Court to decide on Acsa’s duty-free shops tender debacle

22 May 2018 - 15:49 By Ernest Mabuza
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Judge court gavel
Judge court gavel
Image: Gallo Images/iStockphoto

The Constitutional Court has been called on to decide whether a settlement agreement between two bidders - and which was made an order of the court - is capable of reviving a tender award which was set aside by the High Court.

The Airports Company South Africa (Acsa) on Tuesday asked the court to set aside the order made by the Supreme Court of Appeal last year.

The SCA declared that Acsa was bound by its decision taken on August 26, 2009 to award to Big Five Duty Free the right to operate VAT free stores in three of its international airports.

Following a tender process‚ Acsa awarded the contract to Big Five in 2009.

However following a court challenge by losing bidder DFS Flemingo SA‚ Pretoria High Court judge Lebogang Phatudi set aside the award in 2012 on the basis that it was unlawful.

Big Five was unhappy with Phatudi’s decision and appealed against that decision.

The full bench of the high court heard the appeal‚ which was opposed by by Flemingo. Acsa did not participate in the review.

Before judgment was handed down in that appeal‚ Big Five and Flemingo reached a settlement whereby Flemingo abandoned the Phatudi judgment in its favour and Big Five withdrew its appeal before the full bench.

The agreement between Flemingo and Big Five was made an order of the court in June 2014.

However‚ Acsa said it was not bound by the order as it was only between the two parties and started the tender process again.

This did not sit well with Big Five‚ which approached the high court and sought an order declaring that Acsa was bound by the award it had made in 2009.

Judge Wendy Hughes refused Big Five’s application in 2016 and said the order by Phatudi was a public remedy and could not be set aside by private parties.

However‚ Big Five succeeded in the Supreme Court of Appeal last year.

The appeal court said the purpose of the withdrawal of the appeal by Big Five and the abandonment of the original review proceedings by Flemingo amounted to the setting aside of the order of Phatudi.

Acsa argued in the Constitutional Court on Tuesday that the settlement agreement‚ which was made an order of the court‚ did not overturn Phatudi’s judgment declaring the tender award invalid.

Gilbert Marcus SC‚ for Acsa‚ said the airports company was not party to the settlement negotiations between Big Five and Flemingo.

Marcus said the settlement agreement was meant to bring an end to litigation between Big Five and Flemingo and did not mean that Phatudi’s order could be ignored.

However‚ Big Five counsel Wim Trengove SC said the full bench order was binding on all parties. He said Acsa could not obey the 2014 order because of the assumption it was wrong.

“The purpose of the (settlement) agreement was to undo the Phatudi order in every possible way‚” Trengove said.

He said Rule 41(2) of the Uniform Rules of Court allowed any party in whose favour any judgment had been given to abandon that judgment.

The court reserved judgment.


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