28. Contingencies Contingent liabilities
Claim against SAHPRA for services rendered
During the 2020/21 financial year, a letter of demand for services rendered were received from a recruitment consultant claiming that full services were rendered as per the Master Services agreement signed in the 2019/20 financial year. Management has previously disputed the claim that services were rendered in full and submitted that payment made to date is consistent with services rendered. The matter is currently following an arbitration process.
The letter of demand and intention to seek relief gives rise to a possible obligation, yet to be confirmed whether there is a present obligation that could lead to the payment of services in dispute.
Although SAHPRA still requires evidence and dispute that the services were rendered the possibility of an arbitration award is not remote. The estimated potential liability amounts to R1.3 million.
On 10 June 2021, SAHPRA was served with a court application in the Pretoria High Court and other respondents relating to the registration and sale of the J&J Vaccine.
The court dismissed the application on 1 July 2021 with costs and on 22 March 2022 the applicants filed an application for leave to appeal the cost order and SAHPRA is opposing the application for leave to appeal.
The court dismissal and subsequent leave to appeal gives rise to a contingent asset, yet to be confirmed through the court hearing the leave of appeal and the appeal. SAHPRA has good prospects of success, and the estimated contingent asset amounts to R594 378.