James Oyondi t/a Betoyo Contractors & another v Elroba Enterprises Limited & 8 others [2019] KECA 916 (KLR)
The bottom line
#Kenya's Court of Appeal confirmed that procurement review cases collapse unless the accounting officer is named as a party and the bidder claims actual loss.
What this practically means
#Executive summary
#Questions the Court framed
#The issues the Court set itself to decide, in its own words.
- 1.Whether the legal consequences of the non-joinder of KPA's accounting officer in the review proceedings before the Board rendered those proceedings incompetent
- 2.Whether the appellants had locus standi to file review proceedings before the Board under section 167(1) of the PPADA without claiming loss or damage
- 3.Whether the learned Judge's dispositive orders directing execution of the contracts should be upheld
- 4.Whether the learned Judge's order on costs was proper
Key legal issues
#Non-joinder of the accounting officer as a party to review proceedings before the Board
Section 170 of the PPADA expressly and compulsorily requires the accounting officer of the procuring entity to be a party; the Board erred in importing the law of agency, and the proceedings were incompetent and a nullity properly quashed
The court compared section 170 of the PPADA with section 96 of the repealed Public Procurement and Disposal Act 2005. The repealed statute named the procuring entity; the current statute deliberately replaced it with the accounting officer. Parliament elected to locate responsibility and capacity on the accounting officer specifically, so the Board's resort to principal-and-agent reasoning was misplaced. When a statute directs in express terms who ought to be parties, a litigant cannot pick and choose or belittle non-compliance. The court endorsed the Supreme Court's Salat decision rejecting the use of Article 159 and the Oxygen principles to overthrow rules of procedure.
Locus standi to seek administrative review before the Board under section 167(1) of the PPADA
A candidate or tenderer must at the very least claim to have suffered, or to be at risk of suffering, loss or damage; the appellants, eliminated at the preliminary stages without pleading any loss, were busybodies whom section 167(1) was designed to keep out
Section 167(1) is a threshold requirement confining administrative review to candidates or tenderers with legitimate grievances. Not every candidate or tenderer may file for review, otherwise the Board would be inundated with frivolous applications. The appellants never pleaded nor attempted to show loss or damage or the risk of it, and were eliminated before even the evaluation stage. The Board ought to have ruled that they had no locus, and the learned Judge was right to reverse it on that account.
Appellate interference with a first-instance judge's exercise of discretion
The Court of Appeal pays due regard to a first-instance judge's exercise of discretion and is slow to disturb it unless it was not exercised judicially and judiciously, following Mbogo v Shah
Relying on Mbogo & Anor v Shah and subsequent authorities, the court framed the applicable standard: it will not interfere with the exercise of discretion unless the judge misdirected himself in some matter and arrived at a wrong decision, or it is manifest from the case as a whole that the judge was clearly wrong and there has been misjustice. On both jurisdictional issues the learned Judge addressed his mind correctly to the law, so his decision could not be faulted.
Costs in public procurement proceedings
The learned Judge's order that all respondents pay the petitioners' costs was reversed; in public procurement-related proceedings the proper order is that each party bear its own costs
Counsel for the respondents had submitted that the preponderance of jurisprudence in public procurement is that under section 175(6) of the PPADA there should be no imposition of costs and each party should bear its own; KPA's counsel agreed that no party ought to be condemned in public procurement-related proceedings. The court agreed that the nature of the proceedings called for parties bearing their own costs, and reversed the costs order only, upholding the rest of the judgment.
Legal principles established
#- Under section 170 of the PPADA, it is mandatory that the accounting officer of the procuring entity, and not merely the procuring entity itself, be joined as a party to review proceedings before the Public Procurement Administrative Review Board; non-joinder renders the proceedings incompetent and a nullity
- A candidate or tenderer must, as a threshold requirement under section 167(1) of the PPADA, claim to have suffered or to be at risk of suffering loss or damage before filing a review application before the Board
Court orders
#- 1.The appeal is dismissed
- 2.The judgment of the High Court is upheld save as to costs
- 3.The parties shall each bear their own costs of this appeal
The bench
#One judgment of the whole court — no separate or dissenting opinions.
- On appeal from
- High Court of Kenya at Mombasa
- HC Petition No. 57 of 2017
- Jurisdiction invoked
- First appellate jurisdiction over the High Court under the Constitution and appellate procedure; the appeal challenged the High Court's exercise of discretion in quashing the Review Board's decision by certiorari
Relief refused
#The appellants' appeal against the quashing of the Board's decision by certiorari and the direction to execute contracts in favour of the successful tenderers
The Board proceedings were a nullity for non-joinder of the accounting officer, and the appellants lacked locus standi under section 167(1) of the PPADA
Appellants' challenge to the costs order (sought costs against respondents as per memorandum of appeal)
The proper order, given the nature of public procurement proceedings, was that each party bear its own costs
Costs
The parties shall each bear their own costs of this appeal; the High Court's order that all respondents pay the petitioners' costs was reversed
Quotable passages
#Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.
Under the PPADA however, there is no such leeway and the requirement is explicit and the language compulsive that it is the accounting officer who is to be a party to the review proceedings.
When a statute directs in express terms who ought to be parties, it is not open to a person bringing review proceedings to pick and choose, or to belittle a failure to comply.
It seems plain to us that in order to file a review application, a candidate or tenderer must at the very least claim to have suffered or to be at the risk of suffering loss or damage.
The upshot is that this appeal is dismissed. The judgment of the High Court is upheld save as to costs which shall be borne by the respective parties their own.
The parties shall each bear their own costs of this appeal.
Issues in the judgment
#The judgment attributes the affidavit supporting the appellants' response to 'John Oyondi', whereas the appellant is elsewhere named 'James Oyondi'
Counsel for KPA is referred to as both 'Mrs. Ikegu' and 'Mrs. Ikego' in the judgment
Citation to the Central Bank of Kenya v Omtatah decision is printed as '[2018] eKRL' rather than 'eKLR'
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "James Oyondi t/a Betoyo Contractors & another v Elroba Enterprises Limited & 8 others [2019] KECA 916 (KLR)", Case Analysis (2019). Civil Appeal No. 131 of 2018. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2019/916/eng@2019-03-07
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.