[2015] KEHC 56 (KLR)

REPUBLIC OF KENYA

IN THE HIGH COURT OF KENYA

AT MOMBASA

CONSTITUTIONAL PETITION NO. 75 OF 2012

REVITAL HEALTH (EPZ) LIMITED........................................................PETITIONER

VERSUS

PUBLIC PROCUREMENT OVERSIGHT AUTHORITY..............1ST RESPONDENT

KENYA MEDICAL SUPPLIES AGENCY....................................2ND RESPONDENT

THE ATTORNEY GENERAL.......................................................3RD RESPONDENT

AND

MINISTER OF PUBLIC HEALTH AND SANITATION.....1ST INTERESTED PARTY

MINISTER OF MEDICAL SERVICES.............................2ND INTERESTED PARTY

INTERNATIONAL DEVELOPMENT ASSOCIATION....3RD INTERESTED PARTY

ANGELICA MEDICAL SUPPLIES LIMITED..................4TH INTERESTED PARTY

JUDGMENT

INTRODUCTION

1. The Petitioner who claims to be a manufacturer of medical products was unsuccessful bidder for a tender for the supply of syringes which were part of items under LOT 4 the supply of which was invited under the 2nd respondent’s Tender No. KEMSA/KHSSP- OIT11/2011 – 2013 PROCUREMENT OF NON - PHARMACEUTICALS (LOTS). The funding of the Tender was expressed in the Invitation for Bids (IFB) as a credit received by the Kenya Government from the International Development Association towards the cost of Health sector Support Project (HSSP) and the bidding for the Tender was to be conducted through ‘the international competitive bidding procedures specified in the World Bank’s Guidelines: Procurement under IBRD Loans and IDA Credits’. Under clause 38 of the Instructions to Bidders (ITB) incorporating the World Bank Guidelines, the successful bidder is notified of the award and a contract concluded before the notification to the unsuccessful bidders. The Procurement and Disposal Act 2005 (PPDA) requires simultaneous notification to all the bidders with an avenue of appeal from the award before contract. The petitioner considered that the provisions of PPDA which exempt the operation of the Act in cases of donor funds were unconstitutional. The petitioner was aggrieved that because of the prior notification and contract executed with the successful bidder before notification to itself it was denied an opportunity to challenge the award. It contended, principally, that its constitutional right to fair administrative action under Article 47 had been violated by the loss of opportunity to challenge the award to the successful bidder. [The petitioner appeared in its written submissions of 17th February 2014 to abandon contentions relating to violations of the rights to information under Article 35 and to fair hearing under Article 50. ] The petition is brought against the 1st respondent and 3rd respondents for alleged failure to advise and take action on unconstitutional provisions of the PPDA and the World Bank Guidelines on Procurement; the 2nd respondent agency which was the procurement agent for the 1st and 2nd Interested Party with the funding of the 3rd Interested Party, and the 4th Interested Party as the successful party was joined by order of the Court at hearing.

2. The petitioner did not obtain any conservatory orders and the contract may proceeded to full execution, and for that reason the counsel for the Petitioner by its Submissions dated 17th February 2014 seeks ‘damages and a declaration that [its] fundamental rights and freedoms were infringed’. Upon suggestion by counsel for the 3rd respondent that the petition was academic exercise, counsel for Petitioner protested that the petition sought to uphold the supremacy of the Constitution by declaration of unconstitutionality of statutory provisions, protection of fundamental rights under the constitution and damages were sought among the reliefs of the petition.

THE PETITION

3. By an Amended Petition dated 23rd August 2012 the Petitioner sought the following specific reliefs:

(a) A declaration that Clause 38. 3 of the 2nd Respondent’s Tender No. KEMSA/KHSSP-OIT11/2011-2013 PROCUREMENT OF NON PHARAMACEUTICALS (LOTS) CONTRAVENES THE Constitution as it offends the provisions of article 47 of the Constitution and as such any award by the 2nd Defendant to the successful bidder of the 2nd Respondent’s Tender No. KEMSA/KHSSP-OIT11/2011-2013 PROCUREMENT OF NON PHARAMACEUTICALS (LOTS) for LOT 4 should be declared null and void.

(b) A declaration that the 2nd Respondent be directed to commence a new procurement process to procure the products so specified in the 2nd Respondent’s Tender No. KEMSA/KHSSP-OIT11/2011-2013 PROCUREMENT OF NON PHARAMACEUTICALS (LOTS) for LOT 4 in line with the provisions of the Constitution.

(c) A declaration against the 1st and 3rd Respondents that they have failed to advise the 2nd Respondent, the 1st, 2nd, and 3RD Interested Parties and the petitioner on the constitutionality of Clause 38. 3 of the 2nd Respondent’s Tender No. KEMSA/KHSSP-OIT11/2011-2013 PROCUREMENT OF NON PHARAMACEUTICALS (LOTS) being in conflict with section 9 of the Public Procurement and Disposal Act and Article 47 of the Constitution thereby causing the petitioner to suffer great loss and damage.

(d) A Conservatory Order be issued prohibiting any further execution and or satisfaction by the 2nd Respondent and or any other party of the Tender No. KEMSA/KHSSP-OIT11/2011-2013 PROCUREMENT OF NON PHARAMACEUTICALS (LOTS) for Lot 4.

(e) An Order to the 1st and 2nd Respondent that the petitioner is constitutionally entitled to all information held by the 2nd Respondent into the application, evaluation and implementation of the Tender No. KEMSA/KHSSP-OIT11/2011-2013 PROCUREMENT OF NON PHARAMACEUTICALS (LOTS).

(f) That this Honourable Court do determine the appropriate manner of awarding compensation to the petitioner to compensate for the petitioner’s suffering, losses and damages arising for the Respondent’s violations of the petitioners fundamental rights and freedoms.

(g) Costs of this Petition.

(h) Damages and or any other relief provided by the Court.

4. The petition was supported by the affidavit of Muzaffer M. Essajee sworn on the 22nd August 2012. The factual background of the petitioner was set out in paragraphs 3 - 12 of the supporting affidavit as follows:

3. That the Petitioner is a World Health Organization certified manufacturer of medical products (I hereby attach and mark MME-3 a copy of the certificate.)

4. That the 2nd respondent did place an advert in the local print media seeking invitation of bids for the supply of certain Non Pharmaceutical products referred to asTender No. KEMSA/KHSSP-OIT11/2011-2013 PROCUREMENT OF NON PHARAMACEUTICALS (LOTS) with funds provided by the 3rd Interested party which Tender was divided into 4 LOTS.

5. .That being a eligible party certified by World Health Organization and being a local manufacturer with our factory not in the Mariakani area of Kilifi but in Kwa Jomvu area of the Count y of Mombasa of the required goods we did proceeded to purchase the Tender document [from] the 2nd respondent (I hereby attach and mark MME$ a copy of our receipt of purchase of the Tender.)

6. That we did open perusal of the required specifications required in the Tender document seek clarification from the 2nd Respondent with regard to certain aspects of the Tender that we thought were not made clear (I hereby attach and mark MME- 5 a copy of our letters to the 2nd respondent asking clarification.)

7. That the purpose of our letters is that we are manufacturers of the products and are aware of the general market standards with respect to the specifications of some of the products sought by the 2nd Respondent (I hereby attach and mark MME- 6 a copy of our letter questioning the need for certain items.)

8. That despite our requests the replies from the 2nd Respondent to our requests for clarification did not shed enough light nor did they answer the questions that we sought clarification on and only repeated the contents of the Tender terms and conditions and as such were not in any way a clarification of the information already provided by rth e2nd respondent in the Tender (I hereby attach and mark MME-7 copies of the 2nd Respondent’s replies.)

9. That we did proceed to make our application to provide the 2nd Respondent with the gods in LOT 4 of the Tender (I hereby attach and mark MME- 8 a copy of our completed Tender including the Terms and Conditions of the Tender submitted to the 2nd Respondent.)

10. That on the 21st June 2012 we were informed by the 2nd respondent that our bid was unsuccessful (I hereby attach and mark MME- 9 a coopy of the 2nd Respondent’s letter to us.)

11. That on upon receipt of the letter of 2nd Respondent’s letter of 21st June 2012 we did at once seek the reason from the 2nd respondent as to why our bid was unsuccessful () I hereby attach and mark MME – 10 a copy of our letter dated 25th June 2012. )

12. That we were informed by the 2nd Respondent that the reason for our not being selected was that we had offered to supply insulin syringes 100IU 30G X 10mm needles as opposed to insulin syringes 100IU 30G X 8mm needles (I hereby attach and mark MME- 11 a copy of the 2nd Respondent’s letter dated 13th July 2012. )

5. The principal contentions of the Petitioner as set out in the Petition, the supporting affidavit and the oral and written submissions made in court were three-fold that:

(a) The 2nd respondent had not shown that there was an Agreement or treaty that was in conflict the PPDA so as to oust the application of the PPDA and the World Bank Guidelines were not such an agreement for purposes of section 6 (1) of the PPDA and that, therefore, the PPDA applied to the procurement with effect that the 2nd respondent had breached the law in failing to provide simultaneous notification of the results of the tender and failing to provide a forum for challenging the award, which is a constitutional right to administrative action.

(b) That section 6 and 7 of the PPDA were unconstitutional to the extent that they ousted the machinery for fair administrative action and fair hearing with respect to the tender process where the funding is by donors, in which case the PPDA does not apply.

(c) Petitioner’s right to fair administrative action violated.

6. The Petitioner’s Counsel summed up its argument in the Submissions of 17th February 2014 as follows:

“Conclusion

i. My Lord the Petitioner seeks a prayer that the Clause 38. 3 of the 2nd Respondent’s Tender be declared unconstitutional. My Lord, Clause 38. 3 reads as such:

“38. 3 Upon the successful Bidder’s furnishing of the signed Contract Form and performance security pursuant to ITB Clause 40, the Purchaser will promptly notify each unsuccessful Bidder and will discharge its bid security, pursuant to ITB Clause 19”

My Lord, the Clause is in complete contravention of Section 68(2) as read with Section 67(1 &2) of the PPDA. That is not in dispute. It cannot be disputed. The only redemption for the 2nd Respondent would be the production of the Credits Agreement. That has not been done. It can therefore be inferred that the failure to produce the Agreement must be because the Agreement does not have any conflict with the PPDA to enable the 2nd Respondent to invoke the provisions of Section 6(1)

ii. My Lord if this court agrees that the inclusion of the Clause totally disenfranchise the Petitioner, as the Petitioner has no avenue to appeal as allowed under Section 93, My Lord the only avenue open is to declare the Clause as being in complete contravention of the spirit of Article 227 of the Constitution and thereby denying the Petitioner his right to fair Administrative Action as allowed under Article 47 of the Constitution.

iii. My Lord the Petitioner does consider that this Court does have the duty to weigh the rights of the Petitioner against the rights of the public at large. After all the Tender was for the purchase of syringes that were to be used by the public at large. However My lord in this instant the Republic have made it clear that the method of the procurement of goods and services is embedded in our Constitution and as such it is the duty of the Republic to demand and expect that its State Organs procure goods in a cost efficient manner. The spirit of our Constitution demands for a free, fair and accountable procurement process. The Petitioner only prays that this court is aware of the same. These sentiments were echoed by Gacheche J. NGM-Public Procurement Administrative Review Board and Others [2010] 1 EA 291 where at page 300 para f she states:

“I need not reemphasize those who are mandated with public procurement and disposal must ensure that they maintain the spirit of the Public Procurement and Disposal Act as contained in Section 2…”

Further, on the same page at para i. She comments:-

“These are issues of great public concern and in my humble opinion, the respondents and interested parties cannot now be heard to seek refuge in the holding of Republic –vs- Public Procurement Administrative Review Board ex-parte Selex Sistemi Integrati”

iv. My Lord the Petitioner readily concedes that it has, had no divine right to be awarded. It therefore submits that the duty of this Court is not to dwell on the merits of the Tender but to concentrate on the Constitutional rights of the Petitioner that have been infringed. My Lord the Constitution and the rights therein enshrined are the Supreme Laws of the Republic. Any act of omission that allows for the suspension of those rights would be to the detriment of the Rule of Law in the Republic and the harbinger of anarchy. This Court’s duty, My Lord, is to defend and uphold the Constitution at all times, as is the Petitioner’s duty as per Article 3(1) of the Constitution.”

7. The Court has set out in extenso the petitioner’s conclusion so as to properly identify the exact scope of remedies that the petitioner sought from the Court at the time of hearing there having been obvious narrowing down of the dispute between the parties to exclude claims on constitutional right to information and right to fair hearing and remedies based on the merits of the case including a rerun of the tender which had apparently been overtaken by events..

THE RESPONSES AND SUBMISSIONS BY THE RESPONDENTS

8. The 1st respondent submitted on the State’s power to enter into treaty or agreement which become part of the law of Kenya under the Constitution and which prevail in case of conflict with the provisions of the PPDA in terms of section 6 (1) and 7 (1) of the PPDA and concluded that –

“Conclusion

From the 1st Respondent’s view, the World Bank guidelines as adopted in the 2nd Respondent’s tender outlining to eligible bidders the qualification criteria, the evaluation process, clarifications notifications and appeal process, among other tender terms and conditions, was a transparent, fair process for all bidders.

The 1st respondent submits that in general procurement law and under the PPDA Act, evaluation and comparison of tender is required to be done using the procedures and criteria set out in the tender documents and no other criteria. This was observed in the tender No. KEMSA/KHSSP-01T11/2011-2013.

The Petitioner has not established a legal or factual basis to demonstrate that its constitutional rights have been violated as alleged.

The 1st respondent prays that this Honourable Court denies the Petitioner all the orders prayed by the Petitioner since he has failed to demonstrate before this Court his entitlement to such prayers.”

9. For the 2nd respondent, in addition to an a replying affidavit by Dr. John Munyu, written submissions dated 13th November 2012 set out its response in bullet points as follows:

“C. Our Response:

The process is exempt from PPDA

IBRD Guidelines apply

Contract already entered automatically on notification

International treaties are constitutional and part of our local law

We have statutes dealing with Bretton Woods Institutions

Petitioner is not a “local company”

Petitioner has not established the constitutional rights violated

The Articles violated are particularized

The Guideline alleged violated wasn’t

No factual or legal basis established.”

10. The Attorney General as the 3rd Respondent represented himself and the 1 and 2nd Interested Party and by submissions dated 12th October 2012, opposed the amended Petition on the grounds that

(a) The petitioner was stopped from challenging the constitutionality of section (1) of the PPDA because it had freely participated in the project ad was at all times aware that it was financed by the Internation development association (IDA) and that the tender was conducted through the international bidding procedures under the World Bank Guidelines on procurement which had remedies and avenues for redress which the petitioner chose not to pursue.

(b) Any treaty ratified by Kenya including the treaty by which Kenya became a member of the Bretton Woods institutions was part of the law of Kenya under the Constitution by virtue of article 2 (6) of the Constitution.

(c) Clause 38. 3 as read with section 6 (1) of the PPDA does not violate the petitioner’s rights under articles 47 and 50 of the Constitution; and that

(d) The petitioner had been provided with all the information it requested and had been given reasons as to why his bid unresponsive and consequently unsuccessful.

11. The 3rd Interested Party does not appear to have entered appearance or filed any pleadings or submissions, although the status of the Association is given in the schedule of the International Development Association Act cap 465 as –

The Association shall possess full juridical personality and, in particular, the capacity—

(i) to contract;

(ii) to acquire and dispose of immovable and movable property;

(iii) to institute legal proceedings.

12. Replying affidavit of Mary Matu, a director of the 4th Interested party sworn on 18th September 2012 took the position reiterated in its submissions dated 20th September 2014 that it was notified by the 2nd respondent that it was the successful bidder of Lot 4 of the Tender and had subsequently entered into a contract for the supply non-pharmaceuticals under LOT 4 of the Tender; that the Instructions to Bidders clause 11 permitted prospective bidders to seek clarification on the tender and that pursuant to a query raised by an interested bidder the 2nd Respondent had clarified by letters to all the bidders that the capacity of the syringe required was Needle G30 – 8mm, and that the responsiveness per lot must be at 100% as provided by clause 16. 6 of the Tender; and that the Kenyan Government was bound to comply with the provisions of the International Development Association’s Agreement, whose terms had not been shown by the petitioner to be in conflict with the PPDA in terms of section 6(1) thereof or to be unconstitutional.

13. Counsel for the parties – Mr. Khagram and Dr. Khaminwa for the petitioner; Ms. Kanyili for Ms. Nzioka for the 1st Respondent; Mr. Karega for Mr. Kipkorir for the 2nd respondent; Mr. Eredi for the 3rd respondent and the 1st and 2nd Interested Parties; and Mr. Ogamba for the 4th Interested Party – highlighted their submissions at the hearing and judgment was reserved.

ISSUES FOR DETERMINATION

14. In determining the central question of the Petition whether the petitioner’s constitutional right to a fair administrative action under article 47 of the Constitution has been violated, the Court will consider the following issues:

(a) Whether the provisions of section 6(1) and 7(1) of PPDA are unconstitutional.

(b) Whether the PPDA apply to the procurement the subject of this petition.

(c) Whether Clause 38. 3 of the 2nd Respondent’s Tender is unconstitutional.

15. The Petitioner apparently abandoned its argument to infringement of its rights to information and fair hearing, respectively, pursuant to Articles 35 and 50 of Constitution, and the Court will not consider these issues.

DETERMINATION

Whether the provisions of section 6(1) and 7 (1) of the PPDA are unconstitutional

16. Article 227 (1) of the Constitution of Kenya requires as follows:

227. (1) When a State organ or any other public entity contracts for goods or services, it shall do so in accordance with a system that is fair, equitable, transparent, competitive and cost-effective.

Article 227 (2) provides as follows:

(2) An Act of Parliament shall prescribe a framework within which policies relating to procurement and asset disposal shall be implemented and may provide for all or any of the following—

(a) categories of preference in the allocation of contracts;

(b) the protection or advancement of persons, categories of persons or groups previously disadvantaged by unfair competition or discrimination;

(c) sanctions against contractors that have not performed according to professionally regulated procedures, contractual agreements or legislation; and

(d) sanctions against persons who have defaulted on their tax obligations, or have been guilty of corrupt practices or serious violations of fair employment laws and practices.

17. The relevant sections of the Public Procurement and Disposal Act 2005 provides as follows:

6. (1) Where any provision of this Act conflicts with any obligations of the Republic of Kenya arising from a treaty or other agreement to which Kenya is a party, this Act shall prevail except in instances of negotiated grants or loans.

7. (1) If there is a conflict between this Act, the regulations or any directions of the Authority and a condition imposed by the donor of funds, the condition shall prevail with respect to a procurement that uses those funds and no others.

(2) This section does not apply if the donor of funds is a public entity.

18. I accept the primary place of the principle of constitutionality of legislation, (Hamdardda Wakhama v. Union of India (1960) AIR 554) which is something in the nature of a rebuttable presumption when considering the constitutionality of a statute or statutory provisions, grounded on the reasonableness of the purpose of the lawmakers. The Court in Hamdardda held that in determining whether the impugned enactment is unconstitutional, the court must consider that –

“[W]hat has to be ascertained is the true character of the legislation and for that purpose regard must be had to he enactment as a whole to its objects, purpose and true intention and the scope and effect of its provisions or what they are directed against and what they aim at.”

See also Lenaola J. in Samuel Momanyi v. AG & Anor. Pet. No. 341 of 2011 following Hamdardda.

19. Section 6 (1) of the PPDA ousts the provisions of the Act in cases of negotiated grants or loans where there is a conflict between the Act and any obligations of the Republic of Kenya arising from a treaty or other agreement to which Kenya is a party. It does not follow that all procurement conducted outside the PPDA is unconstitutional. Constitutionality of an procurement must be assessed on the touchstone of article 227 of the Constitution, which provides that procurement by state organ or other public entity accords to ‘a system that is fair, equitable, transparent, competitive and cost-effective.

20. Procurement can still meet the requirements of the Article 227 even where done pursuant to obligations under a treaty or other agreement or other procedure consistent with those requirements. The Constitution does not decree that public procurement may only be made under the provisions of the Act of Parliament enacted under article 227 (2) of the Constitution. The Constitution only empowers parliament to make such law as will guide the realization of the principles of public procurement set out in Article 227 (1) of the Constitution. The test, therefore, then lies with an evaluation of the procedure adopted in the procurement, and the section 6 (1) of the Act, in permitting such procurement procedure is ipso facto unconstitutional.

21. As regards section 7(1) of PPDA, while allowing the use of conditions in Donor agreements on procurement using such funds, does not apply where the donor is a public entity by virtue of section 7 (2) of the Act. The provision in my view creates an avenue for private persons to make donations for the procurement of goods, services works in which they may an interest in assisting the government to procure without the strictures of procedure on public tendering. Weighed against the purpose of accountability for the use of public funds, of whatever source, the provision of section 7 (1) with its proviso relating the donor being a person other than a public entity cannot be held to be unreasonable and unconstitutional.

22. Accordingly, I do not find sections 6 (1) and 7(1) of the Public Procurement and Disposal as being unconstitutional.

Whether PPDA applied to the tender the subject of the Petition

23. The respondent needed to demonstrate that there is in place an agreement or treaty which was in conflict with the PPDA in terms of sections 6 and 7 of the Act to warrant the use of procedure outside the Act pursuant to those provisions.

24. Section 109 of the Kenya Evidence Act is in the following terms:

109. The burden of proof as to any particular fact lies on the person who wishes the court to believe in its existence, unless it is provided by any law that the proof of that fact shall lie on any particular person.

25. It is the 2nd Respondent who in seeking to rely on the World Bank Guidelines as ousting the provisions of the PPDA had a evidentiary duty to demonstrate that the Act did not apply in view of the existence of the circumstances set out in the provisions of section 6 (1) and 7(1) of the Act.

26. Moreover, the existence of a treaty, agreement whose provisions are in conflict with the PPDA so as to justify the ouster of the PPDA is a matter within the special knowledge of the respondent who sought to rely on the World Bank Guidelines on Procurement. The burden of proof with respect to the existence of such treaty, agreement etc. lies on the respondents by virtue of section 112 of the Evidence Act, which is in the following terms:

112. In civil proceedings, when any fact is especially within the knowledge of any party to those proceedings, the burden of proving or disproving that fact is upon him.

Whether the World Bank Guidelines are unconstitutional

27. In the beginning, Article 2 of the Constitution of Kenya 2010 lays out the law on the supremacy of the Constitution in the following terms:

“2. (1) This Constitution is the supreme law of the Republic and binds all persons and all State organs at both levels of government.

(2) No person may claim or exercise State authority except as authorised under this Constitution.

(3) The validity or legality of this Constitution is not subject to challenge by or before any court or other State organ.

(4) Any law, including customary law, that is inconsistent with this Constitution is void to the extent of the inconsistency, and any act or omission in contravention of this Constitution is invalid.

(5) The general rules of international law shall form part of the law of Kenya.

(6) Any treaty or convention ratified by Kenya shall form part of the law of Kenya under this Constitution.”

28. The Constitution has provided for the incorporation of a treaty ratified by Kenya as part of the law of Kenya under the Constitution by Article 2 (6) thereof that:

2 (6) Any treaty or convention ratified by Kenya shall form part of the law of Kenya under this Constitution.

I agree with Koome, J as she then was, in Re: Zipporah Wambui Mathara (2010) eKLR that “by virtue of [Article} 2 (6) of the Constitution of Kenya 2010, International Treaties and Conventions that Kenya has ratified are imported as part of sources of the Kenya law.”

29. However, I do not agree with the suggestion inherent in the submissions made for the respondents that where such Treaty, Convention or Agreement becomes part of the law of Kenya, it thereby becomes superior to, or operate outside, the Constitution of Kenya. Such a holding would offend the principle of the Constitution. As I understand the matter, where a Treaty, Agreement or convention becomes part of the law of Kenya under the Constitution by virtue of Article 2 (6) of the Constitution, it does not make such treaty, agreement or convention superior to the Constitution; the same falls to be considered, as any law of Kenya part of which it becomes by such incorporation, against the constitutional provisions to determine its constitutional validity in terms of Article 2 (4) of the Constitution, which provides as follows:

“(4) Any law, including customary law, that is inconsistent with this Constitution is void to the extent of the inconsistency, and any act or omission in contravention of this Constitution is invalid.”

30. This is in line with principle of supremacy of the constitution and must be the consequence of such a treat agreement or convention becoming part of the law of Kenya under the Constitution in terms of Article 2 (6) of the Constitution. Considering a similar position the Court of Appeal for Eastern Africa in East African Community v. Republic (1970) EA 457, 460 held as follows:

“As we have come to the conclusion that the appeal is incompetent and should be struck out it is unnecessary to come to any conclusion on the merits of the appeal. However, as the arguments presented to us when we heard the appeal de bene esse raised certain matters of fundamental importance, we consider that it would be of general advantage if we expressed very shortly our views on some of those matters. First, it is quite clear that the Constitution of Kenya is paramount and any law, whether it be of Kenya, of the Community or of any other country which has been applied in Kenya, which is in conflict with the Constitution is void to the extent of the conflict. The courts are the guardian of the Constitution and their duty is in all circumstances to enforce its provisions as they are interpreted by the courts. Secondly, in one sense the Constitution is an Act of Parliament but it is a very special Act of Parliament. While the validity of any other Act of Parliament or law may be called in question in the courts, the validity of the Constitution, or any alteration thereof being made in accordance with the Constitution, cannot be questioned. Thirdly, the provisions of a treaty entered into by the Government of Kenya do not become part of the municipal law of Kenya save in so far as they are made such by the law of Kenya. If the provisions of any treaty, having been made part of the municipal law of Kenya, are in conflict with the Constitution, then to the extent of such conflict such provisions are void. Generally we agree with the decision of the High Court, though we consider it quite inappropriate and incorrect to describe the legislation of the Community as delegated legislation.”

31. The object [and background] of the International Development Association Act is set out in its long title and preamble as follows:

An Act to provide for acceptance by Kenya of an international agreement for the establishment and operation of an International Development Association and to provide for matters related thereto

WHEREAS on the 26th January 1960, the executive directors of the International Bank for Reconstruction and Development approved Articles of Agreement (hereafter in this Act referred to as the Agreement) providing for the establishment and operation of an international body to be called the International Development Association (hereafter in this Act referred to as the

Association):

AND WHEREAS copies of the text of the Agreement have been laid before the National Assembly:

AND WHEREAS it is expedient that Kenya should become a member of the Association and that provision should be made for acceptance by Kenya of the Agreement and for carrying out the obligations of Kenya thereunder:

32. It was not demonstrated that the international agreement for the establishment and operation of 3rd Interested Party whose acceptance by Kenya was the subject of the International Development Association Act, cap 465, for the use in procurement funded by the 3rd Interested Party of Guidelines made by the World Bank. If such agreement existed, it became part of the law of Kenya by virtue of Article 2 (6) of the Constitution, and subject to the Constitution under Article 2 (4) thereof.

Whether Clause 38. 3 of the 2nd Respondent’s Tender is unconstitutional.

33. There was obvious conflict between the World Bank tender procedure and the Public Procurement and Disposal Act (PPDA), cap 412C is the requirement under the latter for notification of all bidders of the successful bidder under section 67 as follows:

67. (1) Before the expiry of the period during which tenders must remain valid, the procuring entity shall notify the person submitting the successful tender that his tender has been accepted.

(2) At the same time as the person submitting the successful tender is notified, the procuring entity shall notify all other persons submitting tenders that their tenders were not successful.

(3) For greater certainty, a notification under subsection (2) does not reduce the validity period for a tender or tender security.

On the other hand, the World Bank Guidelines permitted the notification of successful bidder and formation of contract with such bidder before the notification to unsuccessful bidders.

34. The impact of the conflict is that under the unsuccessful bidder has, under the provisions of the PPDA, an opportunity to challenge the award of the Tender to the successful bidder which he cannot do under the provisions of the World Bank Guidelines incorporated into the Tender the subject of this petition.

35. Under the PPDA, an unsuccessful bidder aggrieved by a tendering process is entitled to a review under section 93 and an appeal to the High Court under section 100 of the Act. Sections 93 and 100 are in relevant parts in the following terms:

93. (1) Subject to the provisions of this Part, any candidate 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 as in such manner as may be prescribed.

(2) The following matters shall not be subject to the review under subsection (1)—

(a) the choice of a procurement procedure pursuant to Part IV;

(b) a decision by the procuring entity under section 36 to reject all tenders, proposals or quotations;

(c) where a contract is signed accordance to section 68; and

(d) where an appeal is frivolous.

100. (1) A decision made by the Review Board shall, be final and binding on the parties unless judicial review thereof commences within fourteen days from the date of the Review Board’s decision.

(2) Any party to the review aggrieved by the decision of the Review Board may appeal to the High Court, and the decision of the High Court shall be final.

This procedure for challenging the procurement was not available under the World Bank Guidelines incorporated in the Tender by the 2nd Respondent.

36. The Instructions to Bidders (ITB) at Clauses 30-40 provided for prior notification and contract with the successful bidder before the notification of the unsuccessful bidders, as follows:

“38. Notification of Award

38. 1Prior to the expiration of the period of bid validity, the Purchaser will notify the successful Bidder in writing by registered letter or by cable, to be subsequently confirmed in writing by registered letter, that its bid has been accepted.

38. 2The notification of award will constitute the formation of the Contract.

38. 3Upon the successful Bidder’s furnishing of the signed Contract Form and performance security pursuant to ITB Clause 40, the Purchaser will promptly notify each unsuccessful Bidder and will discharge its bid security, pursuant to ITB Clause 19.

38. 4 If, after notification of award, a Bidder wishes to ascertain the grounds on which its bid was not selected, it should address its request to the Purchaser. The Purchaser will promptly respond in writing to the unsuccessful Bidder.

38. 5 The Purchaser shall publish in UNDB online and in the dgMarket the result identifying the bid and lot numbers and the following information: (i) name of each Bidder who submitted a Bid; (ii) bid prices as read out at bid opening; (iii) name and evaluated prices of each Bid that was evaluated; (iv) name of bidders who bids were rejected and the reasons for their rejection; and (v) name of the winning Bidder, and the price it offered, as well as the duration and summary scope of the contact awarded. After publication of the award, unsuccessful bidders may request in writing to the Purchaser for a debriefing seeking explanations on the grounds on which their bids were not selected. The Purchaser shall promptly respond in writing to any unsuccessfully Bidder who, after Publication of contract award, requests a debriefing.

39. Signing of Contract

39. 1 Promptly after the Purchaser notifies the successful Bidder that its bid has been accepted, the Purchaser will sent the Bidder the Contract Form provided in the Bidding Documents incorporating all agreements between the parties.

39. 2Within twenty-eight (28) days of receipt of the Contract Form, the successful Bidder shall sign and date the Contract Form and return it to the Purchaser.

40. Performance Security

40. 1 Within twenty-eight (28) days of the receipt of notification of award from the Purchaser, the successful Bidder shall furnish the performance security in accordance with the Conditions of Contract, using the Performance Security Form provided in the Bidding Documents, or in another form acceptable to the Purchaser.

40. 2 Failure of the successful Bidder to comply with the requirement of ITB Clause 39 or ITB Sub-Clause 40. 1 shall constitute sufficient grounds for the annulment of the award and forfeiture of the bid security, in which event the Purchaser may make the award to the next-lowest evaluated bid submitted by a qualified Bidder or call for new bids.”

37. Clearly, the World Bank Guidelines did not make provision for challenge by an unsuccessful bidder of an award of Tender to a successful bidder as provided under the PPDA where an unsuccessful bidder has right to seek administrative review to the Review Board established under the Act, with judicial review thereof to the High Court and an appeal on the merits to the High Court. All these procedures are time-lined so that least disruption of the procurement process is occasioned, consistently with efficiency and cost-effectiveness required by Article 227 of the Constitution of Kenya 2010.

Whether petitioner estopped by participating in the Tender under World Bank Guidelines

38. The fact that the petitioner had participated in the Tender does not take away his right to contend that the tender was unconstitutional because constitutional rights are no t subject to waiver by acquiescence or estoppel. I agree with the well put statement on the matter by the Supreme Court of India in Tellis & Ors. v. Bombay Municipal Corp.& Ors(1987) LRC351, 365 that there can be no estoppel against the Constitution:

“It is not possible to accept the contention that the petitioners are stopped form setting up their fundamental rights as a defence to the demolition of the huts put up by them on the pavements or parts of public roads. There cannot be estoppel against the Constitution. The Constitution is not only the paramount law of the land but it is the source and sustenance of all laws. Its provisions are conceived in public interest and are intended to serve a public purpose. The doctrine of estoppels is based on the principle that consistency in word and action imparts certainty and honesty to human affairs. If a person makes a representation to another, on the faith of which the latter acts to his prejudice, the former cannot resile from the representation made by him. He must make it good. This principle can have no applications to representations made regarding regarding the assertion or enforcement of fundamental rights. For example, the concession made by a person that he does not possess and would ot exercise his free speech and expression or the right to move freely throughout the territory of India cannot deprive him of those constitutional rights, any more than a concession that a person has no right of personal liberty can justify his detention contrary to the terms of Article 22 of the Constitution. Fundamental rights are undoubtedly conferred by the Constitution upon individuals which have to be asserted and enforced by them, if those rights are violated. But, the high purpose which the Constitution seeks to achieve by conferment of fundamental rights is not only to benefit individuals but to secure the larger interests of the Community…. No individual can barter away the freedoms conferred upon him by the Constitution. A concession made by him in a proceeding, whether under a mistake of law or otherwise, that he does not possess or will not enforce any particular fundamental right, cannot create an estoppel against him in a that or any subsequent proceeding. Such a concession, if enforced, would defeat the purpose of the Constitution. Were the argument of estoppel valid, an all-powerful State could easily tempt an individual to forgo his precious personal freedoms on promise of transitory, immediate benefits.”

CONCLUSION

39. The court does not find that in making provision for the ousting of the PPDA in cases of conflict with any Treaty or Agreement where the funding for the procurement is by negotiated grant or loan, sections 6 and 7 of the Act are not unconstitutional. The relevant Article 227 of the Constitution on requires that a procurement process be fair etc. These conditionalities may be achieved through the special legislation that Parliament is mandated to enact under Article 227 (2) of the Constitution or other lawful procedure that meets the criteria set out in the Article 227 (1) of the Constitution.

40. On the facts of this case, the court does not find that the 2nd respondent has demonstrated as required by sections 109 and 112 of the Evidence Act, that there was in existence an treaty or agreement whose terms were in conflict with the provisions of the PPDA to justify the invocation of the ouster provisions of section 6 (1) and 7 (1) of the PPDA. Although the respondent sought to shift this evidential responsibility to the petitioner, it is the 2nd Respondent that conducted the procurement under the World Bank Guidelines outside the terms of the PPDA and sought to rely on the ouster clauses of the Act. In these proceedings, the 2nd respondent and its supporting respondents were obliged to prove that the ouster clauses had come into effect on account of an existing conflict between obligations under an Agreement to which the Government was a party and the provisions of the PPDA. No such Agreement was demonstrated. There was therefore no occasion for the use of procedures outside the PPDA. In such circumstances the procurement was carried outside the statutory authority of PPDA and was therefore ultra vires.

41. Even if the ratification of the Treaty on International Development Association and subsequent enactment of the International Development Association Act cap 465 were to be taken to imply an Agreement for the use of the World Bank Guidelines on Procurement, which might have justified the use of the procedure outside the PPDA, such procedure must accord to the Constitution as the basic law of Kenya to which all laws applied in Kenya are subject. Incorporation of a Treaty or Convention into the law of Kenya by virtue of Article 2 (6) the Constitution means that such law, being part of the law of Kenya is subject to the basic law of the Constitution. The incorporation by Article 2 (6) of the Constitution of any Treat or Covention does not make such Treaty and Covention a law unto itself, outside the Constitution. The Article is clear that such treaty or convention becomes part of the law of Kenya under the Constitution. Such treaty or convention must, in my view, therefore be subject to the provisions of the Constitution, by Article 2(1) whereof all inconsistent law is declared null and void to extent of its inconsistency with the Constitution.

42. The central inquiry in this Petition, therefore, becomes whether the World Bank Guidelines under which the procurement was conducted was unconstitutional for breaching the requirements of Article 227 (1) of the Constitution. The tendering was conducted under the World Bank Guidelines on Procurement which did not provide any facility for the challenge of the tendering process and award of Contract. All the Guidelines provided for was administrative debriefing for the unsuccessful bidders to be informed of the reasons for their failure. This offended the petitioner’s right to fair administrative action in challenging the award to the successful bidder, which must be a component of the tendering process as is indeed provided for under the PPDA by way of administrative review, judicial review and appeal on the merits.

43. As contract may already have been fully executed, remedy lies in damages for breach of constitutional rights. Article 23 (3) of the Constitution provides for the award of damages as a remedy for violation of constitutional breach of fundamental rights and freedoms. The Court cannot act in vain and as conceded by the petitioner, since the contract the subject of the tender may already have been executed, the court cannot cancel the contract and direct fresh tendering as sought in prayer (b) of the Petition.

44. The Court was not convinced by the petitioner’s argument that the 1st and 3rd respondent had a positive constitutional duty to advise on the constitutionality of the PPDA or other procedures used by the 2nd respondent in its procurement role and the court is, therefore, unable to the declaration of breach of such duty as sought by the petitioner.

ORDERS

45. Accordingly, for the reasons set out above, the Court makes the following orders on the Amended Petition dated 23rd August 2012:

(a) A declaration that Clause 38. 3 of the 2nd Respondent’s Tender No. KEMSA/KHSSP-OIT11/2011-2013 PROCUREMENT OF NON PHARAMACEUTICALS (LOTS) was unconstitutional for offending the provisions of Article 47 of the Constitution on fair administrative action.

(b) A declaration that the petitioner’s constitutional right to fair administrative action under Article 47 of the Constitution was violated by the use by the 2nd Respondent of the World Bank’s Guidelines: Procurement under IBRD Loans and IDA Credits’, which did not afford an opportunity for administrative review, judicial review or appeal on the merits against the procurement process and the award of the Tender to the successful bidder and the petitioner is entitled to damages for breach of its constitutional right to fair administrative action.

(c) The quantum of damages for breach by the 2nd Respondent of the petitioner’s right to fair administrative action will be determined upon presentation by the parties of submissions thereon together with any relevant affidavits as the parties may wish to present.

(d) The 2nd respondent will pay to the petitioner its Costs of the Petition and the other parties will bear their own Costs.

46. The Court is grateful to counsel for their thorough research and presentation, and deeply regrets the delay in delivery of judgment occasioned by the heavy workload of the Court.

EDWARD M. MURIITHI

JUDGE

DATED AND DELIVERED THIS 29TH DAY OF OCTOBER 2015.

M. J. ANYARA EMUKULE (MBS)

JUDGE

In the presence of: -

………….…………………….……. for the Petitioner

………….………………………...... for the 1st Respondent

………….………………………….. for the 2nd Respondent

………….…………………………...for the 3rd Respondent

………….………………………...... for the 1st Interested Party

………….…………………….......... for the 2nd Interested Party

………….………………………...... for the 3rd Interested party

………….…………………….......... for the 4th Interested party

………….…………………….......... Court Assistant.