arbitration / adr news
Drax sues the government of Zimbabwe over cancellation of US$60m COVID-19 deal 14 July 2020
CONTROVERSIAL company, Drax Consult SALG (Drax) is suing the National Pharmaceutical Company (Natpharm) over the cancellation of a highly suspicious US$60 million contract it had been granted for the supply of Covid-19 medical supplies. Drax lawyers, Samukange Hungwe Attorneys, have since written to Natpharm arguing the termination of the controversial contract was unlawful. The contract was abruptly cancelled last month after a national public outcry following corruption allegations surrounding it. Drax local representative Delish Nguwaya, former health minister Obadiah Moyo and three Natpharm senior executives were arrested and are answering to corruption charges relating to the contract. "Our client concluded a contract for the supply and delivery of medical supplies with yourselves on 11th December 2019. Our client performed all its obligations in terms of the law," the letter from Drax addressed to an R. Mtombeni of Natpharm reads. "Our client learnt with shock that you purported to cancel the contract for the alleged public interest on 11th of June 2020. "Our instructions are to indicate that your purported cancellation of the 11th June signed by one Mrs. F.N. Sifeku is null and void for the following reasons: (i)The purported cancellation appears founded on a directive from the ministry of health and child care, which is clearly outside the contractual procedures that govern the parties' relationship. "(ii) The purported termination is allegedly in terms of section 89(b) of the Public Procurement and Disposal of Public Act Acts Chapter 22:23. The Act doesn't exist: the purported termination is not for any breach at the insistence of our client, hence the supposed ground of public interest is erroneous and unsupported by law; our client did not, in fact, breach the contract between the parties." In the letter, Drax threatens to take further legal action against Natpharm with the London Court of International Arbitration. "Our client hereby gives notice of its intention to commence arbitration under the London Court of International Arbitration rules (LCIA). This route is being pursued on the basis that the purported cancellation is not only unlawful but was capriciously and unprocedurally done." Source: New Zimbabwe |
