a Demand letter to the Respondent, demanding that the investigations be stopped within 7 days on account of, inter alia, their manifest illegality.
18. The Applicant came across a letter dated 15th December 2022, by the Respondent to the Interested Party informing it that the Respondent had ‘received an undated complaint letter from an anonymous complainant.’ And by the said letter, the Respondent quoted the alleged complaints and sought the Interested Party’s answers to the allegation and requisitioned for documents.
19. The Applicant seeks to quash/terminate the Respondent’s investigations/actions on account of their manifest illegality, due process violations and unfairness as provided under Section 40 (1) of the PPADA provides that:
“No investigation shall be commenced or continued under this Part, and no order shall be made under this Part, in relation to an issue that the Review Board is reviewing or has reviewed under the relevant provisions of this Act.”
20. It is the Applicant’s case that the proceedings before the PPARB in Application No. 79 of 2022 related to addenda issued that were deemed to be discriminatory vide an anonymous complaint and was adjudicated upon by the PPARB and was therefore outside the purview of the Respondent's mandate. Applicants aver that the Respondent's investigative powers should be limited to its mandate under Sections 35 and 43 of the PPADA.
21. The Applicant denies the allegations that the sum of Kenya Shillings Twenty-Five Million (Kshs. 25,000,000) exchanged hands between itself and the Interested Party; the said allegations are frivolous and vexatious and are aimed at painting the Applicant in bad light and that pursuant to Article 252 of the Constitution as read together with Section 11 of the Ethics and Anti-Corruption Commission Act ,it is the mandate of the Ethics and Anti-Corruption Commission(hereinafter referred to as EACC) to conduct investigations on corruption either on its own initiative or on a complaint made by a member of the public. The Respondent was therefore required to invite the EACC to investigate the matter considering that the Respondent does not have the requisite skill set to conduct investigations on matters corruption.
22. The Applicant argues that the Respondent is misleading this court and that pursuant to Section 2 of the Fair Administrative Actions Act Respondent had instituted “illegal investigations” into the subject procurement process and issued a decision to stop the processing of the subject procurement until the investigations were completed and a report done on the same.
23. The Applicant relies on Judicial Review No. 96 0f 2020- Premier Verification Quality Services (PVQS) Ltd v Public Procurement Regulatory Authority; Kenya Bureau of Standards (Interested party) [2021] eKLR where the Court rendered itself on the implications of section 40 of the PPADA.
24. The Applicant further relies on Judicial Review No. E002 of 2021- Republic v Public Procurement Administrative Review Board; Rhombus Construction Company Limited (Interested Party) Ex parte Kenya Ports Authority & another [2021] eKLR, where the court held:
“The above notwithstanding, Section 40 of the Act prohibits any form of investigations from being conducted in relation to a matter pending before the Review Board for determination or on which the Board has Reviewed. It is presumed that, such investigations at the tail end of the tendering process may unduly exert undue influence on the Review Board. In any event, whistle blowers will always be there and the only recourse the procuring entity had in my view was to lay the alleged complaints before the board for consideration rather that ignore its decision all together.”
Respondent’s case;
25. The Application dated 5th June 2023 is opposed by the Respondent who makes a case that Respondent is a regulatory body established under section 8 of the Public Procurement and Assets Disposal Act, 2015 (the "Act") and its statutory mandate is to ensure that procurement procedures established under the Act are complied with. The Act was enacted to give effect to the provisions of Article 227 of the Constitution of Kenya, 2010 to ensure that public entities carry out procurement proceedings in a manner that is fair, transparent, equitable, competitive and cost effective.
26. One of its mandates is to carry out investigations as provided for in section 35 of the Act by ensuring that all public entities and suppliers adhere to the laid down procurement procedures and code of ethics as outlined in the Act and in exercising such mandate pursuant to 40 (2) of the Act it is empowered to undertake investigations if, after the Review Board has completed its review.
27. The Respondent received an anonymous and undated complaint letter on 9th December, that the Interested Party in this case tampered tender evaluation criteria with regard to Tender No. KAA/OT/HRD/0014/2022-2023. The complaint was that the Interested Party tampered with the tender evaluation criteria of the original tender document by issuing addenda to the tender which were done to favour the Applicant.
28. The Respondent stated that it was also alleged that a kick-back to facilitate award of Tender No. KAA/OT/HRD/0014/2022-2023 exchanged hands between the Applicant and the Interested Party to the tune of Kenya Shillings Twenty-Five Million (Kshs. 25,000,000/=).
29. The Respondent wrote to the Interested Party via a letter dated 15th December, 2022 informing of the allegations against them and requested that the Interested Party to provide a response to the allegations as well as to submit certified copies of the following documents for review by the Respondent; Approved Procurement Plan, Tender Invitation Notice, Blank Tender Document Issued to Bidders, Tender Opening Minutes and Tender Opening Register, Addendum Issued if any, Tender Evaluation Report, Professional Opinion, Notification of Intention to Award to all Bidders; and Contract Agreement if any.
30. The Interested Party responded to the complaint and submitted the requested document vide a letter dated 23rd December,2022 and upon review of the furnished documents, the Respondent observed that there was a need for investigation to establish facts on some of the issues identified during the review.
31. The Director General appointed a team of two officers to carry out the investigations vide a memo dated 8th February, 2023 in accordance with section 35(3) of the Act and via a letter dated 8th February informed the Interested Party that investigations had been instituted on the subject procurement and a team of investigators had been appointed to that effect.
32. The Respondent also wrote to the Applicant in the matter before this court on 17th February, 2023 informing them of the investigations and requiring them to submit documents pertaining to their incorporation.
33. It is the Respondent’s position that the subject of the investigations being carried out against a procurement proceeding undertaken by the Interested Party and they were not investigating the Applicant in the case before this court but rather the Applicant was a person of interest in providing documents necessary to assist the Respondent carry out that mandate. Therefore, it was not duty bound to provide the complaint letter to the Applicant.
34. The Respondent after interviewing persons of interest and reviewing the documents submitted by the Interested Party and the Applicant it prepared a preliminary investigation report and shared the same with the Interested Party via a letter dated 10th May,2023 for their comment before finalization.
35. That contrary to the Applicant’s allegations, the Respondent alleges that as captured in the Report dated May 2023, the report highlighted several issues, issues which are totally different from the issues that were being considered by the Public Procurement Administrative Review Board (ARB)in Application No.79 of 2022. The Applicant before the board CIC General Insurance Ltd was complaining of a certain evaluation criterion in the blank tender document issued to the bidders as being discriminatory as well as complaint against extending of tender closing date. The board was concerned with two distinct issues;
(a) Whether Addendum 6 dated 1st September,2022 seeking to extend the tender closing/opening date from 2nd September, 2022 at 11.00 am to 13th September, 2022 is null and void;
(b) Whether the mandatory requirement item number 13 under the mandatory evaluation criteria in the tender document is discriminatory, unfair and illegal and contravenes the provision of Article 227 (1) of the Constitution, as read with section 3 and section 58 (2) of the Public Procurement and Asset Disposal Act
36. The Respondent’s investigation established various breaches of the law as was captured in their Investigation Report whereas the Review Board considered and made a ruling on two issues which were raised regarding the blank tender document issued to the bidders, the Respondent's investigation herein was concerned with the whole tender process up to contract award.
37. The Respondent further states that they did not breach any of the provisions of the Fair Administrative Action Act as all the parties in the case before this court were actively involved in the investigation process and that their move to court is premature as no orders have been given under Section 38 (2) of the Act which provides that: -
"(2) Before making an order under subsection
(1), the Director-General shall give the following persons an opportunity to make representations-
(A) the procuring entity; and (b)any other person whose legal rights the Director-General believes may be adversely affected by the order."
38. The Respondent states that specialised bodies should not be interfered with in exercise of statutory mandate and the court will only exercise its supervisory role over them if the decision or administrative action is tainted with illegality, irrationality or procedural impropriety and rely on Kenya Pipeline Company Limited v Hyosung Ebara Company Limited & 2 others [2012] eKLR the Court of Appeal expressed itself as follows;
"The Review Board is a specialized statutory tribunal established to deal with all complaints of breach of duty by the procuring entity. By Reg. 89, it has power to engage an expert to assist in the proceedings in which it feels that it lacks the necessary experience. S. 98 of the Act confers very wide powers on the Review Board. It is clear from the nature of powers given to the Review Board including annulling, anything done by the procurement entity and substituting its decision for that of the procuring entity that the administrative review envisaged by the Act is indeed an appeal. From its nature the Review Board is obviously better equipped than the High Court to handle disputes relating to breach of duty by procurement entity. It follows that its decision in matters within its jurisdiction should not be lightly interfered with.”
39. It further relies on the case Speaker of the National Assembly v James Njenga Karume [1992] eKLR where the Court of Appeal (Kwach, Cockar & Muli, JJ.A) held as follows:
"In our view, there is considerable merit in the submission that where there is a clear procedure for the redress of any particular grievance prescribed by the Constitution or an Act of Parliament, that procedure should be strictly followed. We observe without expressing a concluded view that order 53 of the Civil Procedure Rules cannot oust clear constitutional and statutory provisions."
40. In Judicial Review No. 55 of 2022: Republic v Public Procurement Regulatory Authority & another; Auditor General & another (Interested Party) where it was held that:
"It is trite law that the court's role in judicial review remains strictly supervisory. It is concerned with determining whether there has been a lawful exercise of power having regard, in particular, to the terms, scope and purpose of the statute conferring the power. The legal principle now entrenched in precedent is that in circumstances where reasonable minds might differ about the outcome of, or justification for, the exercise of power, or where the outcome falls within the range of legally and factually justifiable outcomes, the exercise of power is not legally unreasonable simply because the Court disagrees, even emphatically, with the outcome or justification. If there is an evident, transparent and intelligible justification for the decision or if the decision is 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. The Committee, in my respectful view, lawfully exercised power within statutory limits. It cannot be faulted for doing what the law mandated it to do.”
41. The Respondent states that where the Constitution has allocated certain powers and functions to various bodies and tribunals it is important that the bodies and tribunals be given leeway to discharge the mandate bestowed upon them by the Constitution so long as they comply with the Constitution and national legislation and pray that this court should desist from interfering with the mandate of the Respondents in the case before it and dismisses the case before it with costs to allow the Respondent finalise the investigations.
Interested Party’s case;
42. The Interested Party state that the tender No. KAA/OT/HRD/0014/2022-2023 was advertised on 9th August 2022 in My Gov, posted on Public Procurement Information Portal and on the KAA website. The said tender was due to close on 24th August 2022 which closing date was extended for a further seven (7) days to close on 31st August 2022 vide Addendum No. 1 dated 19th August 2022.
43. On 31st August 2022, the Authority received a directive from the Public Procurement Administrative Review Board (PPARB) to suspend the tender process following an appeal by CIC General Insurance Limited, until the Appeal had been finalized and pursuant to a Ruling by PPARE dated 21st September 2022, the Tender process was concluded with execution of a contract dated between KAA and M/s Jubilee Health Insurance Limited.
44. The IP’s state that the addenda were intended to guarantee a fair, open and competitive bidding environment for prospective bidders as per the provisions of Section 60 (1) of the 2P/A and they met the mandatory requirements (MR) Nos. 1-22 of the tender preliminary evaluation criteria as well as issued in compliance with Section 75 of the PPADA which provides as follows:
"(2) An amendment may be made on the procuring entity's own initiative or in response to an inquiry by a candidate or tenderer." As such, the Act does, not limit the number of addenda that may be issued by a procuring entity.”
45. The IP submit that they acted within the law and welcome and support any investigations that PPRA or other specialized investigative agencies may wish to undertake as regards the matter before this court.
Analysis and Determination.
The issue crystalizes for determination is whether or not the Applicant is entitled to the orders sought.
46. In the case of Onyango Oloo Vs Attorney General (1989) EA the court of appeal held that: -
“The principle of natural justice applies where ordinary people would reasonably expect those making the decisions which will affect others to act fairly, and they cannot act fairly and be seen to have acted fairly without giving an opportunity to be heard……There is a presumption in the interpretation of statutes that the rules of natural justice will apply and therefor the authority is required to apply the principles of natural justice. A decision in breach of natural justice is not cred by holding that the decision would otherwise have been right since the principle of natural justice is violated, it matters not the same decision would have been arrived at…….”
47. The Respondent did not explain nor demonstrate why it furnished the interested party with the whistleblowers' complaint but refused to furnish the Applicant with the complaint.
48. The denial of information by the Respondent to the Applicant amounts to a breach of the Applicant’s legitimate expectation that it would get a copy of the complaint which in turn would have helped the Applicant to mount and or prepare its defence.
49. The unjustified failure, refusal and or denial of information, material and evidence amounts to a procedural impropriety that goes to the root of the right to fair hearing as guaranteed under Article 47 and 50 of the Constitution and a violation of Section 4 (3)(g) of The Fair Administrative Action Act.
50. Article 47 of the Constitution provides that every person's right to fair administrative action that is expeditious, efficient, lawful, reasonable and procedurally fair.
51. Section 4 of the Fair Administrative Action Act echoes Article 47 and reiterates the entitlement of every person to administrative action that is expeditious, efficient, lawful, reasonable and procedurally fair and in particular it stipulates that in all cases where a person’s rights or fundamental freedoms is likely to be affected by an administrative decision, the administrator must give the person affected by the decision prior and adequate notice of the nature and reasons for the proposed administrative action; an opportunity to be heard and to make representations; notice of a right to a review or internal appeal against the decision where applicable; a statement of reasons; notice of the right to legal representation and right to cross-examine; as well as information, materials and evidence to be relied upon in making the decision or taking the administrative action. It is noteworthy that some of these elements are mandatory while some are only required where applicable.
52. The investigations that the Respondent was conducting cannot be said to be fair if it acted impartially by providing a copy of the complaint to the interested party only and not the Applicant.
53. Article 50(2) of The Constitution provides that every accused person has the right to a fair trial, which includes the right—
a) to be presumed innocent until the contrary is proved;
b) to be informed of the charge, with sufficient detail to answer it;
c) to have adequate time and facilities to prepare a defence.
54. In the case of Aker v Canada (Minister of Citizenship & Immigration 2 S.C.R 817 6, The Supreme Court of Canada held:
“The values underlying the duty of procedural fairness relate to the principle that the individual or individuals affected should have the opportunity to present their case fully and fairly, and have decision affecting their rights, interests, or privileges made using a fair, impartial and open process, appropriate to the statutory, institutional and social context of the decisions.”
55. The Respondent did not uphold the rules of natural justice during the investigations. In any event this court notes that it is also not in dispute that on 20th December 2022 the Applicant entered into a contract with a third party which contract is in force.
56. Whether or not an order of prohibition should issue, 228. Halsbury’s Laws of England, 4thEdition, Reissue Vol. 1(1)-page 2012 paragraph 109 provides as follows: -
“The order of prohibition is an order issuing out of the High Court directed to an inferior court or tribunal or public authority which forbids that court or tribunal or authority to act in excess of its jurisdiction or contrary to law. Prohibition is employed for the control of inferior courts, tribunals and public authorities. Prohibition is concerned with decisions of the future. Prohibition will issue to prohibit a determination in excess of jurisdiction, error of law on the face of the record or breach of the rules of natural justice.”
57. The horse has bolted and nothing will be achieved in proceeding with the investigations that the Respondent is seeking to pursue given that the court has already made a finding that the administrative action in the investigations was tainted with a fundamental procedural impropriety pursuant to the failure on the part of the Respondent to furnish the Applicant with the complaint. It is this court’s finding that the Applicant has made out a case for the grant of an order of prohibition.
58. The Respondent failed to furnish the Applicant with facilities and in particular the complaint or the charge that would have helped the Applicant to prepare a defense in blatant contravention of Article 50(2) of the Constitution and I so hold.
Disposition;
59. This court thus finds that the Applicant has made out a case for the grant of the orders of Certiorari and Prohibition as prayed.
Orders;
(a) An Order of Certiorari to call into this Court the decisions of the Respondent as communicated to the Applicant by its letters dated 17th February, 2023, 13th April, 2023, 20th May,2023 and 15th December 2022 into this Honourable Court for purposes of quashing them, and to quash them is hereby issued.
(b) An Order of Prohibition restraining the Respondent from carrying out investigations, issuing an investigation report and/or terminating Tender No. KAA/OT/HRD/0014/2022-2023- For the Provision of Insurance Underwriting Services for Staff Medical Insurance Cover or in any way interfering with the Contract dated 20th December, 2022 between the Applicant and the Interested Party is hereby issued.
(c) An Order of prohibition to restrain the Respondent from issuing an investigation report on Tender No. KAA/OT/HRD/0014/2022-2023- for the Provision of Insurance Underwriting Services for Staff Medical Insurance Cover is hereby issued.
(d) An Order of prohibition to restrain the Respondent from terminating the Tender No. KAA/OT/HRD/0014/2022-2023- for the Provision of Insurance Underwriting Services for Staff Medical Insurance Cover is hereby issued.