DURBAN - THE Supreme Court of Appeal (SCA) has this month ordered eThekwini Municipality to pay more than R10 million to an Italian company, which has historical business links to former city’s deputy mayor Philani Mavundla, for the construction of the city’s interchange bridge.
The SCA rejected the city’s appeal against the Durban High Court order that the money must be paid to Cooperativa Muratori & Cementisti (CMC) di Ravenna, which constructed a state-of-the-art Cornubia interchange bridge in Umhlanga.
Both courts agreed that the city had breached the contractual agreement by refusing to pay the money.
This was among eight litigations that the state has lost this month alone.
The project, which was estimated to have cost R816 million and R1.14 billion, was a joint venture of The South African National Road Agency and the KwaZulu-Natal Department of Transport.
But it was reported that eThekwini and Tongaat Hulett also contributed R280 million to the construction of the bridge that eased the traffic flow on the N2 on and off ramps into the M41 highway, which connects the uMhlanga Ridge Boulevard and Cornubia area.
The SCA also ordered the city to fork out the legal costs of the CMC, which is originally from Italy but enjoyed massive tenders worth billions of rands from South Africa’s Department of Transport.
The judgment concluded that the city had failed to present a convincing argument that the SCA should overturn the high court judgment.
“The court is being asked to deny the only remedy available to the contractor, notwithstanding that the contractor’s right to the remedy has been established,” said Acting Appeal Judge Peter John Olsen.
According to Forensic for Justice’s 2018 report entitled “Any port in a storm?”, CMC has had historical business relationships with Mavundla stemming from the Transnet tender awarded to CMI Emtateni Joint Venture (JV).
They also worked together on a number of other projects, including Eskom’s Ingula in Ladysmith and the construction of KwaZulu-Natal north coast’s John Ross Highway.
Mavundla, the leader of the opposition party, Abantu Batho Congress (ABC), was ousted as the deputy mayor in December. There were no indications that he was involved in the Durban bridge project.
eThekwini spokesperson Mluleki Mntungwa did not respond to questions sent to him although he had promised to forward the questions to the city’s legal department, which would also explain why the CMC was demanding the payment and why the city was refusing to pay.
The court papers failed to explain why eThekwini had refused to pay except to say that CMC had in 2018 terminated the deal struck in 2015, but still demanded the payment. CMC took the matter to the adjudicator also demanding that the city should also pay “interest thereon as stipulated in the contract.”
The city did not comply with the adjudicator’s decision, which favoured the CMC. The CMC then took the matter to the Durban High Court, which ruled against the city.
The city approached the SCA to appeal against the high court and the adjudicator’s decisions saying they might be legitimate, “but may nevertheless in due course be revised.”
“The contractor contends that the employer’s notification of the dispute was not in compliance with the provisions of the contract, as a result of which the adjudication decisions have become final,” read the court papers.
The city also argued that enforcement of the adjudicator’s and high court’s decisions would be contrary to public policy.
However, Judge Olsen disagreed with the city.
“Allowing the courts to refuse such a judgment in the exercise of a discretion may disturb the vital balance set in our public policy rules which are designed, inter alia, to ensure that the public interest in the values underlying the doctrine of pacta sunt servanda (agreements must be kept) are adequately served and protected.
“I conclude that there is no merit in the employer’s argument that the contractor has made a claim for specific performance which engages the discretion which our courts have to grant or refuse such orders when the contractual obligation sought to be enforced is one ad factum praestandum (an obligation fulfilment of a specific act).
SUNDAY TRIBUNE