Govt ordered to pay P43m into airport account
Mpho Mokwape | Thursday April 16, 2015 12:24
He stated that the order must be enforced because none of the parties contested it at DAB.
He said the DAB decision was final and binding on both parties. The state had refused to obey the order saying that a case on the matter is pending at the International Chamber of Commerce (ICC) in London. Charles Gulubane for the state argued that the matter should be struck out because it is tantamount to running a parallel case to the one before the ICC. He said the ICC case will determine the legality of the government’s termination of Sinohydro’s contract for the construction of SSKIA and subsequently determine how the performance bond in dispute should be handled.
However, Leburu disagreed and said: “In my view the opening of such as escrow account, as determined by the DAB, although it concerns the same parties and arises from the same contract, is not pending before the ICC. Issues referred to the ICC are only those that are not final and binding”.
Gulubane had sought to punch holes in Sinohydro’s case arguing that it was at the onset fundamentally flawed because it was based on a founding affidavit by an employee, Pan Chunyu, who was not authorised by the company’s board directors to institute legal proceedings which can possibly expose the company to litigation costs.
The construction firm launched legal proceedings after the government terminated its contract in the expansion of SSKIA in July 2012 for “failure to complete the expansion of the airport within stipulated time frames and cost estimates.”.
Following the termination, government retrieved the P43 million bond in the contract. The matter was taken to the DAB, which declared the termination lawful but the bond funds should be transferred back to an escrow account.
For Sinohydro, Msiya Kindiano told Justice Leburu that the government did not raise any objection to the DAB decision within the stipulated 28 days after the May 2013 verdict. Thie therefore rendered the decision final and binding. “In this regard we are seeking the court to compel government to comply with the DAB decision and deposit the P43 million sum into an escrow account to be opened under the joint names and signatories of Sinohydro and the Ministry of Infrastructure Science and Development.
As ordered by the DAB, these funds are to be utilised solely to reimburse government for any claims against Sinohydro that are duly processed and approved by the project engineer,” he argued.
The DAB verdict stated that any funds that remain after all government claims from the performance bonds will be transferred to the Chinese company.