Drax SAGL International has challenged the cancellation of
its medical supplies contract by Government and plans to seek arbitration in
London on the basis that there might be a small typographical error in the
cancellation letter.
Represented by Mr Delish Nguwaya in Zimbabwe, Drax had
entered into an agreement with Government for the supply and delivery of
medicines and consumables at a cost of US$20 million. But when it became
apparant to the Ministry of Finance and Economic Development, which by law acts
as the procurement backstop by looking at value for money in contracts, that
the supplies were priced well above alternatives, the Minsitry of Health and
Child Welfare was ordered to cancel the deal.
The contract and its cancellation has already seen the then
Health Minister Dr Obidiah Moyo and four officials arrested and charged, and Dr
Moyo fired from his post.
But in a letter written to the National Pharmaceutical
Company from Drax’s legal representatives, Samukange Hungwe Attorneys, the
company said it did not recognise the cancellation of the contract.
“The purported cancellation appears founded on a directive
from the Ministry of Health and Child Care which clearly is outside the
contractual parameters that govern the parties’ relationship,” reads the letter
in part.
“The purported termination is allegedly in terms of Section
89(b) of the Public Procurement and Disposal of Public Acts Act (Chapter
22:23). This Act does not exist.”
The Act referred to is the Public Procurement and Disposal
of Public Assets Act, and the lawyers appear to be relying on a possible
typographical error if “Acts” was written instead of “Assets” in the original
cancellation notice. The chapter number, 22:23, is the correct chapter number.
“Against the above background and in line with the general
conditions of contract and the contract between our parties, our client hereby
gives notice of its intention to commence arbitration under the London Court of
International Arbitration.”
While Drax said the Act does not exist it is listed in all
the lists of Zimbabwean legislation as is readily available in print and on the
internet.
Drax said the route was being pursued on the basis that the
cancellation was not only unlawful but also done without following procedure.
Nguwaya has since appeared in court after his arrest on
allegations that Drax misrepresented to Government that it manufactures
medicines and is remanded out of custody on $50 000 bail.
Natpharm acknowledged receiving the letter from Drax on
July 13. Herald
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