DIS letter haunts China Jiangsu

Chinese state owned company, China Jiangsu International (CJI) has been ordered to pay litigation costs for a case against Botswana government and Zhengtai Group for the construction of the P400 million Moshupa Primary Hospital, which they recently abandoned.

CJI has been fighting a messy battle with Botswana government for the Moshupa Hospital tender after they were snubbed by PPADB after the Directorate of Intelligence and Security  Services (DIS) wrote a letter to procuring entities alleging that the company is involved in massive corruption and therefore a threat to national security.

Consequently, numerous government tenders, which had been awarded to CJI were cancelled. The Moshupa Primary Hospital tender was re-awarded to another Chinese company,  Zhengtai Group Botswana and have already started the construction of the project. Upon realising  which prompted CJI to withdraw their case which they

CJI filed a lawsuit in an attempt to interdict the commencement of the project while challenging the cancellation of the tender based on the DIS allegations, but decided to abandon the case when they discovered that Zhengtai had already started construction. They stated in their court papers that it will be pointless or an academic exercise to proceed with the review without the protection of the interdict.

Another reason for withdrawing the case was that government and Zhentai Group have already signed a contract and in terms of Section 105 of the PPADB Act, the court cannot grant the contract to the applicant even if grounds for review exists.

High Court Judge Reiner Busang in his judgment ordered that CJI to pay the cost of the application as they are the ones who instituted the litigation. “The order against the applicant would be justified by the rules of the court which require a party who withdraws or discontinues the proceedings to tender costs,” he said, emphasising that the costs are meant to indemnify a party for the expense to which he has been put through for having been unjustly compelled to defend litigation.

In the application, CJI wanted the respondents to tender the costs reasoning that facts on the ground have been allowed to change dramatically to their detriment as the respondent played delaying tactics in closing the matter. CJI argued that government was playing delaying tactics knowing very well that the court would not be inclined to set aside an invalid award of a contract where substantial works have been carried out.

Dismissing that, Justice Busang said that he is not convinced that an order for costs against the applicants will be justified as the circumstances warranting the pursuit of the otiose case should have been clearly explained. “I am not convinced regard being had to the totality of the conspectus of this case, that an order for costs against the respondents would be justified. In fact the contrary should be the case,” he said.

Last year High Court Judge Singh Walia dismissed CJI urgent application for an interdict for the construction of the Moshupa Primary Hospital. Though the DIS letter which implicated them in massive corruption was later dismissed by the courts of law the company is yet to recover from its implications.

Last year CJI brought legal proceedings challenging Public Procurement and Asset Disposal Board (PPADB)’s decision to award a tender for the construction of Moshupa Hospital to its rival Zhengtai Group Botswana.

PPADB withdrew awarding the tender to CJI citing an advice by the DIS, and though Justice Dube said the manner in which the information or interjection by DIS was introduced and executed was unprocedural and outside the procurement process, it will be detrimental to public interest to suspend the project.

“The legal challenge meant that the contract award procedure would be suspended for basically an indefinite period or until the matter has been determined. The correct approach would be to consider the consequences of suspending the project which would be detrimental to the public health more than it would be too prejudicial to Jiangsu Botswana’s private commercial gain,” said Dube.

Jiangsu tendered for a Works Contract for the Procurement of Proposed New Primary Hospital at Moshupa Tender No.WOR 7/6/8 and it was recommended for the awarding of the tender only for it to be awarded to another Chinese company, Zhengtai Group Botswana.