By Wahome Thuku
Surgilinks Limited is a Kenyan distributor of medical supplies. Since March 2009, it had been in business with an international pharmaceuticals firm, Adcock Ingram East Africa, to distribute their products in Kenya until early 2012 when things went haywire.
A dispute arose over the payments of Sh87.8 million to Adcock Ingram East Africa by Surgilinks. Adcock took the matter to the High Court in Nairobi saying Surgilinks had failed to pay for supplies, some dating back to July 2010. In the meantime, they decided to remove their products from the premises of Surgilinks.
Surgilinks filed an application for injunction to stop the company from removing its stock. They disputed the Sh87.8 million claim but admitted that the outstanding amount due and payable to Adcock Ingram East Africa was about Sh65 million.
But underneath the payments dispute was another set of issues. Surgilinks claimed Adcock Ingram East Africa was taking away the stock worth Sh22 million as a hit back because they ( Surgilinks) had decided not to renew the agreement, which was to expire on February 29, 2012. Apparently, Surgilinks had hit a jackpot by winning a tender to supply drugs to the Government worth Sh427 million.
In their response to the application, Adcock Ingram accused Surgilinks of having bribed their way to win the Government contract.
Adcock Ingram East Africa’s regional manager Anthony Kenyatta had even written to the Kenya Medical Supplies Agency on February 22, complaining that there were irregularities in awarding the tender to Surgilinks. The letter was produced in court.
Mr Kenyatta claimed they had reasons to believe that Surgilinks had engaged in bid-rigging and had bribed to influence the outcome of the procurement process in their favour.
Justice Daniel Musinga of the High Court declined to issue that injunction because Surgilinks was indebted to Adcock Ingram East Africa as admitted. He held that a party seeking equity relief had to approach the court with clean hands.
Musinga, however, ruled that the bribery allegation, which was a very serious charge, would be dealt with when determining the main suit. That left Adcock Ingram East Africa free to take away their stock.
On May 3, 2012, Surgilinks filed another application, this time seeking an order that the court proceedings be suspended and the matter referred to an arbitrator as provided under Section Six of the Arbitration Act, 1995 and rule two of the Arbitration Rules, 1997.