KENYA'S APPELLATE COURT UPHOLDS SICPA STAMPS CONTRACT

The Court of Appeal has overturned a High Court decision nullifying a KRA tender for provision of an excisable goods management system awarded to a company called SICPA in 2013.

SICPA, an international provider of security inks as well as secured identification, traceability and authentication services, had originally been awarded a contract by Kenya's taxman in 2013, to produce secure new generation excise stamps.

In 2017, following the enactment of legal notice by the government increasing the number of goods to be covered under the excise stamps regime, it was realized that the original contract to SICPA could not cover the expanded scope of work and had to be cancelled and reissued again; this time under direct award. The direct award was defended on the basis that SICPA had already set up the systems and software having been legally awarded the original tender, and that issuing a parallel contract would be costly and inconveniencing to manufacturers already using the system.

The award of the tender to provide the system as well as the production of excise duty stamps had been challenged by public litigation specialist, Okiyah Omtatah, 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.

Concurring, the High Court in 2018 nullified the tender finding that it was awarded irregularly contrary to the procurement law in place, that public participation was inadequate, and that it curtailed access to basic rights such as access to water.

A three-judge bench of the Court of Appeal however, has now overturned that decision finding 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, Omtatah, ought to have proved his allegations having averred them in the first place.