Helicopter suppliers sue army

Published September 5, 2012

ISLAMABAD, Sept 4: Two helicopter supplying companies have gone to the court against the army blacklisting them. It seems after the politicians, the judiciary and the civil society, military’s business partners also are frowning at it.

Justice Noorul Haq N. Qureshi of the Islamabad High Court, on Tuesday ordered the Ministry of Defence, and other respondents, to reply to the petitions of the owners of Aerotron Private Ltd and Aerotron FZE (AF) by September 18, and restrained them from awarding the Bell and Sikorsky helicopters contract to any other company meanwhile.

In their identical petitions, the father and son owners of the two companies, Azhar Wali Mohammad and Mohammad Ayub Azhar, have challenged a May 26 letter of the Director General Procurement of the army informing that their companies have been permanently barred for any business interaction with the army and defence organisations due to security reasons.

Their principal, the Bell Helicopters Supply Centre in the Netherlands, was intimated the same on May 9, saying the army severed its ties with the Aerotron companies on October 14, 2011, and requesting the Centre to stop communications with the companies and their representatives, according to the petitions.

Brig (retired) Wasif Khan Niazi, a former Judge Advocate General of the army, told Dawn that the defence forces can blacklist any private contractor on receipt of intelligence reports against him. The army has an organised system for the security clearance of local, national, international or multinational companies, he said. Sometimes the procurement department gets assistance from the Military Intelligence or assigns Inter-Services Intelligence (ISI) for the same.

However, the contract of a company cannot be terminated after certain requirements given in the procurement rules had been completed and an aggrieved company can challenge any action it considers adverse to it.

Petitioners’ counsel Abdul Hafeez Pirzada told the court that the army had been dealing with Aerotron companies for procuring Bell helicopters and related equipment for about 38 years. When they were jettisoned, the petitioners served legal notice to the respondents but they did not respond, nor pointed out any illegality on the part of the petitioners.

Among the respondents cited were principal secretary to the prime minister, secretaries of the cabinet division, defence and defence production, chief of general staff, director general military intelligence, general officer commanding and director general procurement (army).

Counsel Pirzada said the reference to security concerns in the May 9 letter to the Bell Helicopters Supply Centre was ambiguous and insufficient to constitute valid reason as required by law.

Also it was written without informing or providing opportunity to Aerotron Private Ltd to show cause and being heard to rebut any alleged grounds for the purported decision of blacklisting. He argued that the executive and public functionaries cannot take any unilateral decision, or pass an adverse order without hearing the accused party.

Accordingly, he said, the act of blacklisting the companies violated the provisions of Articles 4, 9, 10, 18, 23, 24 and 25 of the Constitution.

But defence analyst Ayesha Siddiqa does not expect the litigation to end in favour of the petitioners because, she told Dawn, the term “national security” is a vital tool for army authorities. She said she never heard before a contractor going to court to challenge the termination of his contract on the basis of intelligence assessment.

She said the system needs to be reformed as a number of issues crop up in the procurement business of army. According to her the ministry of defence plays ceremonial role in procurement. In most cases the procurement department communicates directly with foreign companies, providing opportunity to the staff to seek kickbacks or other benefits from the suppliers or contractors.

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