DRAX CONSULT has won a court case in which it sought the setting aside of an arbitral award made in favour of the National Pharmaceutical Company (Pvt) Ltd for the supply of medicines to the latter.
In his judgment delivered on Tuesday, Justice Webster Chinamora ruled that Applicant, Drax Consult, was empowered by a letter from the Procurement Regulatory Authority of Zimbabwe to supply medicine on behalf of the Respondent, NATPHARM.
The Respondent had made an application to stop the Applicant from supplying the medicines on the basis that it had failed to comply with section 15 (1) and (2) of the Public Procurement and Disposal of Public Assets Act [Chapter 22:23].
The facts of the matter are that on 11 December 2019, DRAX and NATPHARM entered into an agreement for the supply of medicines and medical sundries under Tender NAT DP19/2019. Following the agreement, the applicant delivered medical supplies worth US$2,733,480.00 to the respondent. However, the respondent refused to take delivery of medicines with a value of US$210,000.00, which are reportedly sitting at Robert Mugabe International Airport.
NATPHARM argued that the contract was concluded in contravention of section 15 (1) and (2) of the Public Procurement and Disposal of Public Assets Act which says: “15 (1) A procurement entity shall not initiate or conduct any procurement requirement proceedings in which the value of the procurement requirement is at or above the prescribed threshold, unless such procurement entity has been generally authorized by the Authority to conduct such proceedings. 15 (2) Authorization in terms of subsection (1) shall be given in writing”.
NATPHARM therefore refused to pay for the medicines and medical sundries supplied to it by DRAX, contending that the arbitral award was correctly made in respect of paragraph 84A. On 9 June 2020, the respondent canceled with immediate effect the tender (NAT DP19/2019) for the supply of the medicines and related sundries.
However, DRAX’s view was that the cancellation was unlawful, and the dispute was referred to arbitration. The arbitrators also found that the contract of 11 December 2019 was illegal on the basis that it was concluded without the authority contemplated by the Procurement Act. Consequently, DRAX argued that a letter dated 6 November 2019 written by the Chief Executive Officer of PRAZ to the Managing Director of NATPHARM which recommended the award of the same tender to DRAX CONSULT for the supply and delivery of registered medicines and surgical sundries to Natpharm regional stores.