Dignia Systems, the Israeli company at the centre of the P250 million National Petroleum Fund (NPF) money laundering case, has taken the Directorate of Intelligence and Security Services (DISS) to court.
The company is seeking an order compelling the DIS and the Attorney General (defendants) to accept delivery of the remainder of the orders under the contract and is demanding USD 11 320 0000.00 (about P123 million).
According to papers before the Lobatse High Court, as at 10th October the only outstanding deliverables were three Unmanned Aerial Vehicles (UAVS) and their accessories, part of the Special Forces equipment and training.
“The unmanned aerial vehicles or drones their accessories and the remainder of the Special Forces equipment are ready for delivery and plaintiff is ready to conduct the associated training,” read part of the papers.
Dignia states that on or around 21 November 2017, DIS made payment of half the contract price, leaving a balance of USD 11320 0000.00 which remain due, owing and payable.
“Such payment was made through a company called Khulaco Management Services which is a company approved by the second defendant and or the Botswana Government to make payment in respect of the project,” Dignia stated.
According to Dignia, on 13 August, DIS addressed a letter to it in which it indicated that it had taken a decision to suspend the contract agreement on the basis that it did not conform to standard procurement procedures among other things. Dignia said it responded to the letter insisting on specific performance of the contract.
On the 18th September Dignia addressed another letter to the Attorney General and DIS, through its attorneys, in which it invited them to resolve the dispute as envisaged by the agreement. The company also indicated that the remainder it is ready for delivery at any time. DIS did not respond the letters from Disgnia.
“The second defendant (DIS) has neglected or refused to make any effort to resolve the dispute amicably as envisaged by claused26 of the agreement. Despite plaintiff’s efforts, amicable settlement has failed and accordingly Plaintiff is entitled to bring this action,” said Dignia.
Notwithstanding the purported suspension of the execution of the contract as per the letter of 13 August 2018, second defendant continued to receive and accept various deliverables in terms of the contract.
The company states in court papers that on diverse dates between 9th August 2018 and September 2018 it delivered and DIS accepted such delivery items including equipment for Special Forces, Suv Platform Support, and training.
“The Plaintiff has complied with the terms of the agreement in particular obligations therein and tendered to perform such obligations. Alternatively the plaintiff hereby tendered to perform its obligations by immediately delivering the balance of the equipment, three unmanned aerial vehicles with their accessories as well as the special force equipment and provide training to DIS employees,” Dignia said.
Therefore Dignia is seeking payment of the remainder of the contract price in the sum of USD 11 320 0000.00 or the Botswana Pula equivalent (about P123 million); interest on the above sum at the rate of 10 percent per annum reckoned from November 2017 to date payment. The whole amount for the contract was 22 640 000.00 (about P 247 million) and DIS has since paid11 320 0000.00 (about P123 million).
The company through its chief executive officer Itzhak Tzadik, DIS is indebted to his company in the sum of USD 11 320 000.00 which sum is due owing and payable to the by the defendant to the plaintiff.
“In my opinion the memorandum of appearance to defend has been delivered solely for the purpose of delay as defendants have no bonafide defence to the action,” said Tzadik.
He added that “In the premises, the plaintiff is entitled to payment by the defendants in the sum of USD 11 320 000.00 or the Botswana equivalent.”
Replying, DIS Director General Peter Magosi stated that the methodology used in respect of the transaction do not conform with provisions of the Public Procurement and Asset Disposal Board which a procuring and disposing entity. This, he said, renders the alleged contract unlawful and therefore of no force and effect.
“The amount reflected in the purported contract fall within the purview of the Procurement and Asset Disposal Board. It is submitted that for the contract to be effected it ought to have been sanctioned by the Public Procurement and Asset Disposal Board accordingly,” said Magosi.
He further argued: “The plaintiff committed to be governed by the laws of Botswana. The laws of contracting business with Government of Botswana dictate that the tender ought to have been floated stipulating clearly all the deliverables.”
According to Magosi, “The tender in this case was not floated in terms of the enabling statute. Consequently there is no need for the defendants to pay the amount claimed or any part thereof.”
The Government of Botswana also stated that the person who signed the contract (former DIS Director General Isaac Kgosi) was not authorised by the Government to sign any contract with Dignia on behalf of the Botswana Government. The state also argued that the contract was not sanctioned according to the PPADB Act. “They said contract was accordingly invalid. The tender in this case was never floated in terms of the enabling laws,” said the the Botswana Government.