Special Investigating Unit and Another v LNG (Pty) Ltd (GP03/2022) [2024] ZAST 1 (7 February 2024)

Special Investigating Unit and Another v LNG (Pty) Ltd (GP03/2022) [2024] ZAST 1 (7 February 2024)

The Tribunal found that the procurement contract awarded to LNG (Pty) Ltd was unlawful and invalid due to non-compliance with statutory and regulatory requirements, including failure to follow competitive bidding, lack of approval for deviation, and absence of proper authority by the CFO. The directives issued for the further conduct of the review application were interlocutory and not suspended by the noting of an appeal. LNG failed to apply for condonation or to suspend the directives under section 18(2) and (3) of the Superior Courts Act. The Tribunal dismissed the irregular step application and proceeded to determine the default judgment application. On the merits, the Tribunal held...

Citation
[2024] ZAST 1
Parties
Applicant: Special Investigating Unit; Applicant: MEC: Gauteng Department of Health; Respondent: LNG (Pty) Ltd
Court
Special Tribunal
Jurisdiction
South Africa
Judgment Date
7 February 2024
Case Number
GP03/2022
Procedural Posture
Review Application / Default Judgment and Irregular Step Application
Outcome
The review application succeeds. The procurement decision and resulting contract are reviewed and set aside. LNG is divested of profits earned under the contract. Costs awarded against LNG.
Judges
L.T. Modiba
Legal Topics
Legality Review, Public Procurement Irregularity, Default Judgment, Emergency Procurement, Just and Equitable Remedy, Divestment of Profits
Administrative Law Civil Procedure Commercial and Corporate Legality Review Public Procurement Irregularity Default Judgment Emergency Procurement Just and Equitable Remedy +1 more

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Parties

Special Investigating Unit

Applicant

MEC: Gauteng Department of Health

Applicant

LNG (Pty) Ltd

Respondent

Procedural Posture

Review Application / Default Judgment and Irregular Step Application

Legal Issues

  1. 1 Whether the procurement contract for PPEs awarded to LNG (Pty) Ltd was irregular and unlawful.
  2. 2 Whether the directives issued by the Tribunal for the further conduct of the review application are automatically suspended pending appeal.
  3. 3 Whether LNG (Pty) Ltd should be divested of profits earned under the impugned contract.

Ratio Decidendi

The Tribunal found that the procurement contract awarded to LNG (Pty) Ltd was unlawful and invalid due to non-compliance with statutory and regulatory requirements, including failure to follow competitive bidding, lack of approval for deviation, and absence of proper authority by the CFO. The directives issued for the further conduct of the review application were interlocutory and not suspended by the noting of an appeal. LNG failed to apply for condonation or to suspend the directives under section 18(2) and (3) of the Superior Courts Act. The Tribunal dismissed the irregular step application and proceeded to determine the default judgment application. On the merits, the Tribunal held...

Court Disposition

The review application succeeds. The procurement decision and resulting contract are reviewed and set aside. LNG is divested of profits earned under the contract. Costs awarded against LNG.

Orders

  • The decision of the Chief Financial Officer of the Gauteng Department of Health taken on or about 24 April 2020 to procure PPEs from LNG (Pty) Ltd is reviewed and set aside.
  • The resulting contract and all purchase orders issued pursuant thereto are declared unlawful and invalid.