The Court of Appeal has overturned the disqualification of Sintmond Group Limited from a Kenya Electricity Generating Company (KenGen) tender for the sale of carbon credits, ruling that procuring entities cannot use the due diligence process to introduce evaluation criteria that had previously been declared optional.
In a judgment delivered on July 10, a three-judge bench comprising Justices Ali-Aroni, Joel Ngugi and Paul Lilan allowed Sintmond Group’s appeal, set aside a High Court decision that had upheld its disqualification, and directed the Public Procurement Administrative Review Board to reconsider the dispute before a differently constituted panel.
The dispute arose from Tender No. KGN-SALE-005-2025, through which KenGen sought to procure services for the sale of Certified Emission Reductions (CERs), commonly known as carbon credits.
Sintmond Group had been disqualified during the due diligence stage after KenGen concluded that it had failed to provide sufficient independent client references demonstrating successful execution of comparable contracts.
However, the appellate court found that earlier decisions by both the Review Board and the High Court had already determined that Mandatory Requirement 16 (MR-16) could be satisfied either by client references or documentary evidence of previous CER or Voluntary Emission Reduction transactions.
Justice Joel Ngugi held that KenGen exceeded the scope of lawful due diligence by restoring client references as a mandatory requirement despite previous judicial findings that they were optional.
The court said that while due diligence is an important tool in public procurement, it cannot be used to alter the rules of a tender after bids have been submitted.
“Due diligence is not a license to alter the rules of the procurement after bids have been submitted or to introduce new evaluative benchmarks under the cover of verification,” ruled the court.
The judges held that due diligence is intended to verify the truthfulness and authenticity of information already provided by bidders, rather than introduce fresh evaluation standards or benchmarks.
The court drew a distinction between verification and re-evaluation, stating that verification tests whether representations made by a bidder are accurate, while re-evaluation occurs when a procuring entity applies new standards that were not disclosed in the tender documents.
According to the judges, KenGen crossed that line by relying on new or independent client references as the basis for disqualifying Sintmond Group.
The Court of Appeal further ruled that public procurement must comply with Article 227 of the Constitution, which requires procurement systems to be fair, equitable, transparent, competitive and cost-effective.
The judges also reiterated that judicial review in procurement disputes extends beyond procedural fairness to include scrutiny of the legality, rationality and constitutional compliance of procurement decisions.
On the issue of suspension of procurement proceedings, the court held that only review proceedings before the Public Procurement Administrative Review Board automatically halt procurement processes.
Judicial review proceedings filed before the courts do not suspend procurement unless a court expressly grants interim orders.
The appellate court allowed the appeal, quashed the Review Board’s decision issued on March 23, 2026, set aside the High Court judgment in HCJR No. E101 of 2026, and remitted the matter to a differently constituted panel of the Review Board for fresh determination.
Each party was ordered to bear its own costs.
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