Tuesday, April 20, 2021

Ithuba Botswana loses bid to interdict Lotto license award process

The reserve applicant in the Botswana Gambling Authority’s bid to award the country’s first ever Lottery license have lost in their urgent application to interdict the Authority from awarding license pending a review application. Ithuba Botswana had challenged the Botswana Gambling Authority’s decision to select Grow Mine Africa as the ‘Preferred Applicant’ for the multi-billion Pula lottery tender.

A successful bidder is considered a ‘Preferred Candidate’ pending finalization of license negotiations with the Gambling Authority before becoming a ‘Successful Applicant’. Grow Mine remain the ‘Preferred Candidate’ pending negotiations. The company filed a notice to challenge the awarding of the tender at the Gaborone High Court in late 2020.They wanted the Court to review and set aside the Gambling Authority’s decision following the June 2020 announcement of Grow Mine Africa as the ‘Preferred Candidate’.

Ithuba Botswana outlined various pieces of legislation which they said were flouted in the process of determining the eventual winner. The company cited among others the Gambling Act and Regulations, as well as Public Procurement and Asset Disposal Act (PPADA) and Regulations guiding the awarding of such tenders. The Gambling Act, the company argued, stipulates the steps and time periods to be followed in the grant of a lottery license. The provisions, they said, make it clear that the award of a lottery license is a public process, requiring extensive engagement with the public, and it confers rights on the public to object to applications and have those objections ventilated. “In terms of section 34(2) of the Gambling Act, read with Gambling Reg 67, the applicants for a license are required to publish their applications in two consecutive issues of the Gazette (or stipulated newspaper), affording the public 30 days from the last publication, in order to object to the applications.”

Ithuba Botswana argued that the entire process in relation to public participation in the tendering process was entirely dispensed with. That there was no publication of the applications, no public investigation, and no public hearings where the Gambling Authority could entertain objections to the applications. The company said the decision to declare Grow Mine the Preferred Candidate was as a result liable to be set aside on the basis that it was illegal, irrational and was taken pursuant to a procedurally improper process. In their submissions the Respondents (Gambling Authority and Grow Mine Africa) however submitted that the award of the National Lottery license does not amount to procurement in terms of the PPADA and thus it is not regulated by that Act and its regulations. They said the Gambling Authority had fully complied with the Gambling Act and its Regulations.

“The Authority was not obliged to follow a public notice and comment procedure nor to hold public hearings in terms of regulations 66, 67, and 68.” They also argued Ithuba Botswana had several prior opportunities to express their dissatisfaction before taking the matter to court, such as an appeal to the Minister in terms of Section 48 (1) of the Gambling Act. The Respondents also said that the balance of convenience does not support an interim interdict arguing that the Court of Appeal has on several occasions recognized that in such proceedings the purely financial interest of a disappointed bidder needs to be weighed against the public interest that is harmed by halting a public process such as the awarding of a lottery license. The Respondents had also raised preliminary points saying both the urgent and the review application were premature because the selection of Grow Mine as a Preferred Applicant is not a decision that is ready to be reviewed because the finalization of the process to award the license to the company had not been finalized. They also submitted that Ithuba had failed to invoke the arbitration process as is contractually obliged. They submitted that there was no genuine urgency as Ithuba could still seek substantial redress in due course from the Minister or subsequent judicial review proceedings following the final award or an action for delictual damages.

In his ruling Justice Omphemetse Motumise said in relation to Ithuba Botswana’s argument that the process of determining the eventual winner was flawed the company had had every opportunity to intervene, rectify and ensure the integrity of National Lottery process which it claims it has come to Court to protect remained pure and unsullied by irregularities. “Yet Ithuba set back and kept quiet. It continued to participate in the tender until it was selected as the Reserve Candidate. Only then does it suddenly realise that the whole process was a sham and void from the very beginning.”

He said the company kept quiet because they believed they were still in with a good chance of being eventual winners. He also said Ithuba could have brought their interdict and review applications earlier or simultaneously but failed to do so.Justice Motumise said despite being allocated a Judge to hear the matter during the Court Vacation Ithuba proceeded to remove the application from the Judge and relinquish the right to have the matter heard urgently. “The exigencies of a genuinely urgent matter, and of an impending irreparable harm will not allow a litigant to go on a leisurely or prolonged search for information and assurances in order to build an urgent case.” He said the Applicant had also failed to demonstrate that they will not obtain substantial redress in due course. He said the company also enjoyed the right to appeal to the Minister.

“For those reasons, urgency has not been shown as required by Order 12 Rule 12. The application is not urgent and is liable to be struck off the roll with costs,” the judge ruled.“ The application is not urgent. It is immature since no final decision to award the license has been taken by the Authority. Ithuba has also failed to establish any clear or prima facie right or the other requisites of an interim interdict.” Motumise dismissed the application with costs.

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