… to defend magazine case
Air Namibia has appointed Gupta Advocate Rafik Bhana to represent them in an arbitration matter over the publication of the on-flight magazine ‘Flamingo’, The Patriot has learned.
According to the online news network www.iol.co.za, Bhana represented Atul Kumar Gupta and six other applicants including the Indian state-owned Bank of Baroda, where they sought the removal of the preservation orders that were slapped on them by the Free State High Court after an application by the Asset Forfeiture Unit.
The preservation orders included a freeze on R10 million [N$10 million].
Bhana, The Patriot sources said, is coming at a cost of N$54,000 a day and is accompanied by a junior advocate who is being paid two thirds of his fee which equates to N$36,000.
The national airliner is in arbitration over a disagreement with small market enterprise, Media Nova CC over the extension of the contract to continue publishing the magazine.
While The Patriot has it that the arbitration has been going on for over 16 days so far, Air Namibia yesterday said that the arbitration took place during the periods 29-31 October and 1-5 December last year, and is expected to continue in February this year.
To date, The Patriot has learnt that the technically insolvent airline has spent around N$200,000 a day, totalling an estimated N$6 million on legal fees inclusive of consultation fees.
This is excluding the arbitration process set to continue in February.
Apart from the daily legal fees, Bhana and his junior advocate fly to Namibia in business class every time they are needed in Namibia. A significant bill is also incurred for accommodation at the Hilton hotel.
A source, The Patriot spoke to said that it is strange for Air Namibia to spend millions on defending this matter.
The source explained that even if Air Namibia wins the legal action against Media Nova, the financially struggling parastatal still risks writing off between N$3 million and N$4 million in legal fees.
Air Namibia spokesperson Twakulilwa Kayofa did not want to confirm or state how much money the parastatal is spending on legal fees saying “legal fees associated with airline operations remain internal and cannot be shared with the public at large.”
When asked why the airline is making use of South African legal counsel, Kayofa said that it is not uncommon to use South African counsel to handle Namibian matters and that it is an everyday occurrence within the Namibian legal context.
He further said that “the complexity of the matter necessitated the instruction” as the matter deals with “extremely difficult legal prescripts like authority to enter into agreements, Tranquand Rule [to do with complying with company rules], estoppel and collusion.”
Documents seen by The Patriot show that Air Namibia and Media Nova went into arbitration after the two parties could not agree on whether or not there was a legal extension on a contract for the on-flight publication. At issue appears to be the mandate granted to former Air Namibia Chief Operations Officer Rene Gsponer who was appointed Chief Operations Officer (COO) of Air Namibia in 2014.
Media Nova argued that since Gsponer in his capacity as COO was an accountable manager, he had the authority to extend the contract.
Senior Manager for Legal services at the airline, Jerhome Tjizo, in a witness statement however said that the extension of the agreement cannot be considered as valid or binding as it was not decided upon by the executive committee [EXCO].
Air Namibia called for the arbitration after Media Nova claimed that their contract to publish the in-flight publication had successfully been extended for another five years after having awarded the tender during 2013 for a three year term.
In contrast, Tjizo throughout his witness maintained that Exco is the authoritative body to decide on the extension of the contract and since this was not discussed at that level, no valid extended contract can exist.
Using the airline’s management manual, Media Nova argued that Exco is an advisory body rather than a decision-making body and the individual who extended the contract Rene Gsponer, was authorised to do so.
Air Namibia yesterday told The Patriot that the contract with Media Nova was to come to an end on 1 July 2016 and that they gave the entity notice on 1 April 2016 that the contract is ending.
It seems that the in-flight publication has been at the centre of interest not only for private entities, but also for Air Namibia employees.
The Patriot has in its possession a recording of a telephone conversation, where the head of communication at the airline, is being implicated in having a vested interest in Media Nova not having their contract renewed.
In the telephone conversation someone allegedly close to Nakawa had a conversation with a third party who categorically stated that they want Media Nova out, so that Nakawa can benefit from the publishing contract through his aunt.
When asked about the allegations of his interests Nakawa told this reporter that “the subject matter you are questioning me on is sub judice because it’s currently before court.” He further said that Air Namibia has clear procurement guidelines that needs to be followed before any goods or services can be procured. “These guidelines are also in line with the national procurement standards” Nakawa added.
Air Namibia will pronounce itself on this matter once the court case is finalised next month.
Public Enterprises Minister Leon Jooste told The Patriot that he would bring the matter to the Board’s attention.
Jooste said that they have been “looking into the recurring issue of large spending on legal advice and litigation at public enterprises.” The minister said that his impression is that many of these cases could have been prevented through proper stakeholder management and dialogue.
“In this particular case, we have appointed a brilliant new Board in December and I will duly bring the matter to the attention of the Chairperson for consideration”.