Kenya’s Court of Appeal overturns decision on SICPA tender
In a landmark ruling, Kenya’s Court of Appeal has overturned a High Court decision nullifying a KRA tender for provision of an excisable goods management system awarded to Swiss company SICPA in 2013.
The tender had been challenged on the grounds that it contravened the laws of Kenya including lack of public participation, denying access to socio-economic rights, and violating the public procurement rules.
However, the Court of Appeal found that the trial judge misapplied the law by relying on the procurement law that came into place in 2015, rather than the older Act of 2005 which was in place at the time the original tender was awarded.
The Appellate Court also found that it was not feasible to expect a fresh tender award to be issued when already SICPA had been awarded the tender in 2013 and the procuring entity was merely expanding the scope of goods to be covered under the system.
The judges also found that the lower Court erred in shifting the burden of proof to the procuring entity, KRA, to prove that tendering was done procedurally, whereas the accuser, ought to have proved his allegations having averred them in the first place.
The Court of Appeal's ruling is a major victory for KRA and SICPA, and it provides much-needed clarity on the application of public procurement laws in Kenya.
Experts say the Court of Appeal's ruling has a number of implications for the public sector and the business community in Kenya.
First, it confirms that the procurement law in place at the time of awarding a tender is the one that applies, even if the law is subsequently amended. This means that businesses can be confident that they will not be penalized for changes in the law after they have been awarded a tender.
Second, the ruling clarifies that the burden of proof lies with the accuser to prove that a tender was awarded irregularly. This means that the procuring entity does not have to prove that it followed the law, unless the accuser has provided evidence to suggest otherwise.
Third, the ruling confirms that the procuring entity can expand the scope of work under an existing tender, without having to go through a fresh tendering process. This is provided that the expansion is within the scope of the original tender and that it is not feasible to issue a fresh tender.
The Court of Appeal's ruling is a welcome development for the public sector and the business community in Kenya.
Apart from Kenya and Uganda where the Swiss company operates, SICPA is providing Security inks for Banknotes, Passports, Traceability and Anti-Counterfeiting solutions in Tanzania including the Tanzania Revenue Authority’s electronic tax stamps which has been hailed as a great tool that has curbed tax evasion
