Drax deal above board: High Court

HIGH Court judge Justice Webster Chinamora yesterday ruled that the controversial US$20 million Drax Consult SAGL deal to supply personal protective equipment and COVID-19 test kits that cost former Health and Child Care minister Obadiah Moyo his job was valid.

Moyo was accused of illegally awarding a US$20 million contract to Drax Consult SAGL, a Dubai-based company, to supply medical equipment to National Pharmaceuticals (NatPharm) without following tender procedures.

Delish Nguwaya, a local representative of Drax International, who was reported to be an associate of President Emmerson Mnangagwa’s son, Collins, was arrested as part of the same investigation.

After a public outcry, government cancelled all contracts with the company.

In a ruling delivered yesterday, Justice Chinamora said the deal was above board and NatPharm had no legal standing to cancel it as it had been approved by the Procurement Regulatory Authority of Zimbabwe (Praz).

Nguwaya approached the court challenging the cancellation of the contract by NatPharm.

The Dubai-based firm sought the setting aside of an arbitral award granted in favour of NatPharm on March 1, 2021 that supported the cancellation of the Drax tender.

But Chinamora said Praz approved the purchase of the medical sundries by Drax on behalf of NatPharm and that the cancellation of the contract was illegal.

NatPharm was slapped with the cost of suit.

“In the result, I grant the following order that paragraph 84A of the arbitral award of March 1, 2021 be and is hereby set aside and the respondent shall pay costs on the legal practitioner and client scale,” Justice Chinamora ruled.

On December 11, 2019, NatPharm and Drax 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 the agreement, Drax delivered medical supplies worth US$2 733 480 to NatPharm.

However, NatPharm refused to take delivery of medicines valued at US$210 000, which Drax claims are sitting at Robert Gabriel 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 [Chapter 22:23], referred hereinafter as the Public Procurement Act.

Arbitrators upheld NatPharm’s view, resulting in Drax approaching the court for redress.

“For the purposes of section 15 of the Procurement Act, Praz is the authority required to authorise procurement requirements at or above the threshold. That this is so is underlined in the definition section (ie section 2), which provides that ‘authority’ means the Procurement Regulatory Authority of Zimbabwe established by section 5.

“The respondent’s argument is that the authority relied on by the applicant is not authority given in terms of section 15(1) and (2) of the Procurement Act and, consequently, the award cannot be set aside on the basis that it is an affront to the public policy of this country,” Justice Chinamora ruled.

“The letter of November 6, 2019 merits careful and intimate examination. I notice that the respondent has only referred to the resolution by Special Procurement Oversight Committee (SPOC), which is mentioned in that letter. In my view, such a simplistic (if not, shallow) approach does not do justice to the resolution of the dispute in this matter.”

He added: “Short of not applying their minds to it, I find it inexcusable for them to find that authority for procurement had not been given by Praz. The award would have been made against the evidence. Pertinently, in this context, the respondent has not denied receiving medicines worth US$2 733 480 from the applicant.

“Additionally, it has not disputed that it refused to pay for the supplies. In fact, in a rather cynical fashion, the respondent 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.

“In light of my conclusion that the letter dated November 6, 2019 was written by Praz, it referred to the resolution by SPOC to award Tender NAT DP19/2019 for medical supplies to the respondent by the applicant: and concluded by adopting SPOC’s position as its own, I am satisfied that the applicant has established the case for the relief that it seeks.”

Nguwaya was being accused of misrepresenting that his company, Drax International, also known as Drax Consult SAGL, was a pharmaceutical company based in Switzerland in a bid to be awarded tenders for COVID-19 supplies to the Health ministry.

Drax International was said to have been registered only two weeks prior to the US$2 million being deposited into the company’s Hungary bank account.

Mnangagwa’s son, Collins, denied links with the Drax boss, despite pictures of Nguwaya with members of the President’s family at a State function having gone viral on social media.

He told the court that there was a social media conspiracy that Nguwaya and his company, Drax, were linked to the First Family.