Supreme Court of Appeal delivers significant judgment on public procurement law

Supreme Court of Appeal delivers significant judgment on public procurement law

Podcast

Supreme Court of Appeal delivers significant judgment on public procurement law

Podcast

00:00 00:00

Download MP3

Charles explains that our courts do not take lightly when government seeks to review unlawful contracts as a basis to not pay Contractors who have provided their goods and services innocently. Our courts now recognise that an innocent party or contractor may be paid for goods and services delivered despite the contract being concluded unlawfully.

In a recent case, Charles says that a service provider was awarded a contract, completed the work, and invoiced the government. However, the government refused to pay, citing that the contract was concluded unlawfully due to the government having accepted a bid which exceeded their financial budget. As a result, the contractor was at risk of not being paid for their services. The court reviewed and set-aside the contract on the basis that the contract exceeded their financial budget but recognised that the unlawful conclusion of the contract was not due to the contractor. Accordingly, it made an order that given the circumstances it is just and equitable that they be paid for their services.

Charles adds that the Constitutional Court and the Supreme Court have reaffirmed that when a service provider is entirely innocent and unaware that a contract was unlawfully concluded, it is just and equitable for them to be paid, given that the goods and services were indeed delivered. This contrasts with example cases of state capture, where service providers were directly involved in the conclusion of unlawful contracts—such parties will not receive legal protection from our courts. However, if a contractor is innocent, the courts will provide a just and equitable remedy.

Click here to listen to the interview.