𝐒𝐮𝐩𝐫𝐞𝐦𝐞 𝐂𝐨𝐮𝐫𝐭 𝐜𝐥𝐨𝐬𝐞𝐬 𝐭𝐡𝐞 𝐥𝐨𝐨𝐩𝐡𝐨𝐥𝐞 𝐨𝐧 “𝐒𝐩𝐞𝐜𝐢𝐚𝐥𝐥𝐲 𝐏𝐞𝐫𝐦𝐢𝐭𝐭𝐞𝐝” 𝐚𝐰𝐚𝐫𝐝𝐬 𝐢𝐧 𝐏𝐫𝐨𝐜𝐮𝐫𝐞𝐦𝐞𝐧𝐭 𝐋𝐚𝐰𝐬
Governments across the world frequently appeal to national security, emergencies, or “special circumstances” when seeking to bypass established procedural laws, particularly those that govern public procurement. These invocations, while occasionally justified, are often exploited as a veil of opacity, enabling procurement decisions to occur beyond the reach of public scrutiny or institutional oversight.
Kenya is no exception to this trend. This culture of opacity has recently come under judicial scrutiny in Supreme Court Petition No. E011 of 2024, Omtatah v. Portside Freight Terminals Ltd & 12 Others. At the center of this case was the use of the Specially Permitted Procurement Procedure (SPPP)—a procurement method shrouded in discretion and introduced under Section 114A of the Public Procurement and Asset Disposal Act (PPAD Act) introduced through the Finance Act No. 15 of 2017.
The Specially Permitted Procurement Procedure was ostensibly designed for exceptional cases, where innovation, time sensitivity, or strategic interest might make traditional procurement untenable. However, in practice, the method has become a legal gray zone: one that enables public entities to circumvent competitive tendering with minimal justification and little public oversight.
The petition challenged the legality and constitutionality of the procurement process by which Portside Freight Terminals Ltd was awarded a license and wayleave for the construction of a second bulk grain handling facility and an island berth at the Port of Mombasa.
The project originated from an unsolicited proposal submitted by Portside Freight Terminals to the Kenya Ports Authority (KPA), which then granted approval using the SPPP method—arguably without adhering to principles of open competition or transparency. The petitioner argued that this process flouted key constitutional provisions—Articles 10 (national values and principles), 201 (principles of public finance), and 227 (procurement of public goods and services)—as well as the broader provisions of the PPAD Act.
The Supreme Court of Kenya issued a landmark judgment that definitively establishes the legal parameters surrounding the Specially Permitted Procurement Procedure (SPPP) under the Public Procurement and Asset Disposal Act (PPAD Act)—effectively eliminating its misuse as a vehicle for bypassing mandatory competitive tendering.
𝐖𝐡𝐲 𝐃𝐨𝐞𝐬 𝐓𝐡𝐢𝐬 𝐌𝐚𝐭𝐭𝐞𝐫?
Because this precedent decisively curbs the manipulation of “special procedures” as clandestine mechanisms to grant exclusive government contracts, thereby restoring the primacy of constitutional principles—integrity, equity, and transparency, in public procurement.
𝐈𝐬𝐬𝐮𝐞𝐬
The Supreme Court meticulously evaluated whether KPA:-
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Substantiated the existence of “exceptional circumstances” warranting the use of the SPPP;
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Fulfilled the mandatory pre-qualification obligations under Section 93 of the PPAD Act;
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Complied with the overarching constitutional principles under Articles 10(2)(c), 201(a), and 227(1)—namely fairness, equity, transparency, accountability, and competition.
𝐊𝐞𝐲 𝐓𝐚𝐤𝐞𝐚𝐰𝐚𝐲𝐬 𝐟𝐨𝐫 𝐏𝐫𝐨𝐜𝐮𝐫𝐞𝐦𝐞𝐧𝐭 𝐚𝐧𝐝 𝐏𝐮𝐛𝐥𝐢𝐜 𝐅𝐢𝐧𝐚𝐧𝐜𝐞 𝐏𝐫𝐨𝐟𝐞𝐬𝐬𝐢𝐨𝐧𝐚𝐥𝐬
1.All procurement methods, including SPPP, must meet constitutional standards:
Fairness, equity, transparency, competitiveness, and cost-effectiveness are not optional. The Supreme Court expressly condemned the notion of treating the SPPP as a “preference” or an exploitable loophole under Section 93 of the PPAD Act.
2. “Exceptional circumstances” under Section 114A(2)(a) must be demonstrably proven—not merely asserted
KPA’s rationale that an open tender would be “impossible, impracticable, or uneconomical” was unsubstantiated and unpersuasive. The Court reaffirmed that public urgency or administrative convenience cannot override statutory procurement safeguards.
3. Pre-qualification under Section 93 is a binding obligation and mandatory
The Court held that the use of the word “may” must be interpreted in light of Article 227 of the Constitution. Accordingly, failure to conduct expressions of interest and a transparent pre-qualification process renders the procurement process unlawful.
4. Compliance with conditional approvals from the Cabinet Secretary is legally enforceable
If the Cabinet Secretary authorizes an SPPP subject to specific conditions, such as amending tender documentation—such conditions must be strictly complied with before execution can proceed. KPA’s disregard of these terms vitiated the procurement process.
5. Procurement projects must be aligned to the correct legal framework- 𝐌𝐢𝐬𝐜𝐡𝐚𝐫𝐚𝐜𝐭𝐞𝐫𝐢𝐳𝐢𝐧𝐠 𝐩𝐫𝐨𝐜𝐮𝐫𝐞𝐦𝐞𝐧𝐭 𝐦𝐞𝐭𝐡𝐨𝐝𝐬 𝐢𝐧𝐯𝐢𝐭𝐞𝐬 𝐥𝐞𝐠𝐚𝐥 𝐩𝐞𝐫𝐢𝐥
The Court underscored that the grain terminal project was better suited to the Public-Private Partnership (PPP) model due to its scale, structure, and commercial implications. Misclassifying the procurement method exposes procuring entities to statutory non-compliance, financial loss, and reputational damage.
𝐇𝐨𝐰 𝐂𝐌 𝐀𝐝𝐯𝐨𝐜𝐚𝐭𝐞𝐬 𝐋𝐋𝐏 𝐜𝐚𝐧 𝐇𝐞𝐥𝐩
The Public Procurement and PPP Legal Practice Group at CM Advocates LLP is uniquely positioned to provide expert legal support across the entire procurement and infrastructure project lifecycle. Our services span from structuring and negotiating PPPs, advising on regulatory compliance, preparing compliant bids, handling Public Procurement Administrative Review Board (PPARB) litigation, and managing disputes arising from non-compliance or misapplication of the PPAD Act. We assist both public entities and private sector bidders in navigating conditional approvals, aligning project delivery models with the correct legal regime, and mitigating exposure to financial and legal risks. With a track record in complex, high-value projects across East Africa and beyond, our team offers not only legal precision—but strategic foresight.
𝐅𝐢𝐧𝐚𝐥 𝐓𝐡𝐨𝐮𝐠𝐡𝐭: 𝐋𝐞𝐠𝐚𝐥 𝐂𝐨𝐦𝐩𝐥𝐢𝐚𝐧𝐜𝐞 𝐢𝐬 𝐍𝐨𝐭 𝐎𝐩𝐭𝐢𝐨𝐧𝐚𝐥
For both local and international investors seeking to engage in Kenya’s public sector through tenders, direct licensing, or Public-Private Partnerships (PPPs), strict legal and regulatory compliance is critical.
Contracts issued in breach of the Public Procurement and Asset Disposal Act (PPAD Act) or constitutional requirements are vulnerable to cancellation, injunctive orders, refund obligations, and reputational damage. Government agencies and their officers face significant risks—ranging from audit sanctions and litigation to personal liability under the Public Finance Management Act and the Leadership and Integrity Act.
𝐘𝐨𝐮𝐫 𝐋𝐞𝐠𝐚𝐥 𝐀𝐝𝐯𝐢𝐬𝐨𝐫 𝐨𝐟 𝐂𝐡𝐨𝐢𝐜𝐞
CM Advocates LLP offers specialised, strategic, and compliant legal counsel for investors and public sector participants navigating Kenya’s procurement and PPP landscape.
Our team provides end-to-end legal support—including:
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Pre-bid advisory
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Contract documentation review
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Regulatory compliance audits
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Representation before PPARB and courts
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PPP structuring and project due diligence
We help safeguard your investments, promote compliance, and mitigate risk across all phases of public sector engagement.
𝐂𝐨𝐧𝐭𝐚𝐜𝐭 𝐔𝐬:
Let us guide your next government project—compliantly, securely, and confidently.
CM Advocates LLP
I&M Bank House, 7th Floor, 2nd Ngong Avenue, Nairobi, Kenya
law@cmadvocates.com | +254 716 209 673
For direct queries, contact Mr. Wilfred Lusi, Head of Dispute Resolution: wlusi@cmadvocates.com or Cyrus Maina, Managing Partner: cmaina@cmadvocates.com