Publication: Business Day Date: 2005-01-31 Reporter: Tim Cohen Reporter: Nicola Jenvey

Court Gives Go-ahead for R150m Arms Claim



Business Day




Tim Cohen and Nicola Jenvey

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Defence contractor jubilant as judge shoots down state plea as 'repugnant'

As one criminal case involving the arms deal resumes today, the civil case brought by defence contractor Richard Young has been given judicial sanction to proceed, with a judge dismissing the defence department's and Armscor's arguments that there was no case as "repugnant".

Round two of the fraud and corruption case against businessman Schabir Shaik reopens in the Durban High Court this morning, with the state recalling its key witness, KPMG forensic auditor Johan van der Walt.

The resumption follows the dismissal last week by Judge George Webster of the legal exceptions raised by the department, Armscor and African Defence Systems (ADS), the French-owned company that won the contract. They had argued that the pleadings did not disclose a legally valid claim and that the particulars of Young's claim were not sufficiently clear.

The judgment means that pleadings will be entered soon in Young's R150m civil claim. Young's company C²I² Systems lost out in one of the arms deal contracts to ADS.

ADS, which is part owned by Shaik, constitutes one of the links between the criminal case and the civil claim. Young, a perennial thorn in the side of government and its agencies seeking to defend the arms deal, is claiming that alleged breach of C²I²'s right to administrative justice resulted from a flawed tender process for the acquisition of armaments.

In the Shaik case, broadly the same basic facts *1 are among those being relied on by the state to found a corruption charge.

In his judgment last week, Webster came out strongly against the arguments of the defendants, saying at one point: "To say that there is no cause of action in the circumstances of the case is fundamentally repugnant.

"If the cause of action does not exist in our law, it is my considered view that this is one of those instances where common law may be in need of development," he continued.

Young, who has been waiting for the judgment for more than a year, said at the weekend he was surprised and delighted.

"This was an attempt to head me off at the pass. The judgment means we will now proceed to the battleground in the valley below."

Young is required to make some amendments to the claim, after which the defendants will be required to submit their pleading. The case will probably only come before court next year.

Meanwhile, state prosecutor Billy Downer said at the weekend that in resuming the Shaik trial this morning Van der Walt would answer several outstanding questions involving the interest calculations on the loan Shaik's legal team said he made to Deputy President Jacob Zuma.

Downer would then call colleague Gerda Ferreira to lead evidence about the searches the Scorpions conducted in Paris linking Thomson CSF, Zuma and Shaik. "A handful more" witnesses would add their pieces to the puzzle before two Scorpions investigators "round off the case".

Downer said the state and defence counsel François van Zyl had already submitted heads of argument to Judge Hillary Squires regarding the admissibility of any disputed documents.

The defence will dispute the encrypted fax that allegedly implicates Zuma in the annual bribe, as well as two documents removed from the Thomson CSF offices in Midrand. In contention are also four documents seized from the Paris headquarters and the Mauritius office.

Downer believed the defence would then move into centre stage in about a fortnight's time, ushering in the next chapter in this gripping political drama.

With acknowledgements to Tim Cohen, Nicola Jenvey and the Business Day.

*1 Plus some, plus some more.