Court orders HSE to pay Wicklow firm almost €3m for breach of covid ventilators contract
The HSE has been ordered to pay a medical devices company just under €3m for a breach of contract regarding the procurement of ventilators at the beginning of the covid-19 pandemic.
Narooma Ltd, the Wicklow-based firm in question, had initially sued the HSE in the High Court in April 2020 after the health service failed to make payment for 350 ventilators it had agreed to purchase at the onset of the pandemic.
The original deal for the machines – which were in high demand for covid-hit patients – had been worth €7.5m.
In addition to the compensatory payment, believed to be close to €3m and representing the profits lost as a result of the scuppered deal, it's understood that the arbitrator ruling upon the case also directed that the HSE be held liable for all legal costs resulting from the action.
Those costs will likely amount to an additional €3m resulting from the five-year arbitration – leaving the HSE facing a bill of close to €6m as a result of the case.
Narooma was contacted for comment but did not respond.
The company also has an outstanding High Court action against the IDA resulting from the same events, its claim being that the inward investment agency allegedly advised the HSE to back out of the initial deal, leading directly to the breach of contract.
A spokesperson for the HSE did not directly address the Narooma settlement, but said regarding other monies which it has failed to recoup on foot of failed ventilator transactions with multiple companies that: 'The HSE continues the process of taking the necessary steps to recoup outstanding amounts where appropriate and possible to do so.'
The Wicklow company's case contrasted markedly with that of other companies which entered into deals with the HSE to provide ventilators from China at the start of the pandemic.
One company, Roqu – previously known for organising music festivals in the Middle East – received €14.1m from the HSE for 328 ventilators – only 72 of which were ever received, none of which were ever used as they failed to pass quality standards.
Case background
The initial agreement between the HSE and Narooma would have seen the 350 ventilators shipped to Ireland via the Far East in April and May, 2020.
When the HSE informed the company that it would not be following through with the purchase that April, Narooma brought the case to the High Court.
It claimed the HSE had been required under the contract entered into on March 27, 2020, to pay for the ventilators three days later on March 30, but had failed to do so, saying belatedly that it wished to conduct due diligence on the company.
At the High Court, the HSE argued that the case should be referred for arbitration per the contract between the two, an argument acceded to by Judge David Barniville in June 2020.
The case had been mired in arbitration for five years until the recent decision in favour of Narooma.
Defamation
Narooma also stated in court its intention to expand its claims against the HSE to include defamation, after the body complained about the company to An Garda Siochána – a complaint which directly led to the gardaí reporting to the Policing Authority that its economic crime bureau, in conjunction with Interpol, had intervened in an attempt to return the €7.5m to the HSE – despite the monies never having been paid in the first place – and had commenced a criminal investigation into the matter.
The gardaí subsequently moved to correct the record, posting a notice in the Irish Times noting that the information it had reported to the authority was 'incorrect', and that no money had ever been paid to Narooma by the HSE.
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