The Supreme Court building in Nairobi. The apex court found that Parliament adhered to the required legislative process of public participation when Finance Bill, 2023 was enacted.
An eye-catching legal dispute is unfolding at the Supreme Court, where judges are expected to determine the veracity of anti-corruption requirements in the public procurement process.
At the heart of the dispute is a decision by the Kenya Bureau of Standards (Kebs) to bar companies, both local and foreign, implicated in corruption from participating in a tender for printing standardisation mark stickers.
Kebs introduced a mandatory pre-qualification clause in the documents for the international tender floated last year.
The clause stated that "the tenderer or its associates must not have been convicted or paid fines anywhere in the world, directly or indirectly, for any irregularities regarding government contracts such as bribery or organizational deficiency.”
Swiss multinational security printer SICPA SA was aggrieved by the clause and believes the requirement was introduced to unfairly lock it out of the lucrative contract.
Questioning the legal basis for the inclusion of the clause described as "organizational deficiency," the firm said it was not anchored in any law and was targeted to exclude it from participating in the tender. It noted that the pre-qualification requirement was not included in other Kebs tender documents.
The international tender was a three-year contract "for the provision of printing Kebs Standardisation Mark Stickers, Kenya."
' Expunge the offensive clause'
The dispute began at the Public Procurement Administrative Review Board in April 2024, where the company sought an order compelling Kebs to expunge the "offensive" clauses on eligibility and qualifications. It lost the case at the first stage after the board, chaired by Mr George Murugu, dismissed the request.
The company suffered a string of other losses at the High Court and the Court of Appeal, where judges refused to strike out the alleged offensive clause.
The judges dismissed the company’s argument that the pre-qualification requirement was unlawful and unconstitutional.
The Court of Appeal, in its judgment dated August 2, 2024, held that a procuring entity was permitted to customize its bid documents to suit its needs.
The company disclosed to the court that it had previously entered into what it described as a settlement with the Attorney General of Switzerland, pursuant to which it resolved a dispute relating to “organizational deficiency”—a term it claimed is undefined in Kenyan law.
It maintained that the fine it paid in Switzerland did not amount to an admission of culpability.
But the Court of Appeal judges said: “If that was the case, one wonders why then the company found the clause offensive in Kenya.”
In its determination on the constitutionality of a procurement clause disqualifying prospective bidders involved in irregularities in government contracts, the Court of Appeal said the clause was aimed at ensuring that public procurement and asset disposal was not polluted by unethical and unscrupulous tenderers.
“This being an international tender, it was important that the bidders be entities of proven ‘corporate hygiene’ both in Kenya and in the countries where they are incorporated or other countries where they operate,” said the appellate judges.
“There was nothing wrong, unconstitutional, or impermissibly discriminatory about the disputed clause. If anything, the clause met the constitutional muster in Articles 10 and 227 of the Constitution,” reads the verdict.
Feeling aggrieved by the ruling, the company moved to the Supreme Court seeking to reverse the judgment.
It received relief last Friday after the Supreme Court admitted its late appeal, having failed to lodge the documents within the stipulated 45-day timeline.
With the Court of Appeal judgment delivered on August 2, 2024, the appeal to the Supreme Court was supposed to be filed by September 16.
Its lawyer, Kithinji Marete, told the Supreme Court that the petition concerns constitutional interpretation and application, since the Court of Appeal made far-reaching pronouncements regarding the interpretation and application of the Constitution.
The constitutional matters now set for litigation include whether a procuring entity can unilaterally apply an eligibility criterion known as ‘organizational deficiency’—a term not recognized by the Constitution, the Public Procurement and Asset Disposal Act, or any law in Kenya.
In addition, whether the inclusion of such a criterion was unconstitutional and impermissibly discriminatory.
Further, whether such inclusion could result in repeated punishment of eligible bidders, amounting to double jeopardy.
jwangui@ke.nationmedia.com
