Technology company Valor IT has been ordered by the north Gauteng high court to pay R1,8m and two year’s worth of interest at 15,5% to technology services business Blue Turtle Technologies.
The ruling relates to the R153m tender Valor IT was awarded in 2008 for the implementation of an enterprise content management system for the Companies and Intellectual Properties Office (Cipro). Trade & industry minister Rob Davies canned the contract last year after a forensic investigation found that it was not valid.
Valor IT has been trying to get the courts to reverse the decision and declare the contract valid.
Cipro has faced growing internal and external troubles over the last few years and the forensic investigation found several discrepancies in the state-owned organisation’s internal processes, which left two employees suspended.
Blue Turtle’s court application is the latest in a string of court cases Valor has had to face.
According to Blue Turtle’s court application, Valor IT agreed to buy software from it at a cost of US$1m (about R7,1m at current exchange rates) that would then be used for the Cipro contract. Valor would then on-sell the software to Cipro for $1,4m (about R9,9m).
Blue Turtle also claims that the companies would work on a specific portion of the software implementation together. The two companies would then split the profits of the software and the service.
However, Valor IT argues that it never bought the software from Blue Turtle, and the work the company did do on the implementation for Cipro was “substandard”.
Valor also says that a formal agreement was never signed and the company cannot be asked to pay the $200 000 that Blue Turtle originally sued for. The figure was adjusted to $250 000 during the court proceedings.
However, justice RD Claassen slammed Valor IT’s defence, saying the witnesses it used gave contradictory stories to the court. Claassen says Blue Turtle managed to prove its case through the presentation of a stack of e-mail correspondence between Valor IT and Blue Turtle.
“It is obvious that the various parties were all in contact with one another on more than just a daily basis,” says Claassen.
He says the only information that was sent to Blue Turtle was the news that Valor IT had decided to proceed with the Cipro contract alone.
According to Claassen, the e-mail correspondence proves that Blue Turtle and Valor IT did enter into a contract to supply the software and service to Cipro.
“It is clear to me that the plaintiff’s [Blue Turtle’s] version, on the evidence, the probabilities and credibility, is the preferred version,” says Claassen. Valor IT will also have to pay the legal costs of Blue Turtle. — Staff reporter, TechCentral