AG fights to save K27 billion

The Attorney General (AG) has blocked payment of K27 billion which government was supposed to pay to Savenda Management Services after a botched ambulance procurement deal.

Savenda, a Zambian-based firm, successfully sued the government after the Ministry of Health cancelled a tender in which it participated, and the High Court, back in March last year, went ahead to award the firm K27 billion.

The High Court had entered a default judgement after former AG Chikosa Silungwe, who had indicated he was going to challenge the judgement, did not comply with certain directions of the court issued earlier.

The court had earlier on November 3 2020 dismissed an application by the AG to set aside the default judgement, but on September 14 2020 leave to appeal against the judgement was granted.

Nevertheless, the Judiciary’s assistant registrar on February 8 2021 awarded Savenda K27 billion in damages.

During the application by the AG, through principal State advocate Neverson Chisiza to allow them appeal, lawyer Paweme Nkhata, representing Savenda, objected to that, arguing the AG wanted to appeal using the backdoor as the timeframe to appeal already expired.

But in his ruling on Tuesday, single judge of the Supreme Court Charles Mkandawire said he was satisfied that the record of appeal in this matter was not yet settled at the time he was hearing the matter.

He said it is only after the record of appeal is settled in the High Court and filed with the Supreme Court and served on the parties that the court can safely say that an appeal has been entered.

“From the totality of the facts before me, I find that this application is premature as the court is not yet served with the appeal. However, taking into account the nature of the dispute and economic repercussions on the State, I order that the record of appeal be ready within 21 days from the date of this ruling

“I further order that pending this exercise, the respondent [Savenda] should not proceed to enforce the default judgement that they obtained. Each party to meet its own costs,” Mkandawire ruled.

The ruling gives the AG a lifeline to argue his case during the appeal to protect K27 billion which government was required to pay to Savenda.

In an interview yesterday, Chakaka-Nyirenda admitted that the process was tedious, especially that it is the duty of the registrar to ensure that the timeline is respected.

He said: “There was a default judgement that was delivered after we failed to comply with the rules, and an assessment, and those monies were in foreign currency, coming up to over K30 billion. Other payments ought not to have been made if we were vigilant.

“Even if one is entitled to K1 million, they will claim K100 million and when there is no contest, they will get it. We will assess all claims, and if there is a way of challenging them, we will do that due to time and other factors. But this determination is a relief,” he said.

Savenda, one of the bidders in the ambulance deal, was awarded the damages after it dragged the ministry to court in January 2020.

The Zambian firm argued in court that the cancellation was not done in the public interest and contravened Section 46 (b) of the country’s Public Procurement and Disposal of Public Assets Act.

In her ruling on September 11 2020, Justice Anita Mtalimanja from High Court (Commercial Division) in Lilongwe agreed with Savenda that the government had created legitimate expectations to the claimant which caused the bidder to incur expenses to fulfil the requirements of the procurement proceedings.

Among others, the court also ordered the defendant to compensate the claimant for the loss suffered by paying £320 000.00 (K360 million then) which the claimant spent on the ministry’s employees during a post-bid evaluation exercise.

It also ordered government to pay the claimant for expenses incurred in the preparation of the bid and pay for general damages for inconvenience, which were to be assessed by the assistant registrar.

The judgement was made without hearing the submission by the defence as the lawyers from the AG’s office, who were representing the Ministry of Health, did not comply with directions of the court to file the submissions by September 2 2020, according to the judgement.