Supreme Court Petition No. 13 & 18 (E019) of 2020
Kenya Railways Corporation (KRC) and 2 others v Okiya Omtatah Okoiti and 3 others

A government to government procurement transaction is not subject to the Public Procurement and Disposal Act (PPDA), the Supreme Court holds.

Introduction

The Supreme Court has finally considered the question of the legality of the Standard Gauge Railway (SGR) project’s procurement process. The dispute which initially commenced at the High Court by way of two consolidated petitions, one by Okiya Omtatah, and the other by the Law Society of Kenya (LSK), challenging the procurement process of the construction of the SGR and the resultant contracts in favour of the China Road and Bridge Corporation (CRBC), has now been put to rest by the Supreme Court in a judgment delivered on 16th June 2023. The court has held that the process was undertaken in conformity with the provisions of Article 227 of the Constitution of Kenya, 2010; and that the process was a government to government contract hence exempted from the provisions of the PPDA, 2005 by virtue of section 6(1) of the Act (as the applicable law then).

Issues

1. Whether the SGR procurement process complied with article 227 of the Constitution of Kenya, 2010 as read with the provisions of the PPDA, 2005?
2. Whether illegally acquired documents (held by the state) can be rendered admissible in a court of law?

Applicable law

Article 227 of the Constitution of Kenya, 2010 is the governing provision on the procurement of public goods and services by the state and state entities. The law requires state organs when contracting for goods or services to do so in accordance with a system that is fair, equitable, transparent, competitive and cost effective. Further, section 6 (1) of the PPDA 2005 (now repealed by the PPDA, 2016) stipulates, that subject to the Constitution, where any provision of this Act conflicts with any obligations of the Republic of Kenya arising from a treaty, agreement or other convention ratified by Kenya and to which Kenya is party, the terms of the treaty or agreement shall prevail.

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