Joint venture sues for lost profits
CHICO/Octagon Joint Venture, after having lost in both the Supreme and High Courts in having the tender award set aside, now want lost profits.
A lawsuit brought by CHICO/Octagon Joint Venture against the Roads Authority is back in the Windhoek High Court.
The civil action was filed last September following a ruling by the Supreme Court in August 2017. That court had upheld a High Court ruling dismissing the joint venture's application to have a tender award by the Roads Authority set aside.
That matter related to the construction of part of a dual carriageway between Swakopmund and Walvis Bay. The tender was awarded to UNIK/Joint Venture.
CHICO/Octagon Joint Venture is now asking the High Court to award it N$90 million, which it would have made in profit had it been awarded the job.
Mediation in the matter was cancelled by the presiding judge, Hannelie Prinsloo, and the matter was postponed to 29 April for an interlocutory hearing. It was in court yesterday for a status hearing.
In its particulars, the joint venture says that based on the tender's rule 25, the Roads Authority was obliged to “award the tender to the tenderer achieving the highest tender index and who is deemed to be the preferred tenderer”.
It says in accordance with the rules, it had achieved the highest tender index as set out in rule 25 and, thus, was entitled to be awarded the tender.
Quoting article 18 of the constitution, the joint venture told the court that the Roads Authority was inconsistent with the prescriptions of the article and did not act in a transparent manner.
It also quoted the ruling by the Supreme Court, of which a part reads that “in these circumstances there was no basis for the (Roads Authority) board to not award the tender to the applicant (CHICO/Octagon Joint Venture)”.
In its 2017 ruling, the Supreme Court found that it did not have all the facts before it to allow it to consider the extra costs of re-awarding the tender. Therefore, the court had no option “but to allow the invalid award to stand”.
Consequently, the joint venture says, it suffered damages of N$90 million in the form of profit it would have received from the job.
It also asked the court for unspecified interest and legal costs.
In response, the Roads Authority filed eight exceptions including that the damages had been framed as constitutional and a proper cause of action for such damages had not been set out.
It also told the court that in its view, an act of omission was not prima facie wrongful in terms of pure economic loss. It also said the joint venture had failed to plead the elements necessary to sustain a contractual cause of action.
It asked for the action to be dismissed. Its exceptions will be heard on 29 April.
CHICO/Octagon Joint Venture is comprised of China Henan International Cooperation Group, which owns 90%, and Octagon Construction, a local black empowerment company. It is represented by Sisa Namandje, while Patrick Kauta from Weder, Kauta and Hoveka represents the Roads Authority.
YANNA SMITH
The civil action was filed last September following a ruling by the Supreme Court in August 2017. That court had upheld a High Court ruling dismissing the joint venture's application to have a tender award by the Roads Authority set aside.
That matter related to the construction of part of a dual carriageway between Swakopmund and Walvis Bay. The tender was awarded to UNIK/Joint Venture.
CHICO/Octagon Joint Venture is now asking the High Court to award it N$90 million, which it would have made in profit had it been awarded the job.
Mediation in the matter was cancelled by the presiding judge, Hannelie Prinsloo, and the matter was postponed to 29 April for an interlocutory hearing. It was in court yesterday for a status hearing.
In its particulars, the joint venture says that based on the tender's rule 25, the Roads Authority was obliged to “award the tender to the tenderer achieving the highest tender index and who is deemed to be the preferred tenderer”.
It says in accordance with the rules, it had achieved the highest tender index as set out in rule 25 and, thus, was entitled to be awarded the tender.
Quoting article 18 of the constitution, the joint venture told the court that the Roads Authority was inconsistent with the prescriptions of the article and did not act in a transparent manner.
It also quoted the ruling by the Supreme Court, of which a part reads that “in these circumstances there was no basis for the (Roads Authority) board to not award the tender to the applicant (CHICO/Octagon Joint Venture)”.
In its 2017 ruling, the Supreme Court found that it did not have all the facts before it to allow it to consider the extra costs of re-awarding the tender. Therefore, the court had no option “but to allow the invalid award to stand”.
Consequently, the joint venture says, it suffered damages of N$90 million in the form of profit it would have received from the job.
It also asked the court for unspecified interest and legal costs.
In response, the Roads Authority filed eight exceptions including that the damages had been framed as constitutional and a proper cause of action for such damages had not been set out.
It also told the court that in its view, an act of omission was not prima facie wrongful in terms of pure economic loss. It also said the joint venture had failed to plead the elements necessary to sustain a contractual cause of action.
It asked for the action to be dismissed. Its exceptions will be heard on 29 April.
CHICO/Octagon Joint Venture is comprised of China Henan International Cooperation Group, which owns 90%, and Octagon Construction, a local black empowerment company. It is represented by Sisa Namandje, while Patrick Kauta from Weder, Kauta and Hoveka represents the Roads Authority.
YANNA SMITH
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