SA’s leading courier firm, RAM Hand-to-Hand Couriers, has taken on German multinational logistics group DHL over the termination of a contract to deliver pharmaceutical products around the country.
DHL has several contracts with healthcare companies to distribute products, with the largest of these being Netcare. The private hospital group requires products to be distributed to its hospitals across SA.
RAM has a vast network in the country, and the parties in 2018 entered into an agreement that would see the former distribute the goods on behalf of DHL.
RAM said the two-year contract was terminated after just six months and it is now demanding that DHL pay nearly R40m over the cancellation.
The hurdles before RAM to succeed in its lawsuit include the need to prove that the contract was for two years, that it was exclusive and that it could only be terminated for breach.
RAM stumbled at the first hurdle after the high court in Johannesburg in December said it had failed to prove that the duration of the contract was for 24 months as it alleged, a decision that RAM has now taken on appeal.
The high court was swayed by DHL’s argument that while it worked with RAM for six months, the terms of a long-term agreement were never agreed to.
The court on Friday found that a different court might arrive at a different conclusion, with RAM’s leave to appeal set to be heard by the court’s full bench.
“The plaintiff [RAM] argues that his views of the contract were subjective not objective, and I erred in having regard to them. Whilst I do not agree with this view, I accept that these two issues are of sufficient probative value, that another court might consider the issues differently,” judge Norman Manoim said.
Part of RAM’s argument is that it spent millions of rand in preparations for the contract it said it had with DHL. Most of the expenditure went to making sure its vehicles met the standards required by DHL’s clients. This was because before RAM and DHL contemplated a partnership, RAM was only distributing pharmaceuticals, and not warehousing them.
RAM said it was then forced to purchase temperature-controlled vehicles that comply with the regulations, spending millions of rand in the process.
One of the matters that led to the dispute between RAM and DHL was the latter’s conviction that any increase in what it paid for distribution to the former cut into the margin it earned from its clients.
Since RAM did not have a contract with any of the DHL’s clients, the challenge for DHL was to ensure that it passed on its service obligations to RAM. But DHL also wanted to reduce the amount it paid for outsourcing the third-party distribution.
The more it paid out, the more it cut into its own margins. But if the third party had to meet the stringent distribution requirements passed on by DHL from the principals, its own costs would increase, and hence it would seek to recover these in terms of the rates it charged DHL.
RAM was also recently granted leave to appeal against a high court decision that found the SA Police Services was within its rights to demand that its employees attain competence certificates before they transport firearms and ammunition.
RAM, supported by the SA Arms and Ammunition Dealers Association (SAADA), said the requirement by the police that its nearly 3,000 workforce should be in possession of and have been granted a competence certificate to transport was impeding its business. RAM and SAADA, a lobby group that represents firearms dealers, importers, manufacturers and gunsmiths, said the regulations do not require such.
The parties a year ago unsuccessfully sought an order that firearm dealers and firearm transporters may transport firearms and ammunition with other non-controlled items in the same vehicle as per their understanding of sections of the Firearms Control Act.
RAM, founded by Nathan Lazarus in 1988, argued that if there was a requirement for a competence certificate for couriers, its workforce would not be able to obtain such competence certificates “overnight” to transport arms.
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