In a judgment that could widen access to the procurement review system, the court found the requirements violated constitutional guarantees of access to justice, a fair hearing and equality by locking out businesses that could not afford the deposits, regardless of the merits of their cases.

The decision followed a petition by the Law Society of Kenya (LSK), which challenged the legality of the deposit regime introduced under the 2020 regulations.

LSK argued that requiring bidders to deposit 15 percent of the tender sum at the administrative review stage, and three percent at the judicial review stage, in addition to filing fees of up to Sh205,000, commercialised access to justice by making it contingent on financial capacity.

The court held that the financial thresholds imposed an unreasonable burden on businesses seeking to challenge procurement decisions, particularly small and medium-sized enterprises and firms owned by women, youth and persons with disabilities, despite procurement laws reserving a share of public contracts for such groups.

“Viewed objectively, such a requirement constitutes a significant financial threshold that is likely to be beyond the reach of a considerable segment of potential litigants, particularly small and medium enterprises and participants within constitutionally protected categories,” the court said.

The judge noted that procurement contracts often run into hundreds of millions or even billions of shillings, making the deposits prohibitively expensive even though they were refundable if a case succeeded.

During the proceedings, the court heard that a bidder seeking to challenge the award of a Sh1.39 billion tender by the Konza City Technopolis Development Authority would have been required to raise more than Sh209 million before the Review Board could hear the dispute.

The National Treasury defended the regulations, arguing that the deposit requirements discouraged frivolous challenges that delay procurement projects and tie up public resources.

“The regulatory framework, including the impugned deposit provisions, is the product of a deliberate legislative and policy process undertaken within the confines of the law and with due regard to the objectives of public procurement,” the Treasury said.

Together with the Attorney-General, the Treasury argued that the requirements were a legitimate policy choice intended to safeguard public resources and improve the efficiency of procurement processes.

The court accepted that preventing abuse of procurement litigation was a legitimate public objective but found the financial thresholds failed the constitutional test of proportionality.

“A regime that permits a well-resourced litigant to pursue a frivolous claim while excluding a financially constrained litigant with a meritorious claim cannot be said to rationally advance its stated purpose,” the judge said.

The court said existing safeguards already allow the Public Procurement Administrative Review Board to dismiss unmeritorious cases, award costs and enforce strict statutory timelines without imposing blanket financial barriers before disputes can be heard.

The judge also found that the percentage-based deposits indirectly discriminated against economically disadvantaged businesses because access to procurement justice became dependent on financial strength rather than the merits of a complaint.

The court permanently restrained enforcement of the invalidated provisions, meaning procurement disputes can no longer be rejected solely because bidders fail to raise deposits pegged to contract values.

The ruling is expected to reshape procurement litigation by allowing contractors to challenge tender awards without first paying deposits linked to the value of the contracts, unless the judgment is suspended or overturned on appeal.