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Post Reply: High Court Halts Sh15 Billion Rice Tender Amid Dispute Over Cancelled Bids

<blockquote><div class="quotetitle">Quote from <a class="profile-link highlight-moderator" href="https://lawguide.co.ke/understanding-law/legal-forum/profile/lawyer/">Lawyer</a> on September 26, 2025, 7:20 am</div><div id="pl-8043"  class="panel-layout" ><div id="pg-8043-0"  class="panel-grid panel-no-style" ><div id="pgc-8043-0-0"  class="panel-grid-cell"  data-weight="1" ><div id="panel-8043-0-0-0" class="so-panel widget widget_sow-editor panel-first-child panel-last-child" data-index="0" data-style="{&quot;background_image_attachment&quot;:false,&quot;background_display&quot;:&quot;tile&quot;,&quot;background_image_size&quot;:&quot;full&quot;,&quot;background_image_opacity&quot;:&quot;100&quot;,&quot;border_thickness&quot;:&quot;1px&quot;}" ><div
			
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	<p dir="ltr" data-pm-slice="1 1 []">The High Court in Mombasa has issued a temporary injunction barring the Agriculture and Food Authority (AFA) from reallocating a Sh15 billion rice import tender, following a controversy over the cancellation of bids awarded to 17 successful importers. The ruling, delivered by Justice Jairus Ngaah on Thursday, prohibits AFA from assigning the 250,000-tonne rice import quota to any private entity outside the lawful tender process conducted by the Kenya National Trading Corporation (KNTC).</p>
<p dir="ltr">The court's decision suspends AFA's move on September 10, 2025, to revoke the tender allocation made by KNTC on July 29, 2025, and the subsequent tender awarded on September 9, 2025. Justice Ngaah emphasized that AFA, along with its agents or assigns, is restrained from issuing or reallocating the rice quota to private individuals or entities without adhering to the lawful process outlined in Gazette Notice No. 10353 of July 28, 2025, and a prior court ruling on August 19, 2025.</p>
<p dir="ltr">The legal action was initiated by businessmen Ibrahim Mohamed and Abdiaziz Noor, who filed a certificate of urgency, arguing that AFA's actions unlawfully redirected the rice quota to undisclosed private entities. The petitioners named AFA, KNTC, the Cabinet Secretaries for Agriculture, Trade, and Treasury, the Kenya Revenue Authority, the Commissioner of Customs and Border Control, and the Attorney General as respondents, with the 17 successful bidders listed as interested parties.</p>
<p dir="ltr">According to the petitioners' lawyer, Abdullahi Yussuf, KNTC had invited 60 qualified importers to participate in a competitive bidding process, from which 17 companies emerged successful. However, on September 10, 2025, AFA revoked the tender allocation, effectively canceling the bids won on September 17, 2025. Yussuf argued that without urgent court intervention, the entire 250,000-tonne quota risked being irregularly reallocated before the October 31, 2025, deadline, undermining transparency, food safety, and fair competition.</p>
<p dir="ltr">Justice Ngaah certified the matter as urgent, directing all parties to file their responses before the next court mention on October 23, 2025. He noted that AFA's actions could undermine an earlier High Court ruling in Kerugoya, which restricted rice imports to 250,000 tonnes. To preserve the integrity of the legal process, the judge granted conservatory orders to prevent AFA's actions from compromising the earlier ruling.</p>
<p dir="ltr">The tender dispute has also drawn international attention, particularly from Pakistani rice exporters. Following the tender's cancellation, the Pakistani High Commission wrote to KNTC on September 12, 2025, seeking clarification on the procedures and guidelines for engaging in Kenya's rice import market to ensure clarity for Pakistani exporters.</p>
<p dir="ltr">Initially, KNTC planned to import 500,000 tonnes of grade one rice to address Kenya's annual rice deficit of nearly 800,000 tonnes. However, a legal challenge by farmers in Kerugoya led Justice Edward Muriithi to cap the import at 250,000 tonnes, to be completed by October 31, 2025. AFA's attempt to replace 16 vetted firms with four companies, Zyan Agencies, Ecoview Commodities, Njema Commodities, and Solid Commodities, none of which participated in the August bidding, sparked further controversy. The duty-free imports, valued at Sh14.8 billion, are part of Kenya's strategy to bridge the rice supply gap.</p>
<p dir="ltr">The petitioners raised concerns that bypassing the lawful tender process threatens competition and public interest. They argued that AFA's actions could concentrate market power, reduce competition in wholesale and retail markets, and expose consumers and local millers to potential price inflation. Furthermore, they criticized AFA for failing to provide reasons for the tender revocation or to publish decision-making records, evaluation criteria, or other relevant information, despite the allocation's national significance. They warned that direct allocation without advertisement risks arbitrary selection, favoritism, or elite capture, eroding public confidence and violating constitutional governance principles.</p>
<p dir="ltr">The High Court's ruling underscores the need for transparency and adherence to lawful processes in public tenders, particularly for critical food imports. As the case awaits further hearing, the conservatory orders aim to safeguard fair competition and protect the integrity of Kenya's rice import strategy.</p>
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