Commentary/Analysis: The Case of Okoiti v Portside Freight Terminals Ltd & 12 Others [2025] KESC 44 (KLR)

Case Overview

The Supreme Court decision in Okoiti v Portside Freight Terminals Ltd marked a landmark pronouncement on constitutional compliance in public procurement, particularly regarding the use of Specially Permitted Procurement Procedures (SPPP) under Section 114A of the Public Procurement and Asset Disposal Act (PPAD Act).

The dispute arose after Kenya Ports Authority (KPA) granted Portside Freight Terminals a licence to establish a second grain bulk handling facility at Mombasa Port via SPPP—allegedly bypassing competitive bidding, in breach of Article 227 of the Constitution.

Key Legal Issues

1. Constitutionality of SPPP under Section 114A PPAD Act.
2. Whether KPA’s deviation from competitive procurement was justified by public interest, national security, or exceptional circumstances.
3. Binding nature of the Port Master Plan (2017–2047) and public participation.
4. Whether the decision-making process was ultra vires, particularly in relation to KPA Board vs Accounting Officer roles.
5. Public interest standing and access to justice under Articles 22 and 258 of the Constitution.

Supreme Court's Reasoning

• SPPP Use Was Unjustified: KPA failed to prove that open tendering was impractical or uneconomical. Exceptional circumstances must be demonstrated with evidence.
• Violation of Article 227: Procurement must always be fair, equitable, transparent, competitive, and cost-effective—constitutional principles, not just procedural steps.
• Master Plan Not Binding, But Normatively Important: Deviation from the Port Master Plan required public participation, especially where public interest and national planning were affected.
• Decision Ultra Vires: The KPA Board acted outside its powers in approving procurement decisions—functions lawfully delegated to the Accounting Officer.
• Public Interest Justiciability Upheld: The Court upheld the right of individuals and groups to bring constitutional claims in public interest procurement matters.

Orders and Outcome

• The procurement process was declared unconstitutional and void.
• The licence and wayleave granted to Portside Freight Terminals were quashed.
• KPA was directed to conduct a fresh procurement process under Article 227.
• Each party to bear its own costs, due to the public interest nature of the petition.

Legal and Academic Significance

1. Reassertion of Constitutional Procurement

Procurement is a constitutional matter, not just administrative. Article 227 is enforceable in courts.

2. Limits to SPPP

SPPP is not a backdoor to non-competitive tenders. Exceptional use must be demonstrably justified.

3. Master Plans as Governance Tools

Deviation from master plans may require fresh public participation. Plans carry strong normative weight.

4. Institutional Role Clarity

Public institutions must respect separation of functions—Boards should not override Accounting Officers.

5. Strengthening Public Interest Litigation

Reinforces that citizens and public interest bodies can challenge unconstitutional actions, even without direct commercial interest.

Critique & Areas for Further Development

• Lack of clear standards on what qualifies as “exceptional” for SPPP.
• No bright line for when master plan deviations require participation.
• Risk to investor confidence in alternative procurement methods.
• Judicial remedies were minimal—no structural or time-bound reforms ordered.

📖 Conclusion

Okoiti v Portside Freight Terminals Ltd is a precedent-setting judgment affirming that constitutional principles apply fully to public procurement. It clarifies the limits of discretion under special procurement procedures and reinforces the role of courts in upholding transparency, accountability, and rule of law in public finance.