Automated Summary
Key Facts
Auto Terminal Japan Limited (ATJ) was debarred for three years by the Public Procurement Regulatory Authority (1st Respondent) and the Public Procurement Regulatory Board (2nd Respondent) in consolidated debarment applications (No. 4 and 5 of 2021). The debarment followed a 2019 audit report by the Auditor General (1st Interested Party) that found ATJ submitted false information about its qualifications in procurement processes under the Public Procurement and Asset Disposal Act (PPADA), specifically Section 41(1)(d). The 2nd Interested Party, Dr. Charles Nzai, separately requested debarment in March 2021, citing non-disclosure of material information. ATJ challenged the debarment in court, arguing violations of constitutional rights to fair hearing (Articles 47 and 50) and procedural impropriety, including denial of cross-examination. The court upheld the debarment, finding the audit process and committee proceedings lawful, with ATJ given adequate opportunity to respond through written submissions and interviews during the audit.
Issues
- The first issue is whether the respondents' decision dated 2nd June 2021 violated the applicant's rights under Article 10(1)(a), 47(1), and 50 of the Constitution of Kenya, specifically the right to a fair hearing and lawfulness of administrative action.
- The second issue examines if the debarment proceedings by the respondents were in violation of Regulation 22 of the Public Procurement and Asset Disposal Regulations, particularly concerning procedural requirements and jurisdiction.
- The third issue challenges whether the 1st Interested Party acted ultra vires by exceeding its constitutional mandate under Article 229 of the Constitution and the Public Audit Act, 2015, in auditing third parties and recommending debarment.
- The fourth issue assesses if the respondents' decision to debar the applicant was irrational and unreasonable, requiring the court to determine if the decision fell outside the range of permissible administrative actions.
Holdings
- The court found the debarment decision rational and within legal bounds. The debarment committee's reliance on the audit report and the 2nd Interested Party's evidence was justified under the PPADA. The decision was based on valid grounds (false information in procurement) and followed prescribed procedures, meeting the threshold for rationality and avoiding Wednesbury unreasonableness.
- The court held that there were two competent requests for debarment before the debarment committee. The first request originated from the Auditor General's special audit report, and the second from the 2nd Interested Party. Both were deemed valid under the Public Procurement and Asset Disposal Act (PPADA) and the Public Audit Act. The committee had jurisdiction to process these requests, and the form of the debarment request did not invalidate the proceedings.
- The court determined that the applicant was afforded a fair hearing under Articles 47 and 50 of the Constitution. The applicant was given opportunities to respond to the audit report and submit evidence, including through a replying affidavit. The debarment committee's procedure, which did not require cross-examination, was deemed lawful and compliant with the Fair Administrative Action Act (FAAA).
- The court concluded that the debarment proceedings did not disregard stay orders. The stay orders referenced in the applicant's case applied to a different company (M/s EAA Co. Ltd) and not the current applicant. The debarment committee's actions were not ultra vires as the applicant was not a party to the prior judicial review applications.
Remedies
The application dated 8th of April 2022 and amended on 16th May 2022 is dismissed with costs to the respondents and Interested Parties, as the court found no merit in the applicant's claims.
Legal Principles
- The court emphasized judicial review is concerned with the decision-making process, not the merits of the decision. It held that decisions are only reviewable for ultra vires actions, irrationality, or procedural impropriety. The Wednesbury unreasonableness test was applied to determine if the debarment committee's decision was objectively irrational.
- The court considered whether the applicant was denied a fair hearing under Articles 47 and 50 of the Constitution. While acknowledging cross-examination as a component of fair administrative action (Edward R. Ouko case), it found the debarment committee's procedures met natural justice requirements by allowing written responses and documentary evidence.
- The court applied the burden of proof principles under Sections 107 and 109 of the Evidence Act, requiring the applicant to demonstrate specific contraventions of constitutional rights. The applicant's claims of procedural unfairness were dismissed as unproven.
Precedent Name
- Republic v Public Procurement Administrative Review Board & another Ex parte Express DDB Kenya Limited
- Edward R. Ouko v Speaker of the National Assembly & 4 others
- Republic v Public Procurement Administrative Review Board & another Ex parte Kenya Power and Lighting Company Limited
- Speaker of the National Assembly v. James Njenga Karume
- SGS Kenya Ltd vs. Energy Regulatory Commission, Public Procurement Administrative Review Board and Intertrek Testing (EA) Ltd
- Diana Ketbi Kilonzo & Another v IEBC & 10 Others
- Alfred Nganga Mutua & 2 others v Wavinya Ndeti & another
- Kinyanjui Kamau vs. George Kamau
- Anisminic Ltd Vs Foreign Compensation Commission
Cited Statute
- Evidence Act (Cap 80)
- Constitution of Kenya, 2010
- Fair Administrative Action Act
- Public Procurement and Asset Disposal Act (No. 33 of 2015)
- Interpretation and General Provisions Act
- Public Audit Act, 2015
- Public Procurement and Asset Disposal Regulations 2020
- Statutory Instruments Act
Judge Name
A. K. Ndungu
Passage Text
- The court held that the Debarment Committee's decision to debar the applicant was not irrational or unreasonable, emphasizing that the committee lawfully exercised its statutory power based on valid grounds under section 41 of the PPADA.
- The court determined that the applicant was accorded a fair hearing, as the Debarment Committee provided a reasonable opportunity to respond through written submissions and interviews, aligning with constitutional principles of procedural fairness.
- The court ruled that the Auditor General's audit report and subsequent debarment recommendation were within statutory authority, noting that deviations from prescribed forms do not invalidate the request if they do not mislead or affect substance.