M/S Regional Services Ltd vs The Secretary General Tender Board and Others (Misc. Civil Cause No. 67 of 1998) [1999] TZHC 74 (17 December 1999)

.• IN THE HIGH COURT OF TAfl:"Z1\NIA DJ\R ES SAL:/\M MI.IN REGISTRY . hT DAR ES SJ\U1 ,\M -~-------- .... ~ ........... ~-··------'-.. ·. MISC. CIVIL C,\USE NO. ·67 OF 1998 M/S. REGIONAL SERVICES LTD •••••••••••••• APPLICANTS Vereus •

1. THE SECRETARY CENTR,\L TENDER BOhRD
2. THE DIRECTOR OF IMMIGRATION 3< PRINCIPAL SECRET/,RY MINISTRY OF HOME j
3. THE ATTORNEY GENERAL RULING .. ~ 0 'F~~u·1s~·-···RESPONDENTS
4. .H :> 0 ~ · This is an application for prerogative Orders .. The circumstances which:attend the applicdion are·set out in the affidavit made by ShE.trif Mohrnned Mubago who describes himPelf as the local representative of the ApJ?iicontv In substance, his depoPitions are as follows:- / In 1995 the overnment through the Centr&l Tender Bord advertised • I Tender No.26 of 1995/96 for the Design, Frinting and Supply of National Identity Cards. The making of identity cards and issuing them to persons re:=:iding in Tanzania. was the requirement of' the law, namely the Registrtion and Identification of I:ersons Act, 1986.. The Applier.mt submitted its bid and •·•as awarded the tender in June, 1997. By a letter dnted June 20, • 1997 1.nnexture i;RSL, 11 The th:ird Resr,ondent notified the Applicrmt of the decif'ion of the Central Tender Board and intimated th.c, Goverrnnent 9 s intention to enter into contract 1_.,ith th,~ Applicr:mt i:,vbj,ct to successful negotiationso Pursuant to the f:aid lett0r., the Apnliconts mobilized and put in . . . . place all the necessary documentation, syRtems and ?th2r reouirements a8 specified by the ·third Reeponent, in ro,<"idiness . .for negotiD.tions, and then carrid. on the negotiations -,,ith the Governmrnt~ In January, 1998 a Draft Agreement was initialled and the Second )ie8pondent ••.•a.s the person who did so on behalf of the Governent. But the ageement never came to be executed~ To the Ap~licant, 8 surprise, and without i,1arning or notice of an7 kind, the Applicant .. . .. received a letter on June 16, 1998 by which the second Respondent informed it that· the Government ·had decided to t• rminate the negotiationso It is the ~pplicant 1 s all0gntion ·that the letter did not r,ive reasons ., , . . . , . ' .. • 0 0 .:- • o/2.:

• 2 - for such decisiono Next, there was a statement made by the Deputy Minister for Home Affairs in Parliament on June 23, 1998 "·•hen answering u question on behalf of his Minister, which reads as follows:- ilAfter floding the tender, a total of 27 tenderers sub- mitted their bids, out of which 11 bidders prequalified, and fine.lly one going by the name of RSL of West Indies was appointed to do the· jobe However, the Governrrw-nt wa:-3 not satisfied "'dth the prote'dure used to appoint the awarded contractor and the Governmi:>nt ,·as left with no alternative but to direct my Ministry to re-float the tender in a more transparent manner and to get another contractor .. In compliane with the Government directive, my Ministry has set new procedures for calling anotbcr tender for the project. As soon as anoth,·r contractor with sufficient qualifications is appointed and all other procedural matters being complted, the work will commence immediately.H 1ut in reply to the Applicat' s reqUf<St for the reasons for the cancellation o? the award, the second Respondent wrote a lett::-r on July 3, 1998 Annexture 1 1RSL6, 11 giving completely different re3sons from tho.c,e stated by the Deputy Minister. The letter is in the following terms:- 11As pointed out in our earlir:)r letter Ref. Noo657/Vol. l/16 r 16tb, Jur'ce, 1998, · the ,Gdv•~rnm0nt · could not continue \dth the finalisation of the award process as it became more than· obvious that the new ;project package had greatly varied from the original package that hod bee:an used to give the provisional gree_n light to negotinte with Rs1. For example:- (i) The price of the ID for aliens had risen from$ 100 to$ 1,2000 The second bidder h 0 d it at$ 500, hence the need to get hi.rn also to improve the respective offer. (ii) The overall cor·tF had e:;,calated from $ 64m. as tendered in 1995 to $127 nr. It was not easy ju2t to ignore this bigger jump even if we had the justifications. Other bidders would ha.ve taken. this as an isr:-ue for an objection. 11 This ·decision is said to have been taken by the Cabinet. I,n _November, 1998 the first Respondent floated Tender No.22 of 1998/ 99, vide Annexture 11 RSL7 11 , and it is stated that the 1:aid re-floated Tender is manifestly designed to exclude the Applicant from bidding for it. Upon several grounds, the cancellation of the original Tender and propriety of

• 3 - the re-floated Tender a.re impugned in thi,s application~ An Order Certioreri is sought to quash the letter of the secon·d ReF;pondent dated Jly ·3,-1998 .as well as the re-floated Tender., ftn ,order of Prohibition is sought to prohibit the-first, second and third Respondents from interfering with the award process of the original Tender or a,.,ardirig the r-:ame to .any other person oth r than in accordance: vith the terms and conditions of th-:it Tender. And an order of Mand,'3.mus i.s sought to direct the third Bespondent to finalise the awa;rd process of the original Tender or, al- ternatively, terminate the award procesP in accordance with the lawq The Respondents have raised a point of law, which is essentially a preliminary objection, thnt the subject-matter of this application is not amenable to judicial review. It is contended on their behalf that the rel-:itionship behreen the parties was contractual, because the tender process would eventually have given rise to a procurement contract. It is accordingly submitted thot the Applicant should have sued on the contract. In replylt counsel for the Applicant points out th:it when Mrs. Macha appeared for the Attorney GenerDl on February.2._ 1999 she 'tlid not oppose the app],ication fo• leave to apply for the ,Prerogative reliefs. It is .his contention that it is now too late to raise the point .. In the alternative, the Applicant meets the preliminary point by first :Pointing out that the Rerpondents are wavering between two opinions. They stort with the contention tkit there exif'ted a contractual rels.tionship between the parties, but later in argument they urge the point that the I., parties were still negotiating, and that what the Governmc-mt did was to terminate the negotiations. In regard to the latee argumnt roference is made to the decision of the Court of Appeal of England in the case of .f2_u,Ftney _ .. Fir_bairn Lt__'! Vs. Jq_l.;'?i~~<?.i11!!..rs •. (Ho_ta,;.td -- i}_notheF ~ !J.97rj/1 WLR 297, where it was held th.::it the la.w does not recognize a contract to negotiate. Secondly, it is submitted that since the Respondents were discharging a statutory duty, g,S the mnking of identity cards and issuing them to persons residing in Tanzania Wij,S the requirement of the statute, the exercise of that power is subject to judicial review. Several authorities havr-- been cited in support of the.t proposition, including the decision of our Court of Appeal in the ca:se of Iausa 1Ufan ,Salum and Others V ... ---.-... ....... -"'·• --a....:...--•----.-.--'1'-'....,:,... ---- M inE..t er for_ ],an§~ !L<2}.1BiEe --d.Y£P~~n- velo.J!!!er .. Lan<:I.9.J .. h_fl99y' TLR 293, where the court sub.scribed to the view thnt:- 11 1'i.ny action of a public fficial done in official capacity is challengeable on the ground of illegnlity, irrationality 0 •• /3

• 4 - and procedural improprietyii, byway of an application for judicial review; and a pas,-age in Lewis, C's book, ".'!ydicial_B~!.'.1;.'!...,(£-._iJ}_J-}l.E}-J_c Ie,1(! (1992) Sweet & Maxvell, London, at p.31, namely, that:•· HBodies performing public duties or exercising powers tht could be characterized as public may be. subject to judicial review, even though the powers are not statutory or prerogative. Given the Fide or di,sparate range of bodieF that operate in the administrative landscape, and given a revitalized approach on the part of the courts to judicial review and the need to control potential abuses of power, a large numb, ➔ r of non-statutory bodies might well be brought within the ambit of public law and judicial review 1 '. It is also submitted, in the further alternative, that even if the matter . isLtg held to be more contractual, legal redress can still br; sought in public law, since there is an element of public law involved. The decision of !his Court in Mobrama Gold 9or.12oration Ltd. Vs. Attorn~ General & Another, Misc • .------'-·•;;.-,,,;.~ •-.::.«.:: .. ..-.. . • ...... , •.. ,...,. -·-··- ......... ~,..., _____ < _____ , • .,.....:.,,:,:. --...·---"' .. -----......--- ....... ---·--- _, • Civil· Cause No.42 of 1995, is reliPd upon. It may apnear to be an uncommon practice that a respondent should raise such point at this sta.ge. But it ii;:, permis ible. In principle, the Court can go into the quertion wh."thr,r an applicant shonld pursue r0m8dy in private law at the hearing of 'the substantive cau0e. It make,c:: good sen.ce, bec;,,use, as a rule, the application for leave to apply i.s baically an ex-P9-rte one and in the majority of cases the rincipal rePuondcnts have no opportunity of being heard as regard the question whether the subject-matt8r of the cause is amenable to judicial review or whether the:r(: exists a prima facie case. And it has to be stressed th::it on February 2 1999 MrP. Macha ,gppeared for the Attorney General only, and that the joinder of the Attorney General is vir- tually proforma. I entirely agree that there existed no vnlid and enforceable contract between the p,_9-rties. _The negotiotions had not been finally concluded 1 -•hen the Government dcided to re-floct the tendero I cannot but also agree that in flo,::cting and aw2-rding the tender, ancl in terminating the subsequent nego:tiatiops, the first, second and third Respondents were performing public dutieso As thei.r Lordships stated in the Lawa f:1_fan, almm Cs, which decision is binding on this court, any action of a public official done in official capr=ici ty is impugnable by way of judicial review proceeding on the grounds of illegality, irrationa.lity.and procedural impropriety. I must hold, therefore, that the application is entetainable. The allegation thAt the second Re,pondent I s lotter which notified the Aprlicant of the termination of the nr·gotiAtion,c:, did not give the reasons for the decision is denied by the Respondents, and rightly so. In paragraph 2 • o •·• c e/5 ..

i. " \ of thr,t letter it fo st8ted thus: - "The decision has b8"'rt prompted by the current change of terms of reference from the original one ac then submitted in the year 1995. For inst&nce the altera.tion of the well noted reduced populc1tion statieticol data, hage subsequently necessitated the escalation of prices per identity card on aliens.n Quite clearly, a reason was given, and it is a different matter whether that reason was well based. Also controverted i2 the, Applicant's fWf)rment tht the second Respondent had no authority to act for the Ministry of Home Affairs or the Government in re,spect of the terminntion of the negoti'.'.ltions. In a counter-affidavit made by Mro Philo Nombo, on behalf of th0 Respondents, it is deposed in pa.rr.i.graph 10, that the 13r-,cond Re,c:;pondent was directed by the third Respondent to notify the Applicant of the said terminr,tion. I h'.:tve believed Nombo's word. It i,, idle to deny thet the rearo;ons stated by the Deputy Minister in Parliament for the tnrrnin':'tion of the negotiations are in conflict ,,.rith those- given by the second Re2pondent in his lettPr of July 3, 1998. This is admitted in Mr. Nombo 1 s countPr-affidavit, and it is pPrtinent nnd meAning- ful th"'t the Rer=:pondents have nothing to t-oy in e::,plnntion of that dispa.rityo In the circumstances, I should o.gree vith counr:el for the Applicant that thot disparity brings the bona fideP, candour and veracity of the Government into question. The Applic.:mt describes the Centrcl Tender Boord c1r- a Government bod;,t through which the procurement of goods end services by the Government is .. mnde. The Applic'.:'.nt then puts forwnrd the propositions thr.1t the Board is an independent executive agency; thnt the Cabinet has no authority to review its decisions; and that if there was any serious irregularity in the tender process then it was only the Boo.rd which could terminate the process: With due respect, this argument is hardly tenableo There is simply no mnterial bGfor,, thfr, court which demon.stretes th,'7t the Board enjoys such unfel.ttwred powers. I ,qm, therefore, un3ble to sustain the argument thnt the Co.binet h,'.:'s no power to review the df_;cisions nnd acts of the Board an(\ if need be, to terminate tender procesc-es. There are other imputr,,.tions of illerr,Dlity, ,strewn over the pler;dings and submfodons of the Applicant 9 with reference to the actP and decisions of the R_esT)ondents. The probler;i, however, is th,.,t they are presented in · gener<:l terms and I have to confep-=- thnt I h-:1ve failr:d to apprehend the e§rfiHlM of th8 ;iTLf.!~aHH@§ alleged. But as aforenl'-ntion, 0 d, there ate other g:roundP which are being canvasr:,ed by the A p1'llicant, and it seems to me thr,t they are not effectively resistedo .•••• /6

• 6 - The first is failure on the part of the Respondents to give the Applicant the op,ortunity of making its representai5ionso As we hve seen, there ere two versions as to why the aw"rd process was terminated. The first version is· contnin'.cd in the stntement of the Deputy Minister for Home Affairs; and the s,:·cond is contnined in the letter writte.n by the second Respondent ten days latero The reasons given by the Deputy Minister for the cancellation of the process ,'lre pre-award, while those given by the second Respondent are pod-award. In rebtion to the subject at hand I cc·nsider th':lt the first ver8ion is more authoritative. The main points of the Deputy Minister's speech were the allegotion th:1t the proc'"dure uRed to- appoint the Applier.mt .,o_s shrouded in somcj intr2nsparency; and the deci2i9n of the Government to get another contractor to do the job. Beyond 9:uestion 9 there i2 an irn:;inu:"Jtion in thot ,'°'peeoh thnt the Ar, licant hPd a hand in the creation of the nlJeged flaw. It is common gr_ound th"t th8 Ap:plicnnt wns not afforded a heo.ring before the Gwernment took thnt c!r:istic step. It is submitted on behalf of the 1\pplicnnt, th'.:lt an administrative dr:;ciPion of a public official, which is bound or likely to adversely affect.the interests of individuals, hns to be taken after giving such individuo.ls a reasonable opportunity of being heard, and the d2cisions in Ridge Vs Baldwin /_196Y 2 All ER 66, d Ndagwa VS Nairobi Liquor Licencing Autho:.?:_t,Y' (_f.95jJ EA --------····- ___;;;;...r::: --- 709, · are cited in support- The Respondent say nothing in reply to this submission, and in my opinion,it is a submission I muPt sustainw There cnn be no doubt that the decision to tern}inate the award process w-':ls bound to adversely affect the interests of the Applicant. There w:::is 11120 the s•''rious allegation that the Applicant wc1s privy to and pe\rtly respomdble for the alJeged flawed procedure used to award the tender. In my judgment, there w,'.'lS a clear denial of i:mtural justi?e o \ The second ground put fori-•ard is legitim:c,te expectation", Basically, the Grguent of the Applicant is of the following nnture: the Respondents h<J.d re-affirmed thnt the Applicant wns the winner and would enter negoti- ations for termr" of contrn.ct vrith the Governmento The n°,gotiations had been carried out and a final dr::i.ft agreement hnd been initial10d .. The Ap-nlicnt h:i.d prepared n fe'-"dbility study, eng,'.1rted exnerts to prep'.1re technic'.1.l ,':ltuf finnncfol propoeals, ond alJ the great exnenses involve-cl. were incurred in complfo.nce vith condition2 precedent stipulated by the Re2pondents. Reference is m:v 1 e to th0 text under porn.grrmh 81 of Halsbuz:x Ia'i'. .. 2E En~~and,, 4th edition" tlrt in r· 0 :ldion to judicial reviewi it ·counts if n perron ht<s legitim::ite expecto.tions of being treated in a

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• 7 - certain way by o.n administrative authority, even thoug:;1 he has no legal right in private law to receive such treotmento Again, the Respondents sny nothing in reply, o,:1d I think it is a fair inference thnt they nre conceding the point. In truth it must be said that the Applicant was given a very severe treatment~ I agree with the Applicnnt that the dec;i.sion to termin"te tle award process was not only shocking and distreFsing but also went ontrory to the Applicant's legitimate expectctionso " The third ground is bfo.so Thi,s cour~ if' invited to deduce, from what the Deputy Minii=:ter ,stated in Pnrlj Jlent, th-'.:lt.,the Cnbinet had adjudged thP Applicrmt unfit for the jr; nnd th--t even if the Applicont were to bid for the reflooted Tender the Board, h,.,ving been blamed for all.gedl;1 m,'.:'king a mese of the first t ,der process, wc_s bound to be heavily bifsed against it., The RcPpondentrfo not deny th'.'t they were obliged to net fnirly, reaeonably nnd proper in regard to the re-floated Tend·er 0 \ . f But they maintnin th'.ct the re--fl .::ing O the tender ,-,ns devoid of bias. I must go with the kpplic · 0 The relevnnt ,,•ords in the i=-peech of the Deputy Minister are "(a) r!•~ Government wa8 left with no alternative . . but to direct my Ministry ••• ;o get anothf,r contractor; and (b) As,soon as another conttor. 00 is appointed.oo the work ,,,ill commence. o o 11 The lo.ngu.tf J.,S explicit" The makers of the decision to termin'cte the award procr clearly meant to exclude the J.pplicant from the re-floated Tender. fa th us impossible to avoid the conclusion thnt Tender No.22 of J ·./99 was designed to keep out the Applicant In the final ey - ' a nd fo:r all thE.· reaBons I hove given, the · appliction iG grD,' · id th co st s. Th~ second Respondent's letter of June 16, 1998 is .:;,hed. The so.me with Tender No.22 of 1998/99. The third Rei':'po' c is directed to finoli.sf-). the award procesR of the original tendv to tGrmin~:t<c it in accordance with the law. Deliver J.Z:t for the Applic,:mt Mr. l" Mr~ :mbe for the Respondent. ,0 r1,..i ./.' r - i /'./ . L?. ·)l C> ,j -; ',r '·f II J I l D. P 0 MhPIQANO \v JUOOE -· 17/12/199 ! ,c>) /(A ,\ '-' ~ '--{,I