Companies

Airbus gets court backing for Sh450m chopper order by Mining ministry

judge

High Court Judge George Odunga. PHOTO | FILE

The Ministry of Mining has been ordered to either state the position of a Sh450 million tender for supply and commissioning of a customised helicopter within 30 days or purchase the aircraft from South African firm Airbus Helicopters PTY.

Justice George Odunga has ruled that the Mining ministry acted illegally by going silent for more than a year after Airbus Helicopters was declared the winner of the tender.

The judge noted that after the procurement process, public bodies can either enter into a contract with the winning bidder or cancel the entire process. He held that the procuring entity must, however, communicate its position to the winning bidder.

Airbus Helicopters claimed it started assembly and customisation of a Sh450-million helicopter after receiving a letter from the Mining Ministry declaring it the winning bidder.
The firm wanted Mr Justice Odunga to hold that the letter is equivalent to a valid contract.

The judge held that Airbus acted presumptuously in assuming that a contract would be entered into with the ministry after being declared the best bidder.

He, however, ruled that whatever decision made by the ministry ought to have been communicated to Airbus.

“The law itself recognises that a procurement process may be terminated before a contract is entered into and that in such event, the procuring entity does not incur any liability.

“It is clear that by placing the applicant in a state of suspense, the ministry failed to exercise its statutory duty, not to enter into a contract, and to notify the applicant of that decision.

“I hereby grant an order of compelling the respondent to, within 30 days of service of this decision, notify the applicant of the procurement process between it and the applicant.

“In default of compliance, an order of shall issue forthwith compelling the respondent to execute the formal contract in respect of the tender for the supply, delivery and commissioning of a new helicopter,” Mr Justice Odunga ruled.

Airbus claimed that it had held meetings with ministry officials who promised to ensure that it is furnished with a contract, something that is yet to happen.

But the Mining ministry in response said Airbus could only file a suit to demand compensation for contract breach if it felt aggrieved by the decision not to offer it a contract.

The ministry further claimed that the court did not have authority to order it to enter into a contract.