State U-turns on out of court settlement agreement with Honeybee


State U-turns on out of court settlement agreement with Honeybee

By Mwaka Ndawa

HONEYBEE Pharmacy Limited has bitten the dust in its attempt to recover a dime from government for the ‘defective’ drugs, condoms and gloves which it supplied to the Ministry of Health in 2020.

The pharmaceutical company has reinstituted the matter in which it was demanding over US $17 million against the State in the Lusaka High for the 22,500 health kits it supplied, owing to failed negotiations.

Honeybee laments that efforts to recoup part of its investment proved futile as government has declined to enter into a bargain with it for reasons that its directors are facing criminal charges relating to the contract in question.

Four months ago, Honeybee discontinued the case against the State in order to have the matter resolved out of Court.

In its renewed action, Honeybee has insisted that the court compels government to pay it $4,998,375 for the 5,000 out of the 22,500 medical kits it supplied under contract No. MOH/SP/032/19-02, and in the alternative for specific performance of the same contract.

According to the statement of claim, Honeybee said in November 2019 it entered into a written agreement with the Ministry of Health for the supply of 22,500 health center kits under contract No. MOH/SP/032/19-02, which was approved by government and endorsed by Honeybee and the Ministry of Health on behalf of Zambians.

It said the contract was worth $17,958,150 for the supply of various medical kits and related products as requested by the State through the Ministry of Health.

Honeybee said between January and December 2020, it supplied the State with 5,000 medical kits out of the required number and they were all subjected to examination, inspection by the Zambia Medicines Regulatory Authority and Zambia Medicines and Medical Supplies Agency.

The company said verification and certificates of acceptance of goods under various invoices were issued and various delivery notes valued at $3,990,700 at the time of delivery.

“It was an express term of contract that payment shall be made promptly and expeditiously or shall not exceed 60 days from the date of submission of an invoice or claim by the plaintiff,” Honeybee submitted. “Despite the contract providing for part payment of the sums due, the plaintiff used their own funds to supply the kits and are now seeking full payment.”

It stated that the contract provided that any defective goods were to be returned within 10 days and notice was to be given to the supplier, but government has never returned or rejected any of the goods supplied and it is liable for full payment.

Honeybee said several reminders have been made by its lawyers Tutwa Ngulube and Company to the Ministry of Health but they have been ignored without advancing a reason for failure to pay as there was an express term of the contract which provided for interest on the delayed payment.

The pharmaceutical company said the Ministry of Health has not been available for meetings sought by it to have the matter resolved amicably, and has attempted to financially incapacitate the plaintiff as the money used to supply the medical kits was sourced from various lenders.

Honeybee explained that due to the request by government to attempt ex-curia settlement it withdrew the matter under cause number 2022/HPC/197.

“At a meeting chaired by Attorney General Mulilo Kabesha SC and co-chaired by Solicitor General Marshal Muchende SC, the parties agreed to have payment made based on the contract which would in due course be discarded due to perceived irregularities,” Honeybee stated. “On July 8, 2022 it was intimated that a temporal task team shall be assembled in order to make findings to ascertain the amount of the drugs supplied by the plaintiff so as to facilitate a payment on quantum merit. After further attempts to secure the payment by the plaintiff, the defendant did cause the Anti-Corruption Commission to arrest the plaintiff’s directors and commenced prosecution based on the same contract and facts…”

Honeybee said they wrote letters to the State requesting for payment and to inquire about the findings of the task team and the State responded, indicating that it shall not transact or settle the matter considering the criminal proceedings against its three directors.

Honeybee added that the contract between the parties is still valid and has never been terminated and all rights and obligations are still in force.


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