Whether Tribunals are Bound by Their Previous Decisions

Summary

In SGS Kenya Limited v Energy Regulatory Commission & 2 others [2020] eKLR, the Supreme Court of Kenya had occasion to decide on whether a specialized tribunal such as the Public Procurement Administrative Review Board (PPARB) was bound by its own previous decisions, i.e. whether the common law principle of stare decisis applied to such tribunals. The Supreme Court held that tribunals were not bound by their previous decisions.

Background

The Energy Regulatory Commission (ERC), on or about 12 May 2017, floated tender number ERC/PROC/4/3/16-17/119, for the marking and monitoring of petroleum products, a service meant to curb adulteration of fuel. The tender attracted three (3) bids which were opened on 31 May 2017, with the responding firms being SILPA SA, Intertek Testing Services (EA) Ltd, and SGS Kenya Ltd (SGS).

ERC appointed an evaluation committee which duly evaluated the bids, on the basis of technical and financial criteria. The evaluation committee recommended, on 30 June 2017, that the contract for the provision of petroleum-marking and monitoring services be awarded to SGS, at an annual cost of US$ 2,760,844.72. This was on the basis that SGS had attained the highest score, and had been the lowest bidder. ERC, in the course of its recommendation upon the bids received, thus remarked in its evaluation report:

“General Observation

(a) The increasing need of detection of adulteration by use of Jet 1 ought to have been captured in the terms of reference for this tender. This is so because Jet A1 is never marked unlike illuminating kerosene and there is reliable information that the perpetrators of adulteration have now shifted to the use of jet A1 as an adulterant for diesel. Further, the Commission is now aware of an existing technology that can easily detect Jet A1 in motor fuel.

(b) The team also noted the need for a detailed explanation of how the test-results from the monitoring teams are to be transmitted to the client. To this end…the advantage of use of a real-time and tamper-proof mechanism that would provide more authentic results.”

Taking into account the existence of the technology referred to in the general observations, the ERC’s Acting Director for Petroleum, gave an opinion on 7 July 2017, recommending to ERC’s Acting Director-General, that the procurement process be terminated, and then re-commenced, with the requirement that the said technological elements be incorporated in the tender, and with reference to the monitoring of the petroleum service. The Acting Director-General considered this opinion, as well as that of ERC’s Head of Procurement, and on that basis, approved the recommendation for termination, by virtue of Section 63 (1) (a) of the Public Procurement and Asset Disposal Act, 2015 (the Act). The decision to terminate the tender was communicated to all bidders, as required by Section 63(4) of the Act.

SGS was aggrieved by the decision to terminate the tender, and filed a request for review, before the PPARB, seeking orders that the said tender-termination be annulled. PPARB, by its decision of 1 August 2017, disallowed the request for review. SGS thereafter moved to the High Court, seeking a judicial review which, the High Court granted. The Board appealed against the decision of the High Court and the Court of Appeal overturned the said decision. SGS then appealed to the Supreme Court seeking to have the matter certified as one of general public importance under Article 163(4) (b) of the Constitution an application which was allowed by the Appellate Court on 19 December 2019, upon a single issue, i.e. whether tribunals are bound by the doctrine of stare decisis. The petitioner filed a petition of appeal in this Court, thereafter, on 22 January 2019

Held

The Supreme Court of the Republic of Kenya, after finding that a party that had sought to appeal under article 163 (4) (b) of the Constitution could not purport to also appeal under article 163 (4) (a) of the Constitution and could not introduce issues that were not contemplated by the certification under article 163 (4) (b) of the Constitution, found on the single important issue that such a variegated range of implementation scenarios, calls for flexibility in the regulatory scheme and further, that in principle, matters on the agenda of an administrative tribunal will merit determination on the basis of the claims of each case, and will depend on the special factual dynamics and that administrative decision-makers should have significant flexibility, in responding to changes that affect the subject-matter before them. As such, tribunals were not bound by their previous decisions.

Our comments

There can be no doubt that the Supreme Court was correct in its finding that tribunals are not bound by their previous decisions. Quite apart from the reasoning of the court it is clear that the principle of stare decisis is applicable in Kenya by virtue of section 3 (1) (c) of the Judicature Act which provides that “the jurisdiction of the Supreme Court, the Court of Appeal, the High Court, the Environment and Land Court, the Employment and Labour Relations Court and of all subordinate courts shall be exercised in conformity with…the substance of the common law, the doctrines of equity and the statutes of general application in force in England on the 12th August, 1897, and the procedure and practice observed in courts of justice in England at that date.” Clearly, these principles, which include the principle of stare decisis, apply only to the courts mentioned in section 3 of the Judicature Act and the tribunals are not such courts within the meaning of section 3 of the Judicature Act. This decision will allow tribunals sufficient flexibility to determine matters case by case and are only bound by the decisions of superior courts.

The decision is available on http://kenyalaw.org/caselaw/cases/view/186995/