NAIROBI: A firm associated with Goldenberg mastermind Kamlesh Pattni has been awarded an international fast-food tender at the Jomo Kenyatta International Airport (JKIA) in a tug-of-war marked by legal dog-fights and boardroom intrigues.
According to documents in our possession, KAA awarded Suzan General Trading JLT (Suzan) the tender on January 28 this year.
The authority’s acting Managing Director Yatich Kangugo and Secretary Katherine Kisila signed the contract against legal advice by lawyers and despite the corporation’s appeal pending in court.
At the time of the issuance of the tender, KAA had filed a notice of appeal to challenge an order by the High Court to award the contract to Suzan, a company based in the United Arab Emirates.
Contacted for comment, Ms Kisila said: “This matter is still pending in the Court of Appeal and I don’t want to handle KAA matters through the media. I, therefore, don’t have a comment.”
Efforts to contact the acting MD did not bear fruit; he did not answer or return calls and messages to his cell phone number.
In an attempt to appease Hoggers Ltd, which had been awarded the contract twice before it was cancelled and awarded to Suzan, KAA officials invited the aggrieved party to an out-of-court deal.
The matter, now a subject of investigations by the Ethics an Anti-Corruption Commission (EACC), has sparked controversy within the corporation in a fight for control of the lucrative business.
Besides Hoggers and Suzan, Kuku Foods Kenya and Yog Holdings had submitted bids for the tender, which was advertised in January 2014. Following evaluation by the KAA procurement team, Hoggers emerged the best suitable bidder on both the technical and financial proposals.
But on May 6, 2014, Suzan filed a request for review of the decision at the Public Procurement Administrative and Review Board (PPARB). On June 3, 2014, the board ordered a fresh evaluation of the bids by Hoggers, Suzan and Kuku Foods.
The board, once again, settled on Hoggers.
But Suzan, for the second time, went back to the board on June 19, 2014. This time their application was rejected.
“... the request for review fails and is hereby dismissed,” the board ruled on July 16, 2014.
Dissatisfied, Suzan moved to the High Court and filed a Judicial Review Application No.289 of 2014. The firm argued that it was denied an opportunity to make oral submissions during the board proceedings.
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Justice George Odunga agreed. The judge also nullified the award of the contract to Hoggers and ruled that the matter be heard afresh by PPARB.
On December 18, 2014, the board overturned its earlier decisions, found Hoggers unsuitable for the contract and directed that Suzan be awarded the tender.
“The board in exercise of the powers conferred on it by the provisions of section 98© of the PPOA Act, 2005 awards the tender no KAA/1972013-2014 for the development and management of an international branded fast foods outlet at JKIA to M/S Suzan General Trading JLT,” said the board and directed “the procuring entity to proceed with and complete the said procurement process within a period not exceeding 15 days”.
When The Standard on Saturday reached out to the board chairman Paul Gicheru, he said: “During the second hearing which was ordered by the court, we noticed glaring irregularities that had not come to the attention of the board in the initial hearing.”
Hoggers, aggrieved by the decision, moved to the High Court and filed a request for judicial review (JR No.477 of 2014) on grounds that PPARB’s decision was illegal, unlawful, arbitrary, unreasonable and/or irrational.
Again, the matter was tabled before Justice Odunga, who stuck to his earlier ruling and dismissed the application, technically awarding the contract to Suzan.
Both Hoggers and KAA rejected the High Court decision and proceeded to file separate notices of appeal in the Court of Appeal.
“Take notice that Kenya Airports Authority, the second interested party herein, being dissatisfied with the judgment of G.V. Odunga given at the High Court of Kenya on the 18th day of May 2015, intends to appeal against the whole of the said judgment,” read KAA’s notice.
Hoggers also filed an application at the Court of Appeal seeking a stay of further proceedings on the subject until their appeal was heard and determined. The application was certified as urgent and a hearing date given for October 7, 2015.
During this period, Ogetto, Otachi & Company Advocates, acting for KAA, wrote two separate pieces of legal advice to KAA acting MD and Corporation Secretary.
In their advice to the acting MD on May 21, 2015, the lawyers wrote: “We have carefully studied the judgment and in our opinion it is erroneous, unjustified and incorrect in many material facts...counsel for Hoggers has informed us that his client intends to appeal the above decision and we are in complete agreement...we suggest that KAA hold off on the signing of the contract, otherwise the intended appeal will be rendered merely an academic exercise. We are of the firm view that the matters to be raised in the intended appeal are weighty and important and the Court of Appeal should have the opportunity to rule on those matters without the danger of the appeal being rendered nugatory.”
In a separate advice dated July 3, 2015, Ogetto told KAA’s Kisila: “It is our considered opinion that given the pendency of the appellate proceedings in this matter, it would be prudent to suspend signing of any contract or indeed avoid taking any step with regard to the contract at the moment.”
The hearing of the applications could not proceed on January 28, this year because one of the judges picked to preside over the matter had to attend an official function.
The matter was nonetheless mentioned on the same day at 9am before Justice Kihara Kariuki, the President of the Court of Appeal.
It is during this mention that drama unfolded after Suzan told the court that it had already signed the contract with KAA and as a consequence, the matter had already been overtaken by events.
Suzan’s affidavit filed in court, a copy of which we obtained, had attached the said contract. But the contract document did not bear the signature of KAA. It remains unclear how Suzan obtained the said contract for signing yet KAA, the procuring entity, had not signed it.
Besides, KAA had filed a notice of appeal to challenge the decision to award the contract to Suzan.
Justice Kariuki directed KAA to clarify, by way of an affidavit, the status of the contract within seven days.
“Meanwhile, learned counsel for the second interested party has informed the court that the contract giving rise to these proceedings has already been signed and the application has therefore been overtaken by events. Learned counsel for the applicant is not aware of this development. In the circumstances, the second interested party is directed to file and serve an affidavit in response to the application within the next seven days to bring on material facts to the attention of the court,” ordered the judge.
On February 4, KAA filed an affidavit in the Court of Appeal indicating that the contract was signed on the same day Suzan produced the document in court that did not bear KAA’s seal.
It is this coincidence that Hoggers wants EACC to investigate. “How is it possible that the Court of Appeal would be informed that morning that a contract had already been signed yet the copy subsequently availed is dated the same day parties were in court? Indeed, it is inexplicable how KAA filed a Notice of Appeal to challenge the High Court decision and then even without withdrawing the appeal, proceeded to sign the contract rendering the appeal academic. From the above, it is clear that by KAA signing the contract the same day the Court of Appeal sought to know its status was meant to defeat the pending application for stay and was meant to unfairly aid a party against whom KAA was also appealing,” reads the letter by Hoggers’ advocate Ng’ang’a Mbugua to EACC.
Mbugua has further told EACC that it is inconceivable that “KAA entered into a contract on a matter that was the subject of a pending application in the court and in which they were also appellants”.
Before the news that the contract had been signed, KAA, through their lawyers, had written to Hoggers lawyers Ng’ang’a Mbugua and Company Advocates inviting it for an out-of-court deal.
The letter reads in part: “We refer to the matter and the hearing which is coming up tomorrow. We are in receipt of instructions from our client KAA to have the matter taken out of court’s list to enable the parties to explore amicable resolution of the dispute. Consequently, kindly seek your client’s instructions and let us have their view on the above.”