Drax challenges cancellation of US$20 million Covidgate contract, seeks arbitration in London

By Nyashadzashe Ndoro

Drax International has challenged the government’s cancellation of its medical supplies contract regardless of the public outrage surrounding the USD 20 million Covidgate scandal.

The company has said plans were afoot to seek arbitration in London on the basis that there is a typographical error in the cancellation letter. 

At the centre of the Drax corruption scandal is Zimbabwe’s First Family with President Emmerson Mnangagwa’s son Collins and First Lady Auxilia Mnangagwa fingered as alleged beneficiaries.

Drax Consult and another called Drax International both represented by an alleged friend of the Mnangagwa family friend, Delish Nguwaya, were first awarded a contract worth USD 20 million to supply medical equipment and medicines and another USD 40 million for the supply of Covid-19 medicine and personal protective equipment without requisite paperwork.

The contract cancellation has already seen Dr Obadiah Moyo being fired as Minister of Health and Child Welfare after he was arrested, released on ZWL $50 000 bail last month by Zimbabwe Anti-Corruption Commission (ZACC) officials over the USD 60 million scandal.

Drax legal representatives, Samukange Hungwe Attorneys have now written a letter to the National Pharmaceutical Company claiming that Drax did not recognise the cancellation of the contract.

“The purported cancellation appears founded on a directive from the Ministry of Health and Child Care which clearly is outside the contractual parameters that govern the parties’ relationship,” read the letter.

The lawyers have cited the Public Procurement and Disposal of Public Assets Act, saying there was a typographical error in the original cancellation notice after “Acts” was written instead of “Assets”.

“The purported termination is allegedly in terms of Section 89(b) of the Public Procurement and Disposal of Public Acts Act (Chapter 22:23). This Act does not exist.

“Against the above background and in line with the general conditions of contract and the contract between our parties, our client hereby gives notice of its intention to commence arbitration under the London Court of International Arbitration,” read the letter. Nehanda Radio