https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/11204

Principal Secretary, State Department for National Government Coordination & another v Public Procurement Administrative Review Board & another (Judicial Review E182 of 2026) [2026] KEHC 11204 (KLR) (Judicial Review) (24 July 2026) (Judgment) Neutral citation: [2026] KEHC 11204 (KLR) Republic of Kenya In the High Court at Nairobi (Milimani Law Courts) Judicial Review Judicial Review E182 of 2026 NM Orina, J July 24, 2026 Between The Principal Secretary, State Department for National Government Coordination 1st Applicant State Department for National Government Coordiantion 2nd Applicant and Public Procurement Administrative Review Board Respondent and Fossil Agencies Limited Interested Party Judgment Background 1.This Judicial Review Application arises from the decision of the Public Procurement Administrative Review Board (the Board) delivered on 28 May 2026 in Review Application No. 64 of 2026 concerning Tender No. SDNGC/ONT/01/2025–2026 for the proposed renovation works at the Office of the Prime Cabinet Secretary at Kenya Railways Headquarters. 2.The procurement process had progressed to an advanced stage and the Interested Party was among the bidders participating in the tender. However, before notification of award and execution of any contract, the 1st Applicant, in his capacity as the accounting officer of the procuring entity, terminated the procurement proceedings vide a letter dated 24 April 2026 on the ground of inadequate budgetary provision pursuant to Section 63(1)(b) of the Public Procurement and Asset Disposal Act, 2015 (the Act). 3.The termination was precipitated by what the Applicants describe as a substantial change in operational circumstances following the deployment of fifty-one (51) newly recruited officers to the State Department. According to the Applicants, this development necessitated the reallocation of funds towards office accommodation, renovations, furniture, ICT infrastructure and other operational requirements, thereby rendering implementation of the impugned project financially untenable. 4.Aggrieved by the termination, the Interested Party lodged Request for Review No. 64 of 2026 before the Board. Upon hearing the parties, the Board found that the Applicants had not sufficiently demonstrated the existence of the alleged budgetary constraints and consequently set aside the termination and directed the Applicants to resume the procurement proceedings. 5.Dissatisfied with that decision, the Applicants instituted the present proceedings through an Originating Motion dated 11 June 2026 seeking the following orders:a.Spent;b.An order of Certiorari to bring into the High Court for purposes of being quashed the decision of the Public Procurement Administrative Review Board dated 28th May 2026 in Review Application No. 64 of 2026 in regard to Tender No. NGC/ONT/01/2025-2026 for the proposed renovation works at the Office of the Prime Cabinet Secretary at Kenya Railways Headquarters.c.Such further and other reliefs as this Honourable Court may deem just and expedient to grant. 6.The Applicants’ case, as set out in the Supporting Affidavit and Further Affidavit dated 11 June 2026 and 23 June 2026, respectively, is that the Board acted without jurisdiction in entertaining the Request for Review. Their position is that once the procurement proceedings were terminated under Section 63(1)(b) of the Act, the jurisdiction of the Board was expressly ousted by Section 167(4)(b) of the Act. They contend that the Board unlawfully interrogated the merits of the termination, questioned the Applicants' budgetary decisions and substituted its own opinion for that of the accounting officer. 7.The Applicants further contend that the Board disregarded evidence demonstrating that funds had been reallocated from the project and failed to appreciate the constitutional and statutory framework governing public finance management. They argue that the Board erroneously concluded that no reallocation had occurred despite material placed before it showing that the project could no longer be funded. The Applicants maintain that the Board’s directive requiring resumption of the procurement process was irrational and incapable of implementation because the project no longer had budgetary support. 8.In addition, the Applicants contend that compliance with the Board’s decision would expose them to a breach of Sections 53(8) and 69 of the Act by compelling them to proceed with a procurement process without an approved budget and to enter into contractual commitments for which no funds had been allocated. 9.The application is opposed by the Interested Party through a Replying Affidavit dated 23 June 2026. The Interested Party maintains that the Board properly exercised its statutory mandate and correctly found that the purported termination did not satisfy the requirements of Section 63 of the Act. 10.The Interested Party’s position is that the jurisdictional bar contained in Section 167(4)(b) only applies where a termination has been effected in accordance with Section 63 of the Act. It contends that the Board was entitled to inquire into whether the statutory conditions for termination had been satisfied before determining whether its jurisdiction had been ousted. According to the Interested Party, the Board correctly found that the Applicants had failed to establish the alleged budgetary constraints and therefore properly assumed jurisdiction over the dispute. 11.The Interested Party further contends that the present proceedings invite this Court to re-evaluate the merits of the Board’s findings under the guise of judicial review. It argues that the Board acted within the powers conferred upon it by the Act and that the Applicants have not demonstrated any illegality, irrationality or procedural impropriety warranting the intervention of this Court. Consequently, the Interested Party urges the Court to dismiss the Originating Motion with costs. Analysis and Determination 12.Having considered the Originating Motion, the affidavits filed by the parties, the impugned decision of the Board and the rival submissions, the Court is of the view that the dispute principally turns on whether the Respondent was seized of jurisdiction in respect of the Request for Review filed before it by the Interested Party. Ultimately, the analysis will centre on the interpretation of Sections 63(1)(b) and 167(4)(b) of the Public Procurement and Asset Disposal Act, 2015, and whether the Board possessed jurisdiction to entertain the Request for Review after the Applicants had terminated the procurement proceedings on account of alleged budgetary constraints. The Court will, therefore, determine the issue whether the Public Procurement Administrative Review Board misdirected itself in law and fact in its interpretation and application of Sections 63(1)(b), 63(3) and 167(4)(b) of the Public Procurement and Asset Disposal Act, 2015. 13.Before embarking on the issue for determination, it is apposite for me to lay down the role of this court in the present application. The scope of judicial review is well settled. In Municipal Council of Mombasa v Republic & Umoja Consultants Ltd (Civil Appeal 185 of 2001) [2002] KECA 8 (KLR) (1 November 2002) (Judgment), the Court of Appeal held that judicial review is concerned with the decision-making process and not with the merits of the decision itself. The Court’s role is therefore not to determine whether it would have reached a different conclusion from the Board, but rather to determine whether the Board acted lawfully, rationally and within the confines of its statutory mandate. 14.Equally, in Republic v National Land Commission & 2 others Ex parte Oyester Village Limited; Nairobi City County & 2 others (Interested Parties) [2021] KEELC 3496 (KLR) which quoted with approval the case of Pastoli v Kabale District Local Government Council & Others [2008] 2 EA 300, the Court held as follows:In order to succeed in an application for judicial review, the applicant has to show that the decision or act complained of is tainted with illegality, irrationality and procedural impropriety...Illegality is when the decision-making authority commits an error of law in the process of taking or making the act, the subject of the complaint. Acting without jurisdiction or ultra vires, or contrary to the provisions of a law or its principles are instances of illegality. It is, for example, illegality, where a Chief Administrative Officer of a District interdicts a public servant on the direction of the District Executive Committee, when the powers to do so are vested by law in the District Service Commission...Irrationality is when there is such gross unreasonableness in the decision taken or act done, that no reasonable authority, addressing itself to the facts and the law before it, would have made such a decision. Such a decision is usually in defiance of logic and acceptable moral standards. 15.I am, therefore, guided by these parameters in my analysis below. 16.The central question for determination is whether the Board properly interpreted and applied Sections 63(1)(b), 63(3) and 167(4)(b) of the Public Procurement and Asset Disposal Act, 2015 in concluding that the Applicants had failed to comply with the substantive and procedural requirements governing termination of procurement proceedings and, consequently, that it possessed jurisdiction to entertain Request for Review No. 64 of 2026. 17.Section 63(1)(b) of the PPADA provides:An accounting officer of a procuring entity may, at any time, prior to notification of tender award, terminate or cancel procurement proceedings without entering into a contract where any of the following applies -(a)…(b)inadequate budgetary provision.(c)… 18.Section 63 (3) of the Act provides that, “A report under subsection (2) shall include the reasons for the termination.” 19.Section 167(4)(b) of the Act further provides:The following matters shall not be subject to the review of procurement proceedings under subsection (1)—SUBPARA (a)…(b)a termination of a procurement or asset disposal proceedings in accordance with section 63 of this Act. (c)… 20.A reading of 167(4)(b) reveals that Parliament intended to oust the jurisdiction of the Board in certain situations. The language of the statute under Section 167(4)(b) does not leave doubt that the ouster of jurisdiction must comply with the provisions of Section 63. Under Section 63(1)(b), one of those situations is a case where the termination of a procurement process has been occasioned by inadequate budgetary provisions. 21.The ouster clause is intended to shield the decision of the procuring entity from review by the Board and hence when successfully invoked makes the decision final. For the reason of the implications of such clauses - denying an aggrieved party access to a forum to ventilate their claim - the same must be interpreted narrowly. It is also a well-established principle that an ouster clause can only be invoked to protect a decision which is legally valid - the Anisminic Principle. This principle originated from the House of Lords decision in Anisminic Ltd v Foreign Compensation Commission [1969] AC 147. 22.There is no question, therefore, that in a constitutional democracy like Kenya and in view of Article 47 of the Constitution, such clauses must be put to serious scrutiny to ensure that they do not provide a shield to unscrupulous public entities who would like to be shielded from unlawful decisions which would curtail constitutional rights or be shrouded in secrecy in avoidance of accountability. This is even more relevant within the realm of public procurement which requires the employment of a system that is transparent.1 Even where an ouster clause is invoked successfully, the High Court retains jurisdiction pursuant to Section 175 of the Act to review a decision of a procuring entity.1Article 227 (1) of the Constitution of Kenya. 23.The invocation of the ouster clause under Section 167(4)(b) of the Act does not, however, imply that the Board must down its tools immediately. The Board retains the jurisdiction to determine whether its jurisdiction has been ousted whenever a party approaches it and the question of its jurisdiction is either raised by the parties or is evident from the pleadings. The exercise of this “competence-competence” check necessitates a determination whether any of the grounds under Section 63 has been satisfied. This court has firmly held in similar cases that it is not enough for a procuring entity to wave any of the grounds under Section 63.2 It must be shown through sufficient evidence that the termination complied with the law before the jurisdiction of the Board can be ousted.2See for instance, Republic v Public Procurement Administrative Review Board Exparte Nairobi City & Sewerage Company; Webtribe Limited t/a Jambo pay Limited (Interested Party) [2019] eKLR. 24.It is a no brainer why courts and the Board have maintained vigilance on the procurement process in this country. The reforms over the years in the procurement framework have been informed by a need to clamp down administrative malfeasance which has plagued the system for a long time. This vigilance is, therefore, particularly relevant when Section 63 is invoked to ensure that the same is not abused by public entities who do not want scrutiny - public entities who would want to play the system until they score in a game where they are the players and umpires at the same time. This mischief was aptly highlighted by this court in Republic v Public Procurement & Administrative Review Board & 2 others Ex parte Applicant Dar-Yuksel-Ama (A Consortium of Dar-Al-Handasah In Joint Venture With Yukelproje A.S & AMA Consulting Engineers Ltd and Korea Express Corporation (KEC) Korea Consultants International Company Limited (KIC) & Apec Consortium Limited & 2 others (Interested Parties) [2022] eKLR. 25.I am, therefore, in total alignment with the many decisions of this court which have reiterated the role of the Board in ensuring compliance with Section 63 before it downs its tools. The Board was entitled to undertake an inquiry to confirm whether the termination of the tender in question had complied with Section 63. In this case, the Board needed to be satisfied that there was sufficient evidence that the procuring entity experienced inadequate budgetary provision before it terminated the tender. 26.In determining whether the Applicants had complied with Sections 63(1)(b) and 63(3) of the Act, the Board was required to properly construe the statutory provisions and evaluate the material placed before it. The record before the Board demonstrates that the 1st Applicant issued a termination notice to the bidders stating a reason for termination. The Public Procurement Regulatory Authority was also notified of this termination pursuant to Section 63(2) of the Act. The Applicants also placed before the Board a letter dated 2 April 2026 addressed to the Principal Secretary, National Treasury requesting the reallocation of approximately Kshs.50,000,000 initially earmarked for the subject tender, Treasury Guidelines on the Implementation of the Financial Year 2025/2026 Budget and Medium-Term Budget Framework, evidence of the deployment of fifty-one (51) officers to the State Department and the consequential need for expenditure on office accommodation, furniture, ICT infrastructure and other operational requirements. 27.It was the Applicants case before the Board that despite having sufficient budgetary provision at the time of commencement of the tender process, it was only thereafter that unforeseen operational circumstances arose, including the deployment of fifty-one (51) officers to the State Department and the attendant need to provide office accommodation, ICT infrastructure, furniture and other operational support. The Applicants averred that those developments necessitated a reprioritization of expenditure and culminated in the Applicants' request dated 2 April 2026 seeking the reallocation of approximately Kshs. 50,000,000 from the project. 28.In my considered view, a procuring entity cannot be faulted for commencing procurement proceedings under Section 53(8) only for subsequent events to render the allocated funds unavailable. Indeed, it is to cater for such eventualities that Parliament enacted Section 63(1)(b), which expressly permits termination where the funds allocated for the procurement are no longer available. However, there must be cogent evidence of the unavailability of funds. Clear evidence that the said funds have been reprioritised elsewhere backed with the necessary requests and approvals. 29.It was the Board’s determination that the Applicants failed to surmount the pre-condition under Section 63 thereby prompting the Board to assume jurisdiction. The Board considered that although the Applicants had terminated the tender pursuant to Section 63(1)(b) of the Act – inadequate budgetary provision, the Applicants failed to demonstrate that there was actual inadequacy of budgetary provision so as to warrant the termination of the subject tender under Section 63(1)(b) of the Act. In reaching this finding, the Board observed that the tendering process had progressed smoothly commencing with the internal approval of the estimated cost of the tender being Kshs. 50,000,000.00 and inclusion in the procuring entity’s annual procurement plan for the financial year 2025/2026 under the item “repair and renovation of office block”; that the National Treasury had granted the procuring entity authority to access IFMIS and proceed with the procurement; that authority had been sought from the 1st Applicant to advertise the tender leading to the advertisement on 19 March 2026 through the Public Procurement Information Portal and this was followed by the closing and opening of the tender on 30 March 2026 and subsequent evaluation of 12 bids which had been received. Upon conclusion of the evaluation, the Interested Party had emerged as the lowest evaluated responsive bidder at a tender sum of kshs. 46,549,370.00. 30.Subsequently, the board noted, a professional opinion dated 13 April 2026 was prepared and submitted to the 1st Applicant for consideration with the recommendation that the tender be awarded. It was at this point that the 1st Applicant rejected the opinion and directed the termination of the procurement proceedings on account of inadequate budgetary provision. This was communicated through letters dated 24 April 2026 to the bidders. 31.Having considered this background, the Board noted that the process had not been faulted at any stage until the tail end when it was terminated. It also noted that the professional opinion issued on 13 April 2026 had expressly confirmed that adequate funds were available. The Board, therefore, reached a conclusion that the termination on 14 April 2026 was inconsistent with the professional opinion which had been issued a day earlier confirming availability of funds. The Board also noted that the said tender had been advertised after the recruitment had already taken place and the additional staff had reported in January 2026 well before the tender was advertised. This position, the Board concluded, negated the argument that the need to procure office equipment and workstations for the said staff constituted an unforeseen circumstance warranting termination of the subject tender. 32.As stated above, this court’s role is not to determine whether it would have reached a different conclusion from the Board, but rather to determine whether the Board acted lawfully, rationally and within the confines of its statutory mandate. 33.Having carefully considered the record, this Court is satisfied that the Board properly exercised its jurisdiction in evaluating the evidence in order to be satisfied that the impugned termination had complied with Section 63 of the Act. I am also satisfied that the Board correctly assumed jurisdiction having found that the evidence presented by the Applicants failed to discharge the burden of demonstrating that the procuring entity had faced inadequate budgetary provision that prompted the termination of the tender. I find no evidence that the Board disregarded evidence that funds had been reallocated from the project. On the basis of the material that was before it, the Board acted lawfully within its statutory mandate in assuming jurisdiction having found that the Applicants had not shown tangible evidence that the procuring entity was facing inadequate budgetary provision. This finding was neither unlawful nor irrational. The Applicants failed to present before the Board sufficient evidence beyond a letter requesting for reallocation of the funds which were meant for the subject tender. There was no communication to confirm that this request had been approved and, in any case, the events building up to the termination did not support a finding that the procuring entity was affected by inadequate budgetary provision. The purported termination seems to have been an afterthought inspired by other factors beyond what is contemplated in the law. 34.This Court is also alive to the principle that specialized bodies such as the Public Procurement Administrative Review Board are entitled to a measure of deference in matters falling within their expertise. However, as was observed in Republic v Public Procurement Administrative Review Board & 2 Others Ex Parte Kenya Airports Authority [2018] KEHC 9246 (KLR), the Board's specialized mandate must be exercised within the confines of the Public Procurement and Asset Disposal Act. Where it acts upon an erroneous interpretation of the law or exceeds the limits imposed by statute, it becomes amenable to the supervisory jurisdiction of this Court. The court in the case held that:It is not disputed that the first Respondent is vested with powers to make the decision in question. No abuse of such powers has been alleged or proved. It has not been shown that this power was not exercised as provided for under the law. It has not been proved or even alleged that the first Respondent acted outside its powers or the decision was arrived at after taking into account irrelevant or extraneous matters. It is my view that the nature and circumstances of the decision fall into the category of areas which are not disturbed by the courts unless the decision under challenge is illegal, irrational, or un-procedural.” 35.The Applicants have failed to demonstrate before this court that the Board acted outside its powers as set out in the Act and as explained herein in respect of the competence to determine its own jurisdiction and further they have failed to show that the Board’s decision was arrived at after taking into account irrelevant or extraneous matters or by failing to take into account certain matters or evidence that was before it. 36.Consequently, it is my finding that the jurisdictional bar under Section 167(4)(b) could not come into effect and the Board was properly seized of jurisdiction to determine the request for review before it. 37.In conclusion, it is my finding that the Applicant’s Originating Motion dated 11 June 2026 is without merit and it accordingly fails. Each party shall bear its own costs. DELIVERED, DATED AND SIGNED AT NAIROBI THIS 24TH DAY OF JULY, 2026.NABIL M. ORINAJUDGEJudgment virtually delivered virtually in the presence of:Mr. Bett h/b for Mr. Makuto for the ApplicantsMr. Kiprono for the Interested partyLinda - Court Assistant