South Africa: Supreme Court of Appeal rules in favour of Telkom
The matter between ZTE Mzansi and Telkom SA was concluded in favour of Telkom.
Telkom’s Procurement Policy and process of applying it was upheld when the Supreme Court of Appeal set aside the North Gauteng High Court’s interim interdict against the Company. The appeal was upheld with costs.
In March 2012, Telkom was interdicted from implementing the tender for Multi Services Access Node (“MSAN”) provision and concluding any service level agreement with the successful bidders. This was pending the outcome of an arbitration between Telkom and ZTE Mzansi.
Telkom Group CEO Nombulelo Moholi says: “We had no doubt that Telkom’s Procurement Policy and Procedures would not be found wanting. Telkom is pleased that the deployment of the MSAN and the rollout of the higher speed broadband project has overcome a potential obstacle and can now continue unabated.”
During July 2011, Telkom published a tender for the provision of MSANs. According to Telkom SA ZTE Mzansi had submitted a bid but was not shortlisted “because it failed to meet certain critical technical criteria during the evaluation process.”
Telkom awarded the RFP to Huawei and Alcatel-Lucent Technologies on 21 November 2011. The company says it “followed a fair, open, transparent and competitive procurement process, which was also validated by external auditors.”
During January 2012, ZTE served an application upon Telkom seeking to restrain the Company from implementing the tender in terms of an interim interdict. Telkom and Alcatel–Lucent opposed the application.
In May 2012, the North Gauteng High Court granted Telkom leave to appeal to the Supreme Court of Appeal against the interdict. The Supreme Court of Appeal held that it would be an unbusinesslike construction and absurd if Telkom was obliged to resolve disputes with multiple bidders by arbitration with varying awards before it could safely implement an award.
The MSAN units were established to deliver the long-awaited higher speed broadband and fibre to the curb and/or premises. Earlier this month the telecommunications company launched DSL of up to 20Mbps and 40Mpbs to the market.