Kenya Ports Authority (KPA) is recruiting 20 law firms with sound financial muscle, insurance cover and experience to handle its multi-billion legal suits.
However, the conditions set to pre-qualify the entities to offer legal services have sparked a bitter court dispute between small law firms and established ones.
The smaller firms term the conditions in the bids as punitive and favour the bigger firms.
KPA’s advocate John Turasha Kinyanjui, however, said the magnitude of legal services KPA outsources from prequalified lawyers often run into billions of shillings, hence requiring experienced firms.
Mr Kinyanjui cited an incident in which KPA was involved in a $5.8 million (Sh580 million) dispute emanating from damage to undersea cables caused by a ship contracted to undertake dredging works and whose arbitration seat was in London.
“Therefore KPA’ requirement for minimum insurance cover (professional indemnity), arbitration certification and demonstrable expertise as required in the tender are justified, fair and prudent,” said Kinyanjui.
On June 9, 2020, KPA invited sealed bids from interested, eligible and qualified lawyers and their law firms to provide legal services to the port
KPA intended to prequalify 20 law firms grouped into category A, B, C and D with each category required to have a minimum professional indemnity cover of Sh200 million, Sh100 million, Sh50 million and Sh20 million respectively.
Kinyanjui said due to the unique and complex nature of legal work emanating from KPA operations and undertakings, the law firms prequalified should have a specific minimum threshold of professional indemnity cover, a minimum number of advocates, and years of experience in the law firms and demonstrate expertise and competence.
Kinyanjui said the disputes include salvage proceedings that can only be arbitrated at the Llyod’s Maritime Arbitration Association Centre based on the fact that parties are usually bound by the Standard Salvage Agreement.
Kinyanjui was replying to a petition filed by lawyer Willis Oluga who sought to stop the tendering process, terming it as discriminative, illegal and unconstitutional. Mr Oluga in his application said the pre-qualification requirement was deliberately imposed by KPA to favour some firms.
Kinyanjui applied to have the matter transferred to Nairobi because a similar petition had been filed by the Law Society of Kenya LSK on behalf of its members which Oluga is part of.
He said LSK had sued KPA and Public Procurement Regulatory Authority.
Kinyanjui said that the Court in Nairobi had declined to temporarily stop the tendering process.
Following Oluga’s petition, Justice Eric Ogola on July 3, 2020, issued conservatory orders temporarily stopping the tendering process by KPA pending hearing and determination of the petition.
Kinyanjui said the constitution empowers Public Procurement Administrative Review Board to hear and determine to tender and asset disposal disputes which he says Oluga has failed to utilise before moving to court.
Kinyanjui said KPA had advertised for provision of legal service on June 4, 2019, which attracted 58 law firms. The tender was however cancelled before evaluation.