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REPUBLIC OF KENYA
IN THE COURT OF APPEAL OF KENYA AT NAIROBI
CIVIL APPLICATION NO. 15 OF 2015 (UR 15/2015)
BETWEENOKIYA OMTATAH OKOITI 1ST APPLICANTWYCLIFE GISEBE NYAKINA 2ND APPLICANT
THE ATTORNEY GENERAL 1ST RESPONDENTKENYA RAILWAYS CORPORA TION 2ND RESPONDENTTHE PUBLIC PROCUREMENT OVERSIGHT AUTHORITy ,3RD RESPONDENTCHINA ROAD AND BRIDGE CORPORATION 4TH RESPONDENTLAW SOCIETY OF KENYA 5TH RESPONDENT
PUBLIC ANNOUNCEMENT AS DIRECTED BY THE COURTOF APPEAL OF THE REPUBLIC OF KENYA
1. The Government of the Republic of Kenya and the citizens of Kenya;
2. The Government of the Peoples Republic of China and the citizens of China;
3. The Government of the Republic of Uganda and the citizens of Uganda;
4. The Government of the Republic of Rwanda and the citizens of Rwanda;
5. The Government of the Republic of Burundi and the citizens of Burundi;
6. The Government of the Republic of Tanzania and the citizens of Tanzania;
7. The Government of the Republic of South Sudan and the citizens of South Sudan;
8. The Government of the Democratic Republic of the Congo and the Citizens of DRC;
9. The Export Import (EXIM) Bank of China; and
10. All members of the public, contractors, sub-contractors, consultants, employees, and
all parties with an interest in the Nairobi-Mombasa Standard Gauge Railway
In compliance with Rule 7i of the Court of Appeal Rules, and Pursuant to the orders of the
Court of Appeal of the Republic of Kenya (Coram: Vishram, Mwera, Sichale JJ. A), issued in
Nairobi on Monday, the 6th day of July, 2015, when the above matter came up for hearing,
that to avoid a situation in which the Court issues adverse orders without the knowledge of
unknown parties likely to be affected, we, the applicants herein do hereby comply fully by
putting out this public announcement.
On 23rd January 2015, under Rule 5(2)(b) of the Court's Rules, we filed a Notice of Motion~
application, dated 5th January, 2015, seeking orders stopping the on-going construction of
the Standard Gauge Railway from Mombasa to Nairobi, pending hearing and determination
liPageof7PUBLIC ANNOUNCEMENT AS DIRECTED BY THE COURT OF APPEAL OF THE REPUBLIC OF KENYA
of our Civil Appeal No. 13 of 2015. We did so to protect our Civil Appeal No. 13 of 2015 from
being overtaken by events and rendered nugatory in the event it succeeds,
1. THAT the procurement of the Mombasa-Nairobi Standard Gauge Railway
(hereinafter, lithe SGR") is a nullity in law because it was done in gross and
blatant violation of the Constitution of Kenya 2010, the Public Procurement and
Disposal Act 2005, The Public Finance Management Act 2012, and other laws of
Kenya. (See our submissions in the Superior Court, annexed at pages 1225 to
1238, of Volume Three of the Notice of Motionii.)
2. THAT the two contracts for the SGR are a fraud on the public, constituting the
theft of some US$ 287,272,630.99, equivalent to Kshs 28,596,804,476.98(at
current exchange rate of 1 USD = 99.5459 Kshs). Further and in particular:
a. Double/Ghost Procurements resulting in the theft of US$111,320,988.43 or
Kshs 11,081,544,835.46:
i. In the Contract for Civil Works, at Item 3 on Page 704 (of Volume Two
of the Notice of Motion), the design and construction supervision
services are awarded in the Contract at the highly inflated and huge
cost of 3.5% of the total value of Bills in the Contract, and which
equates to a sum of Kshs. 7,061,417,879.21 equivalent then to US$
84,939,782.80 (at the exchange rate of Kshs 83.1344 applicable as
stated in the Contract at page 679 of the Volume.
ii. In the Contract for the Installation of Facilities, Locomotives and
Rolling Stock, at page 558 (of Volume Two of the Notice of Motion),
the design and construction supervision services are awarded at the
highly inflated and huge cost of 2.5% of the total value of Bills in the
said Contract at US$ 26,381,205.63.
Hi. Now, on 15th May, 2014, the 2nd Respondent competitively awarded
the International Tender No. KRC/PLM/009/13-14, to Messrs
TSDI/APEC/EDON to provide the same design and construction
supervision services in (i. & ii. above) at US$ 41,184,638.00. See Page
1312 of Volume Three.
iv. Benefits of competition over single sourcing are clear here. The hugeA
price difference, of some US$70,136,352.43 (i.e., US$111,320,988.43~
US$ 41,184,638.00) shows the significa'nce of procuring through
competitive bidding, and underscores the Applicants' contention that
huge savings could have accrued to the taxpayers if the SGR project
was subjected to competitive procurement.
b. Price Inflation by US$ 175,951,642.56 (equivalent currently to Kshs
17,515,259,641.52: Contrary to the formula given for variation in binding
contract prices at pages 551, 660, and 695 (of Volume Two of the Notice of
Motion), there are irregular price variations inflating the prices of the
Contracts thus:
i. In the Contract for the Installation of Facilities, Locomotives and
Rolling Stock, at page 558 of Volume Two, the price is inflated by 5%
by way of price adjustment for a value of US$ 54,609,095.66 and this
is not qualified and is without justification.
ii. In the Contract for Civil Works, at page 704 of Volume Two, the price
is inflated by 5% by way of price adjustment for a value of Kshs
10,087,739,827.45 (equivalent then to US$ 121, 342,546.90) and this
is not qualified and is without justification.
iii. Refer also to the reference in Paragraph F) on Page 723 to the fact
that the Kenya Railways experts protested that the unit prices of
some items were too high, resulting in a price reduction of the prices
by Kshs 2,641,283,124.69 as provided at Page 726.
i. Although Kenyans have been led to believe that the Government is
procuring a Standard Gauge Railway, the said commercial contracts
show that the Mombasa-Nairobi line will be built to the undefined
'Chinese Railway Design Standard. See pages 718, 727 - 729;
"Technical Standards" on Page 550; and Item 5 on Page 215 of
Volume 1.
ii. The government has always maintained that no competitive tender
was floated for the Mombasa-Nairobi phase of the SGR because it was
a "government-to-government" arrangement, yet the financial
contracts are between the GoK and "Financial Institutions of China,"
See Item "14. Contract Price and Payment," on Page 737 of Volume
Two.
i.ii. Concealment of the fact that the Kenya Railways Corporation experts
dismissed and rejected the project's Feasibility Study Report, dated
January 2011. See pages 2060 - 2070 of Volume 4. On 14th March,
2013, KR even withdrew the award. See Page 2476 of Volume 5.
iv. There is no evidence in the budgets of Uganda and Rwanda that the
said regional governments/countries are part of the SGR project. For
example, Uganda's National Budget for the year 2015/2016 has no
provisions for the project. Refer to the section titled, Railway
Transport, at Paragraph 85 on pages 32 and 33 of the document titled
1st and 2nd Applicants' List of Documents.
i. Refer to the protest letters from the Kenya Forest Service, Museums
of Kenya, and the Kenya Wildlife Service, respectively, pages 1302,
1303, and 1304.
ii. Procurement of the obsolete polluting diesel engines and not the
modern environmentally friendly electric ones.
5. The lack of due diligence in the rushed conclusion of contracts as captured in
paragraphs 18, 21, 22, 42 and 43 of the 2nd Respondent's Replying Affidavit,
dated 20th February, 2014, (See pages 1572 and 1575 of Volume Four of the
Notice of Motion) points to total lack of due diligence. It is inconceivable that in
less than 15 days, from 26th June 2012 (when the 2nd Respondent approved the
feasibility study) to 11th July 2012 (when a commercial contract for civil works
was signed), the following supposedly happened:
i. The negotiating team was formed;
ii. Negotiates the commercial contract;
iii. The commercial agreement is endorsed by the management of both
the 2nd and the 4th Respondents;
iv. The 2nd Respondent seeks and gets approval from Ministry of
Transport and from the Hon. Attorney General;
v. The Board of the Kenya Railways Corporation is convened with the
award of the contract as an agenda;
vi. The Board meeting is held which approves the contract;
vii. The 4th Respondent is notified of the award and accepts the award;
and
viii. The contract is signed!
6. THAT being governed by the laws of Kenya (see Vol. Two: "Law and Language" on
pages 548 and 687, and the "Disclosure Clause" under "Compliance with Laws,"
on page 688 of the Notice of Motion, the two SGR contracts between the 2nd and
the 4th Respondents are a nullity in law because they are a result of an
unreasonable, irregular, illegal, corrupt and, therefore, an unconstitutional
process which is a nullity ab initio in Kenyan law? They are also a nullity under
the arbitration mechanisms agreed in the Contracts. In the case of World Duty
Free Company Limited vs. The Republic of Kenya, the International Centre for
Settlement of Investment Disputes dismissed the claim advanced by World Duty
Free Limited because it was tainted with bribery (corruption). See authority in
the Applicant's Supplementary List of Authorities/Documents.
• See Paragraph 138 on Page 41. The concept of public policy ("ordre public")is rooted in most, if not all, legal systems. Violation of the enforcing State'spublic policy is grounds for refusing recognition or enforcement of foreignjudgments and awards. The principle is enshrined in Article V.2 of the NewYork Convention of 10 June 1958 and Article 36 of the UNCITRALModel Lawrecommended by the General Assembly of the United Nations on 11December 1985.
7. THAT for being unconstitutional null and void ab initio, the SGR contracts are
voidable by Honourable Court of the Republic of Kenya, and the Court should
void them and stop their implementation, inter alia, for the following reasons:
a. Articles 2(1),(2)(3) & (4) of the Constitution deny the Court any discretion to
act otherwise. In particular, the express wording of Article 2(4) addresses
itself to fait accompli. The end can never justify the means under Kenyan law.
By dint of Articles 24 and 25, only provisions out of the Bill of Rights can be
limited through legislation; all other provisions are absolute. And by dint of
Article 255(a), Article 2 can only be amended via a national referendum.
b. Under international law and the doctrine of odious debts, obligations which
result from the deliberate mischief of the government of the day are regime
obligations and not sovereign obligations.
c. The political arms of Government (i.e. the legislature and the executive) lack
the capacity to do by their treaty making powers that which the Constitution
forbids.
d. In the balance of things, and given Kenya's public policy of zero tolerance to~
corruption, the overwhelming public interest in the matter lies with
upholding the Constitution as the Supreme Law of the land, which is an
51Pageof7
absolute bar to anything done in its contravention. It is our contention that
there will be no injury to the 1st - 4th Respondents in stopping the
construction of the irregularly and illegally procured SGR. Otherwise, any
injury would be self-inflicted by the Respondents since they contemptuously
disregarded the Constitution and Kenya's procurements laws. Further, any
injury to the said Respondents can easily be compensated in damages while
disregarding the Supremacy of the Constitution will unleash anarchy upon
the Republic.
e. To avoid any injustice in the circumstances before us, the principle of
proportionality enjoins the Court to deal with this matter in a way that is
proportionate in the long term, including taking into account the fact the
Court has no capacity to waiver the Supremacy of the Constitution.
8. THAT there is no urgency in the construction of the SGR:
a. Only the tiny Mombasa-Nairobi phase is being constructed of what is being
billed as a regional project.
b. No feasibility studies and financing agreements are in place or are being
undertaken for the Nairobi-Malaba/Kisumu phase.
c. Constructing only the Mombasa-Nairobi phase will only facilitate the
transportation of goods between the two towns not the region.
d. If the Mombasa-Nairobi phase will take so long, when will the railway cross
the difficult terrain of the Rift Valley to reach Malaba/Kisumu, let alone
reaching Kampala and Kigali?
e. Read Paragraph 85 pages 32/33 of Uganda's 2015-2016 budget speech.
a. To determine that the State and its organs, like the 2nd Respondent, are
persons who enjoy the rights and fundamental freedoms in the Bill of Rights,
and that they can hold those rights up as an absolute bar against demands by
citizens that they be transparent and accountable?
b. To determine that the Court was not a legitimate authority for purposes of
fighting corruption, and that it could NOT entertain whistle blowers.
c. To apply the Evidence Act to constitutional proceedings brought under
Articles 22 and 258 and the Mutunga Rules.
e. To strike out the documentary evidence supporting the petitions by the
Applicants and the 5th Respondent. Further and in particular, there was
absolutely no reason, other than express mischief and improper motive on
the part of the Superior Court, to strike out the documents as it does on page
111 of Volume One.
10. THAT the Superior Court was biased and aided and/or abetted corruption in the
procurement of the SGR.
OKIYA OMTATAH OK1ST APELLANT
(1) An intended appellant shall, before or within seven days after lodging notice of appeal, servecopies thereof on all persons directly affected by the appeal: Provided that the Court may onapplication, which may be made ex parte ,within seven days after lodging the notice of appeal,direct that service need not be effected on any person who took no part in the proceedings inthe superior court.
(2) Where any person required to be served with a copy of a notice of appeal gave any addressfor service in or in connection with the proceedings in the superior court, and has notsubsequently given any other address for service, the copy of the notice of appeal may beserved on him at that address, notwithstanding that it may be that of an advocate who has notbeen retained for the purpose of an appeal.
The entire 2509-pages long Notice of Motion and other pleadings in the matter may beobtained from the Nairobi Registry of the Court of Appeal of the Republic of Kenya.