Government Contracting

Erindi Ranch (Pty) Ltd v Government of the Republic of Namibia and Others (A 72/2011) [2011] NAHC 330 (11 November 2011);

Headnote and Holding: 

The matter dealt with a delay by the respondents to issue a permit for the import into Namibia of elephants published in Government Gazette No. 4236, Notice 60, dated 1 April 2009. 

The court considered whether the delay was ultra vires the provisions of the Nature Conservation Ordinance No. 4 of 1975. The respondents conceded that the moratorium was ultra vires the ordinance and accordingly, the court agreed with their concession.
The court considered further, whether it should make an order directing the second respondent to issue the required permit to the applicant. The principle to be applied in the circumstances was that the court had discretion once it set aside an administrative decision to take the decision itself and this discretion was to be exercised judicially. The court observed that the second respondent had not yet decided whether to grant or deny the application and that the second respondent was better positioned to decide because it was privy to factual material which the court was not. Accordingly, the court held that it could not order the second respondent to issue the permit to the applicant.
The court considered whether the applicant and second respondent entered into a valid agreement. The test to be applied was to inspect the intention of the parties. The court concluded that whilst the applicant and second respondent had discussed and agreed upon some conditions, those were not intended to be the only conditions. Accordingly, the court held that no valid agreement was concluded.

Namibia Water Corporation Limited v Aussenkehr Farms (Pty) Ltd (Case No.: I 1286/2005 ) [2009] NAHC 1 (09 January 2009);

Headnote and Holding: 

The matter dealt with an alleged breach of contract that required the plaintiff to supply large amounts of water to the defendantís wine farm. The contract contained two main clauses namely, that the defendant would reimburse the plaintiff a maximum of N$300000 for obtaining tenders and  would design and construct the bulk water supply scheme in the absence of an alternative agreement.

The plaintiff contended that the agreement was never entered into despite the work being carried out and as a result, they were entitled to reimbursement because the defendant breached the two main clauses of the contract. In response, the defendant alleged that the plaintiff was vicariously guilty of breach of contract as a result of which the defendant says it terminated contract.

The main question before the court was whether the plaintiff was vicariously guilty of breach of contract which resulted in the defendantís termination of the contract and in the alternative. The court also considered whether the respondent would be required to pay for the work done as per the agreement. 

The court found that no such breach existed and that had there been a breach, the defendant, would have been required to communicate termination of the contract which it failed to do. The court concluded that the reliance on an alleged oral agreement had not been proved by facts ëíin the clearest and most satisfactory manneríí. The court found in favour of the applicant.

Minister of Mines and Energy and Others v Petroneft International Ltd and Others (SA 32/2011) [2012] NASC 5 (21 June 2012);

Headnote and Holding: 

This was a Supreme Court case that revolved around an agreement between the parties which was suddenly terminated. The agreement demanded that the respondent to import oil resources on behalf of the Government of Namibia. The arrangement proved to be failure as the cost of importing petroleum was high against the market price. Consequently, the first appellant, acting in ministerial capacity decided to end the agreement.  The first respondent felt aggrieved and filed a suit in the High Court, asking it to review the decision of the cabinet that terminated the said contract.

As such, the main issue, in this case, was whether the cabinet of the government of the Republic of Namibia acted lawfully when it revoked the mandate of the respondents to import petroleum products.  The High Court in determining this issue held that the cabinet had no legally tenable reason(s) to end the contract in question.

However, on appeal, the Supreme Court held that under the Namibian Constitution in article 27(2), the executive power of the Republic of Namibia vests in the president and the cabinet. It further held that under the article, the cabinet has the role of supervising the activities of the government departments.  Since the third, fourth, fifth, and sixth respondents are government parastatals the cabinet justifiably exercised its regulatory powers in the best interest of the Namibian people. 

The Supreme Court thus overturned the decision of the High Court and accordingly upheld the appeal.