The High Court has cleared Drax Consult SALG (Drax) of any wrongdoing ruling that the company followed the letter of the law in their US$ million contract with the National Pharmaceutical Company (Natpharm) for the supply of medicines and medical sundries.
The contract was cancelled after a national public outcry following corruption allegations surrounding it.
However, in his ruling on Tuesday, Justice Webster Chinamora on Tuesday savaged arbitrators that had come to the conclusion that the contract was illegal.
Justice Chinamora ruled that the arbitrators’ finding was “so outrageous in its defiance of logic or accepted moral standards that a sensible and fair-minded person’s conception of justice in Zimbabwe would be intolerably hurt.”
Arbitrators upheld Natpharm’s argument that the authority relied on by the Drax is not authority given in terms of section 15 (1) and (2) of the Procurement Act making it an affront to public policy.
Circumstances are that on 11 December 2019, Drax and Natpharm entered into an agreement for the supply of medicines and medical sundries by the former to the latter under Tender NAT DP19/2019.
Pursuant to this agreement, Drax delivered medical supplies worth US$2, 733,480-00 to Natpharm.
However, Natpharm refused to take delivery of medicines with a value of US$210, 000-00, which the Drax avers are sitting at Robert Mugabe International Airport.
Natpharm argued, inter alia, that the contract was concluded in contravention of section 15 (1) and (2) of the Public Procurement and Disposal of Public Assets Act.
However, Justice Chinamora established that a letter of 6 November 2019, written on the letterhead of the Procurement Regulatory Authority, authored by the Chief Executive Officer of PRAZ, gave Natpharm authority to procure medicines and surgical sundries from Drax Consult SAGL, under Tender NAT DP19/2019.
“…after acknowledging the resolution by the Special Procurement Oversight Committee (SPOC), the Chief Executive Officer proceeded to advise the respondent to ‘take all necessary steps as directed by the resolution’ and to ‘quote the above SPOC resolution number and the date,” Justice Chinamora ruled.
“…it is evident that in concluding its letter of 6 November 2019, PRAZ adopted the resolution made by SPOC as its own. The net effect of so doing is that PRAZ gave authority gave to the respondent to act in accordance with that resolution in procuring the required medicines and surgical sundries. There is nothing ambiguous about the letter of 6 November 2019.”
He added: “That letter requires no elaborate interpretational aids to decipher its meaning. Given the straightforwardness of its language, it is inevitable to remark that the contention that authority was given by SPOC and not PRAZ is an untenable mirage not supportable by facts. Consequently, I find no conceivable reason for ascribing to SPOC the authority to procure medical supplies from the applicant. Quite clearly, the said letter satisfies the requirements of section 15 (1) and (2) of the Procurement Act.”
“It seems to boggle the mind that the arbitrators found that the contract between the applicant and the respondent was illegal and unenforceable for want of compliance with section 15 of the Procurement Act.”
The High Court further ruled that it is illogical for any fair-minded person to conclude that a contract which has been sanctioned in terms of the law by the body empowered to give its blessing is unlawful.
“My observation is that on a proper examination of the letter of 6 November 2019, the arbitrators could not plausibly have made a finding of illegality of the contract. I hasten to state that my conclusion is not meant to be a review of the arbitrators’ decision,” Justice Chinamora ruled.
“It is not my province to do so. On the contrary, I am merely bringing to the fore that the award is offensive to the public policy of Zimbabwe. The angle I have taken is that it offend public policy in the sense of being so outrageous in its defiance of logic or accepted moral standards that a sensible and fair-minded person’s conception of justice in Zimbabwe would be intolerably hurt,” he added.
Chinamora said Natpharm has not denied receiving medicines worth US$2, 733,480-00 from Drax and “it has not disputed that it refused to pay for the supplies.”
“In fact, in a rather cynical fashion, the respondent (Natpharm) has asserted that it cannot pay because the contract is illegal for not complying with section 15 of the Procurement Act. Therefore, the injustice arising from a finding of illegality, in my view, reaches the point of offending the public policy of Zimbabwe,” he further ruled.
Meanwhile, Drax local representative Delish Nguwaya and former minister of Health and Child Care Obadiah Moyo who were arrested in connection to corruption charges relating to the contract, have since been cleared of the charges while three Natpharm top executives have since been removed from remand over the same charges.
