A British medical supply agent has failed in a bid to lift an order freezing his assets, in a high court battle involving a Jordanian firm seeking $23m in damages over a PPE contract during the pandemic.
British company Uniserve, which was one of the UK’s biggest beneficiaries in gaining £877m in PPE Covid contracts, had worked with business consultant Dr Andrew Stead to source supplies.
Dr Stead worked on a contract with Jordanian firm Advanced Multi-technology for Medical Industry, known as Hitex, to supply 80 million masks between April and July 2020, during the early months of Covid-19.
The agreement has led to a court battle, after delays in delivery led to Uniserve seeking a different supplier.
This led Hitex to accuse Uniserve of breaching its contract and Uniserve accusing Dr Stead and his company Maxitrac of failing to carry out their obligations.
Uniserve has brought proceedings against Dr Stead and Maxitrac on the grounds they are liable for damages.
A freezing order on Dr Stead's assets was imposed last year and he was given until January 2023 to apply to vary it.
At a hearing this week, Deputy Judge Richard Farnhill rejected the subsequent application.
“I do accept, of course, that the applicants should be given the opportunity to have their say. That is precisely what Judge Meade did by allowing them to make an application to vary or discharge without showing a change in circumstance until 30 January 2023,” Dep Judge Farnhill said.
“Accordingly, I would, in any event, have refused this application on the ground that the applicants were seriously out of time, something for which they had no good justification.”
A trial at London's High Court is due to take place between all the parties at a later date.
The court heard Uniserve had entered into a contract with Dr Stead in March 2020, to act as Uniserve's agent in dealing with potential suppliers of PPE.
Between April 25, 2020 and August 28, 2020, Uniserve paid Maxitrac £42,510,000 ($53.6 million), the court heard.
On April 21, 2020, Uniserve entered into the supply contract with Hitex for the supply of 80 million disposable face masks.
The supply contract provided for the first six million units to have been ready in a single batch by April 28, 2020.
But due to delays the first units were not delivered for inspection until May 12, 2020 and by May 20, 2020, only one million units had been shipped to the UK.
This led Uniserve to look for a different supplier and it admits in court documents that it ceased to collect any PPE from Hitex after June 17, 2020.
“Uniserve's management were unhappy with the delays and had identified an alternative supplier,” London’s High Court heard.
“From 5 June 2020, Uniserve was seeking approval from DHSC [Department of Health and Social Care] to source face masks from BYD Auto Industry Company Ltd (BYD) as a substitute for Hitex.
On 7 June 2020, Uniserve signed a supply agreement with BYD for 60 million surgical face masks.
Hitex is now taking Uniserve to court, claiming it is in breach of their contract and failed to receive and pay for some masks.
Uniserve says that Hitex failed to meet its contractual obligations and that it terminated the contract. It has also taken legal action against its agent.
“Uniserve's argument is that if Maxitrac had performed its obligations, either the Hitex would have delivered on time or Uniserve would have known Hitex would not deliver on time and could have made appropriate arrangements,” Dep Judge Farnhill said.