High Court has upheld the Civil Courts ruling against the prosecution regarding the joint venture tenders submitted by SJ Trade Private Limited and SJ Construction being wrongfully voided and due to that, the right to file for compensation is valid if damages were incurred.
As the prosecution appealed the Civil Court's rulings from 2022 and 2023, three judges from the High Court ruled on a majority on 15th June that there is no reason for the lower courts sentences to be voided. The three judges from the High Court were Judge Mohamed Shaneez Abdulla, Judge Dheebanaz Fahmy and Judge Abdul Maniu Hussain.
The initial issue
The Ministry of Finance and Planning announced they were seeking a company to work on housing units at three islands:
- HDh. Nolhivaranfushi: 100 housing units.
- HDh. Hanimaadhoo: 100 housing units.
- Th. Vilufushi: To develop 64 housing units, and to design and build the 36 housings that were to be newly built.
The National Tender Board disqualified the joint venture tenders submitted by SJ due to them not meeting the employers requirements and the BOQ.
Independent Review Committee's decision and the Civil Court's sentence
As SJ appealed the disqualification, the Independent Review Committee (IRC) decided that:
- SJ's tender documents that were submitted meet the requirements and they were to be accepted.
- The Credit Facility document given by the Bank of Ceylon (even if it was done before the company's name change in 2017) is a document that clearly states how the company's name was changed.
- And so, the IRC informed the National Tender Board (NTB) that the tenders were wrongfully voided and the tenders be re-evaluated.
Nevertheless, the NTB did not comply and attempted to hand over the work to another company, which led to SJ filing a case at the Civil Court. The Civil Court determined that the prosecution had violated finance regulations, and ruled the tenders be re-evaluated within 20 days, and that where the remedies may not be provided for, made available for any reason, SJ reserves the right sue for liquidated damages under the contract.
The prosecution's appeal points, the High Court's response
At the High Court, the prosecution mainly made their case stating that the NTB is to comply with the IRC's decisions in accordance with the tender document. The prosecution also said that as the Hanimaadhoo project has been awarded to a third company and the agreement has been signed, enforcing the Civil Court's ruling would be difficult.
While taking these points into account, the High Court ruled that:
- The committee's decision cannot be changed: The NTB does not have the power to change decisions made by the IRC, which was created under the Public Finance Act and regulations. The committee's decision is final when it comes to tenders.
- Awarding the project to a third company is not an excuse: When being charged, stating that "the project has been awarded to another company" does not excuse them from the court's remedy, and that the prosecution was unable to provide the details regarding project progression and expenses.
- No violation to the Constitution: As the Civil Court ruled that right to compensation was evident based on certain interests in the case that needed to be protected, it does not violate Article 143 (d).
With this ruling, the NTB is to comply with the IRC's decisions and that the decisions are legally binding on the NTB.
