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Supreme Court dismisses Menzies appeal against NAC tender award

The Supreme Court has dismissed an appeal by Menzies Aviation (Namibia) (Pty) against Namibia Airports Company Limited (NAC) for awarding a ground handling contract to Paragon and Partners in a recent judgment.

This comes as the multimillion-dollar airport tender case was heard on 19 April 2023, and concluded on 9 June 2023, resulting in another blow for Menzies.

The background of the case dates back to 2014 when Menzies and NAC entered into a written agreement for ground handling services at the Hosea Kutako International Airport (HKIA) for an initial period of five years, with the right of renewal for three years.

However, when the termination date approached, new bids were invited, and Paragon Investment Holdings (Pty) Ltd, a joint venture with Ethiopian Airlines, emerged as the successful bidder. Menzies' bid was disqualified due to non-compliance with tender conditions.

Disputes arose between Menzies and NAC, leading Menzies to file a review application questioning the constitutionality of certain provisions of the Public Procurement Act.

NAC responded by giving notice of termination, which was subsequently withdrawn, but the "parties failed to reach an agreement on the continuation of services beyond the termination date", according to court documents.

NAC then launched an urgent application seeking a declaratory order to terminate the agreement on 30 June 2022.

"The High Court ruled in favour of NAC and struck down Menzies' counter-application.

Menzies appealed the decision, raising several grounds, including the involvement of the Namibia Civil Aviation Authority (NCAA), the alleged tacit relocation of the agreement, and the abuse of process," the court said.

However, the Supreme Court dismissed the appeal, providing important clarifications on various aspects of the case. 

Regarding the NCAA's involvement, the court held that the NAC, "as per the Airports Company Act, has the authority to manage and control the HKIA and enter into agreements with service providers.”

"The NCAA's role is limited to ensuring compliance with civil aviation standards, and it has no direct interest in the NAC's choice of service provider."

On the issue of tacit relocation, the court determined that Menzies failed to prove that their agreement with NAC was relocated beyond the termination date.

"The evidence showed that Menzies disputed the validity of the notice but eventually accepted the continuation of the original agreement."

Thus, the court rejected Menzies' reliance on a tacit relocation agreement.

Regarding the collateral challenge, the court stated that Menzies' unlawful occupation of the premises must come to an end.

"As Paragon was awarded the bid and there was no indication of the bid being set aside, it should be allowed to act according to the terms of the bid. The lawfulness of the award canvas to be decided in the pending review application," the judgment reads.

The case was presided by Supreme Court Judges of Appeal, Sylvestor Mainga, Elton Hoff and Theo Frank.

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Last modified on Monday, 12 June 2023 21:05

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