Menzies Suffers Yet Another Devastating Defeat in Court

Staff Reporter

Menzies Aviation suffered yet another significant blow in the Namibian High Court, after Judge Eileen Rakow last Tuesday dismissed, with costs, an application by the British-owned company that sought to interdict and declare null and void the agreement entered into between the Namibia Airports Company (NAC) and Paragon Investment Holdings (Pty) joint venture with Ethiopian Airlines, for the provision of ground handling services at the Hosea Kutako International Airport (HKIA).

The costs include the costs of one instructing and two instructed counsel for in favour of the first respondent, i.e., NAC and the costs of two legal practitioners in the case of the second respondent which is Paragon Investments.

Menzies Aviation’s recent application in the High Court was yet another unsuccessful attempt by the company to cling on to the contract to provide ground handling services at HKIA. This is despite the company having participated and lost the opportunity through an open and public bidding process.

In January 2014, the NAC and Menzies concluded a ground handling services agreement for five years, from 1 January 2014 to 31 December 2018. The agreement was subsequently extended on 1 January 2019 to 31 December 2021. On 1 January 2022, the NAC and Menzies Aviation agreed to an extension by means of an addendum for a period of six months, with an end date of 30 June 2022.

The extension was necessitated by the review application which Menzies filed at the Review Panel in terms of the Public Procurement Act, 15 of 2015, which was eventually dismissed by the Review Panel in favour of NAC and Paragon Investments.

In addition, the addendum provided for a one-month cancellation notice period. That agreement came to an end on 30 June 2022, but Menzies refused to vacate the premises at the HKIA.

In June 2022 the NAC successfully filed an urgent application in the Windhoek High Court seeking a court order that would oblige the British-owned company to halt operations and vacate the HKIA.

The premise of the NAC’s application was that Menzies Aviation’s contract to provide ground handling services at HKIA expired on 30 June 2022 and that Paragon Investments was supposed to take over these services on 1 July 2022.The High Court ruled in the NAC’s favour.

In his judgment, Judge Orben Sibeya found that the appointment of Paragon to take over the ground handling services by 1 July 2022 was lawful and considering that Paragon was notified and prepared to commence to render ground handling services, all stakeholders were informed of the new ground handler, Paragon, by 22 April 2022.

Therefore, the NAC had the responsibility to ensure that Paragon commenced rendering the ground handling services by 1 July 2022 free from any encumbrance.

Judge Sibeya found that the NAC became aware on 23 May 2022 that Menzies Aviation will not vacate HKIA, as such the NAC opted not to sleep on its rights by waiting until 30 June 2022.

The judge further stated that Menzies Aviation knew already by February 2022 or latest March 2022 that the NAC entered into an agreement with Paragon Investments for the provision of ground-handling services at the airport.

He also pointed out that Menzies failed to seek interdictory relief against the NAC when it launched its review application in April 2022.

Menzies Aviation claimed a full six months later that they would seek interdictory relief to halt implementation of the award of the aforesaid tender pending the outcome of the main application.

Menzies never explained why it waited that long to bring its interdict before the High Court.

The most important consideration which arose in Menzies’s application was that Menzies failed to explain why it could not in April 2022 apply to interdict the implementation of the award of the said tender as its review application before a review panel was already dismissed in early January 2022.

The Judge contended that Menzies should have interdicted the NAC in early February 2022 from concluding the contract with Paragon Investments, yet they failed to do so.

The Judge further argued that the relief sought by Menzies Aviation in its notice of motion in the appeal application is almost identical to the relief sought in its urgent counterapplication, which was struck from the roll, and was now awaiting appeal in the Supreme Court.

The Menzies Aviation founding affidavit contained portions directly lifted from the founding and supplementary affidavits they filed in the pending review.

More importantly, while the appeal is pending Menzies Aviation would continue to render the ground handling services, so there was no new agreement that came into force.

The High Court found that NAC could in any event not enter into a new agreement with Menzies Aviation, as alleged by the latter, without complying with the terms of the Public Procurement Act, Judge Sibiya asserted.

The High Court ultimately found that Menzies Aviation did not meet the requisites to be granted an interim interdict as the NAC has an existing valid and lawful agreement with Paragon Investments.

The British-owned company has been providing ground handling services at the airport for the past nine years and is still doing so despite the court order to vacate its position.

Simultaneously, Menzies Aviation had also applied to be granted the right to supplement its papers, which application was granted without cost to the respondents. The High Court indicated that the Respondents will also be afforded an opportunity to reply to Menzies’ allegations in the supplemented papers that Menzies Aviation May file.

The application brought by Menzies Aviation, appealing its eviction as ordered by Judge Sibeya on 29 June 2022 was heard by the Supreme Court of Namibia on the 19th of April 2023 and judgement in that regard is imminent.

Ground handling is a specialized service, ranging from passenger, baggage and cargo handling provided to passenger airlines that call at the HKIA.

During its tenure at HKIA, Menzies Aviation has been plagued with some operational challenges such as reports of high-value items like mobile phones being stolen from the cargo terminal and long delays at the baggage collection conveyor belts.

In another reported incident a baggage trolley was seen going astray on the airport runway of Namibia’s international airport, which posed a major safety risk to passenger airlines at the airport.

It was further discovered that Menzies Aviation claimed to have suffered major financial losses.

In 2020, Menzies Aviation’s annual financial statements recorded accumulated losses of N$13 106 720 and that its total liabilities exceeded its assets by N$13 106 620.

The company has provided no evidentiary response apart from the bare minimum claim that “Menzies Aviation is not under any financial strain”.

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