Major Win for Contractors as High Court Declares Procurement Deposits Unconstitutional

Why Thousands of Kenyan Businesses Can Now Challenge Tender Decisions More Easily in Court

The High Court has declared provisions requiring contractors and suppliers to pay mandatory deposits before challenging procurement decisions unconstitutional, in a landmark ruling expected to improve access to justice for businesses across Kenya.

In the judgment delivered on April 29, 2026, Justice Bahati Mwamuye ruled that the financial requirements placed before bidders seeking to challenge procurement decisions unfairly locked out many deserving litigants, especially small and medium-sized enterprises (SMEs), youth, women and persons with disabilities.

The decision arose from a petition filed by the Law Society of Kenya (LSK) against the Attorney General and other respondents.

Court Says Justice Cannot Depend on Financial Ability

Justice Mwamuye acknowledged that the government has a legitimate interest in preventing frivolous procurement disputes.

However, he said that the objective cannot be achieved by making access to justice dependent on a person’s financial capacity.

“The strength of a procurement challenge lies in its legal and factual merit, not in the bidder’s bank balance.”

The judge noted that wealthy bidders are equally capable of filing frivolous cases, while financially constrained businesses may have genuine complaints that deserve to be heard.

He added that existing legal safeguards are sufficient to prevent abuse of the procurement dispute resolution system.

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Existing Safeguards Already Protect the System

According to the court, procurement disputes are already regulated through strict statutory timelines, limited standing for applicants, dismissal of unmeritorious claims and awards of costs against unsuccessful parties.

Justice Mwamuye found that these safeguards adequately discourage abuse without imposing financial barriers that prevent genuine litigants from accessing justice.

As a result, the High Court declared Section 167(2), Section 175(2) of the Public Procurement and Asset Disposal Act, together with Regulations 203 and 218, unconstitutional and permanently barred their enforcement.

However, the court upheld Regulation 204, which allows parties appearing before the Public Procurement Administrative Review Board (PPARB) to be represented either by advocates or by representatives of their choice.

The judge also found that the procurement regulations had undergone adequate public participation before they were enacted.

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What the Ruling Means for Contractors and Suppliers

The ruling is expected to have a significant impact on procurement disputes in Kenya.

Contractors, suppliers and businesses with legitimate complaints against procurement decisions will no longer be required to raise substantial sums of money before filing appeals before the Public Procurement Administrative Review Board or the High Court.

The judgment is also expected to encourage greater participation by SMEs, youth-owned, women-owned and disability-owned businesses in public procurement by ensuring that financial limitations do not prevent them from seeking legal redress.

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