Cont'd

4. DAMAGES CLAIM FOR BREACH OF CONTRACT

4.1 The nature of the claim made by the Applicant under this particular head would
seem to relate principally to the consequences of a refusal by the Respondent to accept that the Applicant has fulfilled its contractual obligations. The Applicant contended that this refusal, coupled with the wrongful assertion of ownership over the intellectual property comprising the website, had resulted in lost opportunities to obtain licensing revenues, and especially those from the Namibian government. [See outline final submissions on behalf of the Applicant: 2]

4.2 The question of liability under this head rests in essence upon whether the Respondent is correct in contending that the Applicant failed to fulfill its contractual obligations. To answer this question consideration must be given to the evidence before the Tribunal and in particular to a series of reports that were produced at different stages of the project.

4.3 The first written assertion by the Respondent of any contractual failures on the part of the Applicant would appear to be contained in a letter written on 26 April 2002 by Mr Ram Venuprasad to Ms Jananayagam. The letter stated

"You have asked that I write to you about the Namibia project before we meet, hence this letter.

I hope you agree that the terms outlined in your contract of consultancy with the Secretariat are clear about your role in the project. Our reckoning is that Items 3, 5 and 8 in the terms of reference remain incomplete. I need your advice on when we might expect these to completed. I note that we have paid four of the five instalments of fees that were agreed under the contract,

I must clarify that the COMBINETGPS domain name and logo are the properties of the Commonwealth Secretariat. The Secretariat does not lend its name and style for commercial purposes. Therefore the Asset Management Shop is not permitted use of the domain name and logo outside of the terms of reference outlined in the consultancy contract.

Do please let us meet soon so that we can resolve the outstanding issues. I look forward to your response." [2:619]

4.4 The evidence before the Tribunal indicated that prior to writing the letter of 26th April 2002, Mr Venuprasad had been seeking to arrange a meeting with Ms Jananayagam to discuss a range of issues associated with the project, including those outlined in the letter. According to Mr Venuprasad, Ms Jananayagam had been uncooperative and had imposed preconditions for any meeting, which included the presence of Mr Rao. [see B:74]

4.5 Ms Jananayagam disputed these contentions, and also rejected the Applicant's alleged failure to complete the terms of the contract period. This rejection was contained in a letter from Ms Jananayagam to Venuprasad dated 26 April 2002. The response stated, in part, the following:

"You state in your fax: "Our reckoning is that items 3, 5 and 8 in the terms of reference remain incomplete". I am sure you are mistaken. Your statement is of grave concern given that it is damaging to our professional reputation.

As you are aware our consultancy as per the terms of reference ended in December 2001. It is now the end of April 2002 (please see attached contract and the modus operandi document of 7 May 2001, relevant sections highlighted).
As you are also aware, our contact on this project during its 6 month term was Mr Rao. We did not receive any correspondence from him during the consultancy indicating these items were outstanding. It is therefore highly surprising that this statement is made today, five months after the end of the consultancy and by a person other than the project manager at the time. Can you please state the source and basis of your statement?

The consultancy term, which began in June 2001, was for a period of 16 man weeks the bulk of which were completed by September 2001 (a team of 6 staff were involved in the implementation of the prototype). The full elapsed period of 6 months stated on page 1 of the contract expired in December 2001. You will see from page 2 (item 7) of the contract that the consultancy period can only be extended by written agreement by the Commonwealth Secretariat. We have not received any request for extension, written or otherwise, from the Import and Export Division of the Commonwealth Secretariat and I understand that this is since all parties agreed that the contract had been implemented in full during the 6-month period.

In any event I have responded below to your unfortunate allegations of incomplete
implementation: '

Item 3 refers to an add-on feature currently present on the website. The website was completed, approved and demonstrated in September 2001. The invoice for this segment of the work has been paid. Why have you waited till April 2002 to raise this query?

Item 5 was addressed in our workshop presentations, again in September 2001. A written report was neither specified in the terms of reference nor requested at any point.

Item 8 (final report) was submitted on the 12th December 2001. Revised on the 7th January to incorporate the amendments suggested by the Commonwealth Secretariat's representative, even though our obligations under our consultancy had ended by that date." [See 2:623-625 at 624]

4.6 In 'his oral testimony Mr Venuprasad denied having received copy of this
correspondence. He also indicated that he had sought to obtain an email version of the letter but this too had not been transmitted successfully.

4.7 On 29 April 2002, Ms Jananayagam sent a further email to Mr Venuprasad in which she stated that she had

"just confirmed verbally with the project manager of the COMBINETGPS project that there are no outstanding items with respect to our contract of 30th June 2001.

As stated previously, the comments in your fax dated 26th April, to the effect that our firm has not completed its obligations are damaging to our professional reputation.

Will you please, in view of the facts, retract your statement and honour all invoices as a matter of urgency." [See 2:626]

4.8 The project manager to whom Ms Jananayagam was referring in her email was Mr Rao. It was noted earlier in this Decision that Mr Rao had retained the role as project manager, even though he had transferred to another Division within the Commonwealth Secretariat. However, from October 2001 onwards, there seems to have been some uncertainty within the Commonwealth Secretariat about the respective responsibilities of Mr Rao and Mr Venuprasad in relation to the project.

4.9 Mr Venuprasad joined the Respondent as a temporary Programme Officer with the EIDD, as it was then known, on 1 November 2001. Mr Venuprasad's job description was said to include all the duties and the projects that were undertaken by the former Chief Programme Officer in EIDD, Mr Ravi Rao. The Director of EIDD at that time was Mr Richard Gold. The Division subsequently became known as the Special Advisory Services Division (SASD). One of the projects that Mr Venuprasad said that he had been tasked with was the Namibia project, the overall objectives of which were to establish an effective procurement mechanism for small and medium enterprises in Namibia. [B:72]

4.10 Mr Venuprasad further stated that prior to his appointment, a meeting had been held in Mr Gold's office during October 2001 at which Mr Rao had been informed of Mr Venuprasad's pending new role in EIDD. Mr Rao was also asked at that meeting to hand over the files and all relevant documentation relating to projects that he had handled while at EIDD [see B: 72].

4.11 Despite this purported change in management responsibilities Mr Rao continued to act in the capacity of project manager and engaged in a series of meetings both with the Applicant and with representatives of the Namibian government who visited London between 12 and 14 November 2001. Mr Rao stated that the purpose of the visit was to discuss the draft final report on the project as well as the modalities of implementation of a second phase of the project with Sumukan. Mr Rao said that Mr Venuprasad had been present at one of the meetings with the Namibian officials. While Mr Venuprasad had recently joined the EIDD, Mr Rao said that he still viewed him as a consultant [see B:51]. Mr Rao further stated that the Namibian government officials were very eager to receive a copy of the final report on the project from the Respondent.

4.12 According to the Applicant's evidence it was agreed with Mr Rao that once the Namibian visit was over the only item left to complete was the final report. The Applicant's section of this report was submitted by email on 12 December 2001. [1: 278¬290]. Following some further minor modifications a final version of the Applicant's report was provided to Mr Rao on about 7 January 2002 [see 1 :299.03-299.15 and 307.01¬307.14]. Ms Jananayagam indicated that the Respondent accepted this report as being satisfactory and it was incorporated by Mr Rao, with minor changes, into a draft report to the Government of Namibia that was compiled in February 2002 [1 :316-518].

4.13 Ms Jananayagam said that she confirmed verbally with Mr Rao that the Applicant was now in a position to submit their final invoice. This was forwarded on 9 January 2002. A sum of £3,000 was due in payment of the final invoice and an advance had also been provided of £1,500 for travel expenses. Ms Jananayagam said that Mr Rao agreed that the consultancy assignment was complete for the submission of the final invoice on 9 January 2002, and that this would constitute the termination date of the consultancy agreement [see in general B:24].

4.14 Following this series of events Mr Rao eventually submitted a draft of the project's final report to the Government of Namibia in early Feburary. Chapter 6 of this report, titled COMBINETGPS, contained virtually verbatim the material that had been supplied earlier by the Applicant as its contribution to this report. [see 1 :389-408] The chapter, advancing a rationale for an E market place approach, also contained an action plan and costings for a set up phase of a new project which followed proposals already discussed in preceding months by the Applicant with Namibian government officials. According to the Applicant this was in keeping with an original understanding they had when undertaking the project that the technology solution that they had developed would be recommended to the Namibian and other governments. [B: 26 at paragraph 122]

4.15 A variety of feedback was received in regard to the draft report which, in addition to being sent to the Namibian government, was also provided to Mr Gold and other colleagues of Mr Rao's within the Commonwealth Secretariat. On 14 February 2002 Mr Venuprasad offered a number of quite detailed comments about the report which he stated "lacks coherence and clarity". He said that it appeared to be a "cut and paste job of a group of subjects without anything plausible". [see 2: 527]

4.16 In regard to the recommendations contained in the draft report Mr Venuprasad said that they were an example of "running before even walking". No institutional framework was given and the information provided in Chapter 6 (that contributed by the Applicant) only talked of basic costs which at US$220,000 for set up expenses "seems a rip off! Not relevant in a developing country context". [2: 527]

4.17 In regard to the COMBINETGPS website, developed as part of the project, Mr Venuprasad said that it did not fit in with what had been recommended or concluded in the draft report, though references had been made to it in the report. It was also just a website that had a long way to go before it could be called a market place. Mr Venuprasad also said that the fact that the report had been sent arbitrarily to the Government of Namibia without any concurrence by SASD but under its name was something that could only bring unnecessary problems [2:527]. Mr Venuprasad went on to make more comprehensive comments about various aspects of the report. He concluded by attaching comments from Dr Dr Nadadur Janardhanan and Mr Lome Dyke, the consultants engaged originally on the project, which he suggested had not been reflected in the draft final report even though they were available in October-November 2001 [2:529]

4.18 Mr Venuprasad's comments prompted a meeting with Mr Rao to discuss the draft report. This meeting took place on 18 February 2002. Mr Rao was asked at the time to indicate a date by which all files relating to the project would be returned to SASD [see 2:536-537].

4.19 On 4 February 2002 further comments about the draft report had been received from the Namibian government [see 2:578-579]. These comments contained a query about the "sweeping generalization" that "Namibia is ready for an electronic market place". It was suggested that this statement needed to be moderated since it assumed the existence of a sophisticated technology infrastructure and a sound regulatory framework for conducting web-based transactions which was not the case in Namibia. A more tempered approach of launching initiatives for the commencement of an electronic market place on an experimental basis was said to be more appropriate. It was also indicated that proposals for the establishment of a legislative regime to deal with E commerce created significant dilemmas. The comments concluded with the expression of the view that the draft report, while fully covering the issues of the rationale and the needs of the project and the approach to be adopted, required further essential elaboration in relation to a detailed action plan for the whole project and for a related timeframe and total project investment costs and financing [see 2: 579].

4.20 On 16 April 2002, Mr Gold wrote an urgent memorandum to Mr Rao, which was copied to Deputy Secretary-General Cox and Dr K Lum, raising a number of concerns about SASD's E commerce projects. In regard to COMBINETGPS - project No X/NAM/16, Mr Gold said that

" we are anxious that this project has still not been closed. I have been informed that three of the consultants had submitted their reports to you before November 01. A lack of coordination with the Division on the conduct of this project is causing us increased embarrassment with one of the consultants based on some of your assurances. I urge you to close this project by 30 April 02 and return all the project files and other documentation by 15 May 02". [see 2:598]

4.21 As already described, this memorandum from Mr Gold was followed by the
correspondence between Mr Venuprasad and the Applicant on 26 April 2002. On 1 May 2002, a meeting was held in the office of Mr Pierre Bertholot, the Deputy Director of SASD, to discuss the Namibia project. Mr Rao was present at this meeting as well as Mr John Knowles, Mr Venuprasad and Ms Nellie Nsemwa. Mr Rao was asked to clarify who was the project manager and why he had continued communicating with the Applicant. Mr Rao indicated that he remained the project manager. He also said that the Applicant had carried out the work according to the Terms of Reference with the exception of item No 3 - preparation of a database on raw materials and technology. This database had been prepared by other consultants on the project - Mr Dyke and Dr Janardhanan. Mr Rao further stated that the Applicant had submitted a satisfactory report.

4.22 The file note of this meeting, which had been prepared by Ms Nsemwa, then
indicated that Mr Rao was asked why the Applicant had not been paid the final instalment of their fees if the report had been deemed satisfactory by him. Mr Rao explained that they had submitted a satisfactory report but had not provided all of the required accounting on the expenses they had been given in advance. Therefore as a precaution he had withheld final payment of the fee balance even though there was not a link between the contract's Terms of Reference and the making of this payment. [see 2:761- 762]

4.23 On 2 May 2002 Mr Gold sent an email to Mr Rao with copies to Mr Bertholot and Mr Venuprasad. The email read

"Thanks for dropping by this morning. Good to see you back in your old haunts. I had a follow up meeting with Pierre and Ram both of whom would also like to see a conclusion to this valuable programme. I am now proposing that you be given an opportunity to complete the report in the timeframe that we discussed, (i.e. two weeks - but I am willing to give you an extra two days till May 17). As a compromise to our discussion, we (SASD) would like to receive the report from you and send it out as an SASD report. We would reserve the right "tweak" the report as required and undertake some editing etc. if we felt the report would benefit. I hope this is agreeable to you. Thanks for all the effort you have put into this project. Cheers. Dick." [2:758]

4.24 On 5 May 2002 Mr Gold, in his capacity of the Director of SASD, wrote to the Permanent Secretary of the Ministry of Trade and Industry of the Government of Namibia advising him of the plans to complete the project in a timely fashion. Mr Gold said that a regrouping had occurred to ensure that the approach and methodology being adopted was fully responsive to Namibia's needs. In order to ensure that a final report would be delivered within a reasonable timeframe Mr Venuprasad had been entrusted with the responsibility of project manager while Mr Lorne Dyke had been re-engaged to assist him. Mr Gold said that both of these persons were "fully committed to the Secretariat's undertaking to provide your Ministry with a report and recommendations that could lead to the establishment of a viable GPS for the benefit of the country's small business
sector." [2:764]

4.25 On 6 May 2002, Mr Rao also wrote to the Permanent Secretary of the Namibian Government's Ministry of Trade and Industry. Mr Rao's letter, which was addressed to the attention of Mr I Kamati Mutilitha, indicated that the comments that Mr Mutilitha had provided about the draft final report on the project had been considered carefully and where possible taken on board and incorporated. The only matter which now required further consideration was a detailed financial plan and implementation details. Mr Rao said that he had

"spoken to Ms Jan Jananayagam who is the expert in this field and she is willing to do a detailed financial plan and I will revert to you on that later. In the meanwhile, the updated final report is placed below along with a CD-Rom containing the file that your office could format and print it in colour. This would also enable any minor corrections that you may need to make to make the report suit your Ministry's requirements." [2:765]

4.26 Chapter 7 of the report sent by Mr Rao to the Namibian government on 6 May 2002 was titled COMBINETGPS. [2:715]. With the exception of some additional information relating to the cost of setting up a pilot phase of COMBINETGPS, and the rationale of the potential benefits of this scheme, the contents of Chapter 7 appear identical to those of Chapter 6 in the draft report sent by Mr Rao to the Namibiangovernment in February 2002. [see 2:725 and 727 for additional information] The report sent on 6 May 2002 was not labeled as a draft.

4.27 Mr Rao did not provide copy of this report to Mr Gold until about 6 June 2002. On 13 June 2002 Mr Gold acknowledged receipt of the "final (draft) report" of the COMBINETGPS project. Mr Gold also reminded Mr Rao of the email he had sent on 2 May 2002 indicating that SASD would reserve the right to tweak the report and to undertake editing as required. Mr Gold therefore said that

"I request you not to disseminate this report or contact the Government of Namibia on this project until you have heard from Ram Venuprasad, the project manager.

Kindly send us by email the "soft" version of this report. besides handing over all other project documents in your possession." [2:836]

4.28 It would appear that at the time of writing this memorandum to Mr Rao, Mr Gold was unaware that the report had already been sent by Mr Rao to the Namibian government. In his evidence, Mr Venuprasad stated that he had first become aware of this situation when undertaking a joint mission with Mr Lorne Dyke after his re¬engagement to work on the project. During the course of a mission to Namibia in June 2002, they were informed by the Government of Namibia that the final report had already been sent by Mr Rao in May 2002 and they were given a copy of it. Mr Venuprasad said that he was taken completely by surprise as the final report had been sent without first referring it to SASD. However he made no comment about the matter because to do so would reflect poorly on the Commonwealth Secretariat. [see B: 76 at paragraphs 13 and 14]

4.29 Following this mission to Namibia, Mr Lorne Dyke prepared and submitted to the SASD a new draft of a final report on the Namibia project. [see 2:842-949] The report, which made a case for developing an effective procurement solution for Namibian SMEs which was not purely technology driven, was ultimately accepted by the Namibian government and a pilot project was subsequently requested by the Government for implementation. [see B: 76-77, at paragraphs 17 and 18]

The Tribunal's Conclusions

4.30 Having reviewed in substantial detail the interactions between the parties as well as the internal assessment made by the Respondent's officials of the Applicant's performance under the terms of the contract, the Tribunal is satisfied that there were genuine and appropriate concerns expressed as to whether the Applicant had fulfilled its contractual obligations. The evidence is clear that shortly after demonstrating the prototype website at a workshop in Namibia, the Applicant was determined to proceed with what it termed the second phase of the project which called for the implementation of an E commerce system based on the prototype that had been developed. The Applicant hoped to benefit financially from this new phase of the project through the generation of licence fees and allied arrangements. [See in general 2:538 - 554]

4.31 Mr Rao was fully aware of these objectives and would seem to have done all he could to facilitate their implementation. [See in general 2:562 - 568]. This facilitation included arranging meetings between Namibian government officials and the Applicant during the course of a visit made to London in November 2001. Following this visit Ms Jananayagam, on behalf of the Applicant, engaged in a series of interactions with Namibian government officials designed to secure their agreement to proceed with the second phase of the project independent of the Respondent and before the Respondent had submitted a final report on the project to the Namibian government. [See in general 2:559 - 565] Ms Jananayagam also provided copy of her contribution to the project's final report to the Namibian government before it had been approved by Mr Rao or discussed with any of the other expert consultants employed on the project. [B:24] These actions of the Applicant were not in accord with Clause 8 of the Terms of Reference which required the applicant to "prepare a report jointly with other experts".

4.32 Mr Rao received and accepted the Applicant's report on 7 January 2002 and, as noted, it was incorporated into the draft report which was then sent by Mr Rao to the Government of Namibia in February 2002. Mr Rao was, by this time, satisfied that the Applicant had completed all of the terms of the consultancy assignment and an invoice had already been submitted for payment of the remaining fees as well as travel expenses. However, when Mr Rao's colleagues in the Commonwealth Secretariat became aware of the existence of the draft report, after it had been sent to the Namibian government, they voiced a number of legitimate concems about its content and recommendations. The main comments about the draft report within the Commonwealth Secretariat were prepared by Mr Venuprasad but they were adopted by his superiors, Mr Bertholot and Mr Gold in further interactions with Mr Rao.

4.33 By the time of the correspondence which was sent by Mr Venuprasad on 26 April 2002 to the Applicant, advice had also been received from the Namibian government about their reactions to the draft report. These concerns included comments about the lack of consideration given in the proposal for an E market place approach to the realities of the situation in Namibia which lacked the infrastructure and technology support required to implement such a proposal. These concerns related directly to Clause 5 of the Terms of Reference in the consulting assignment, namely, the provision of advice

"on a communication strategy for linking the manufacturing sector using computers and COMBINETGPS, taking into account the geographical features of Namibia and the present communication infrastructure." [1 :004]

4.34 Mr Venuprasad's letter of 26 April 2002 also referred to concern about the Applicant's fulfillment of Clause 3 of the Terms of Reference which required the preparation of suitable databases on raw materials and technology for use on PCs and on the Internet as an add-on feature to COMBINETGPS. The Applicant disputed the non-completion of this clause of the Terms of Reference, as it did in regard to the other two clauses. Mr Rao suggested that this particular clause had been fulfilled by provision of the databases referred to by the other consultants on the project. Whether this was a correct assessment of the situation remains unclear from the evidence before the Tribunal.

4.35 The Tribunal concludes, given the situation that they were confronted by in regard to the Draft Report of February 2002, that none of the actions which have been described and which were taken by members of SASD within the Commonwealth Secretariat were inappropriate or could be labeled as "undermining" the terms of the contract entered into between the Applicant and the Respondent. Mr Gold and his colleagues were not bound by the decision taken by Mr Rao in January that the Applicant had satisfied all of the requirements of its consultancy assignment. That decision was taken without any consultation by Mr Rao with his superiors and before any feedback had been obtained about the draft report to which the Applicant had contributed. The Respondent's officials had a clear obligation to the Namibian government to ensure that any final report sent to them about the project did address their needs and took account of the realities on the ground. By the time that Mr Venuprasad wrote the letter of 26 April 2002, he and his colleagues in SASD were convinced that the Draft Report did not meet these objectives and that it was a failure on the part of the Applicant to fulfil its obligations under the Terms of Reference specified, even though the purported project manager, Mr Rao, disagreed with this assessment.

4.36 The evidence shows that the Namibian government was not advised of any change in the project managementship until the letter written by Mr Gold on 5 May 2002. In that letter Mr Gold made it clear that the preparation of the final report had been entrusted to the new project manager, Mr Venuprasad, assisted by Mr Lorne Dyke who had been re-engaged as a consultant. The evidence also shows that the very next day Mr Rao, in an action which he admitted in his oral testimony was in direct contravention of the instruction he had received from Mr Gold, sent a copy of the Final Report to the Namibian government.

4.37 During the course of his oral testimony, Mr Rao was questioned by the Respondent's counsel about his actions around this time. Mr Rao was referred to a chatroom conversation that it was alleged he had with the Applicant's Managing Director, Ms Jananayagam on about 2 May 2002, after the letter written by Mr Venuprasad of 26 April 2002. In this conversation, Mr Rao, who used the chatroom name Namibiaravi, said that he was "sorry about the developments". Questioned by Ms Jananayagam about what the status was "on all of this at the moment", Mr Rao indicated that he wished to "evaluate various options in a cool and calculated manner". Mr Rao said that:

"the website is with you …with all contents … report is with me …it is only the business plan that is a problem … but if GOV can do it as part of their pilot....funding it themselves it will keep the wolf at bay … But in case they need my report …so the project is still under control. That is my assessment." [see 2:759]

4.38 Mr Rao queried the accuracy of the chatroom message and suggested that it could have been manipulated. He also denied that the conversation implied that he had been seeking to withhold from Mr Venuprasad the project files and other information in his possession about the project. [see transcript 33-34]

4.39 The Tribunal did not find Mr Rao to be a convincing witness so far as his recollection of the details of any personal communications he had with Ms Jananayagam on this and other occasions. Rather than acting in a neutral and objective capacity as a project manager, this and other chatroom conversations suggest that Mr Rao was in fact acting as an advocate for the Applicant's E market place approach and for an outcome from the project which would ensure that the Applicant derived financial benefits through the licensing of their products developed in the course of the project. The project did remain under Mr Rao's control, at least until the interventions made by other officials within the Commonwealth Secretariat in late April and early May 2002. After that time, as indicated by the evidence, he was formally relieved of his role as project manager and a new approach was adopted for the preparation of a final report which was acceptable to the Namibian government and its needs.

4.40 The dispute between the Respondent and the Applicant in regard to the fulfillment of the Applicant's obligations under- the Terms of Reference remained unresolved for a number of months. In September 2002, Mr George Saibel was appointed as the new Director of the SASD. Shortly after joining the Secretariat on 30 September 2002 Mr Saibel reviewed the Namibia project file and discussed it with his officers. On the basis of his review he determined that there were funds outstanding to the Applicants but that they were being properly withheld because of a failure by the Applicant to complete all of the relevant obligations under the contract. Further discussions and correspondence then took place between the Applicant and the Respondent. Certain allegations were also made about the conduct of one of Mr Saibel's staff members, Mr Venuprasad.

4.41 Mr Saibel indicated that he conducted an investigation into the allegations. This investigation determined that the allegations were entirely unfounded. Ultimately, after further internal discussions, a decision was taken that despite the lack of completion of the contractual obligations the Respondent could not justify the continued drain on resources that was arising from the dispute. To put an end to the matter without any further expenditure of time and resources, and without acknowledgement or acceptance of any of the claims that had been made by the Applicant, it was agreed that the Respondent would make final contract payments for the fees and outstanding expenses. This payment, amounting to £3394.53 was made on 31 December 2002. [3:1243]

4.42 It should be noted that during the course of the oral testimony provided by Mr Venuprasad, counsel for the Applicant questioned him about alleged misconduct on his part during the performance of his duties as an official of the Commonwealth Secretariat. Nothing arose from this questioning which placed in any doubt the finding made earlier by the Respondent's own investigation that all of the allegations were without foundation.

4.43 It is also to be noted that the evidence before the Tribunal in regard to the exercise of the discretionary powers of the Respondent to seek to end the dispute in the manner described was conducted in a lawful manner against the relevant background facts set out. The Tribunal's approach to this issue is based upon the principles, which it has espoused in earlier decisions, drawn from In Re Ballo, Judgment No 191 ILOAT. As was stated In Re Ballo:

"Discretionary authority must not, however, be confused with arbitrary power. It must, among other things, always be exercised lawfully, and the Tribunal, which has put before it an appeal against a decision taken by virtue of that discretionary authority, must determine whether that decision was taken with authority, is in regular form, whether the correct procedure has been followed and, as regards its legality under the organisation's own rules, whether the administration's decision was based on an error of law or fact, or whether essential facts have not been taken into consideration, or again, whether conclusions which are clearly false had been drawn from the documents in the dossier or, finally, whether there has been a misuse of authority."

Claims for Relief

4.44 In its pleadings the Applicant has sought reimbursement of certain expenses and damages as a result of "the Respondent's breach of contract in undermining the basis of the initial contract". As a result of the Tribunal's conclusion that no such breach occurred, and that a legitimate dispute existed between the parties concerning the completion of the contractual obligations, this claim for relief is denied.

4.45 The Applicant also seeks relief, in the form of specific performance, for the Respondent to:

"Provide an official reference from the Respondent addressed 'To Whom It May Concern' confirming that the Applicant has satisfactorily completed it's obligations under the contract." [A: 1 0]

4.46 The Tribunal can find no basis upon which it can make such an order for specific performance. No requirement, express or implied, is to be found within the terms of the contract between the parties for any referenc~ to be given. The evidence also indicates that from the Respondent's perspective the Applicant did not complete its obligations
under the contract in a satisfactorily ma~ner. Nonetheless, a decision was taken to make payment of the final installment of professional fees and outstanding express in order to bring closure to the matter.

5. DAMAGES CLAIM FOR DELAYED PAYMENT OF FEES AND COSTS IN RECOVERING PAYMENTS.

5.1  A further head of relief sought by the Applicant is for general damages for the delayed payment of contractual fees owed to the Applicant, and the Applicant's staffing costs in recovering payment. [A:9 - 10]. The Applicant contended that the project manager who replaced Mr Rao, Mr Venuprasad, through a series of actions, effectively repudiated and undermined the express and implied terms of the contract. These actions
comprised:

"18(a)  Unreasonably withheld payment of the Applicant's final invoice for consultancy fees submitted in January 2002 for 1 year, payment being made only after over numerous letters and several telephone calls from the Applicant. [Exhibits 3.1 - 3.19, pages 42-46, pages 199, pages 60¬65, pages 83-85, pages 94-112, page 173, pages149-151]

(b)  Unreasonably withheld payment of the Applicant's travel expenses claim pertaining to the consultancy, submitted in July 2002 for a period of six months. [Exhibits]

 (c)  Mr Venuprasad failed to respond diligently and/or at all to the
Applicant's correspondence in relation to the unpaid invoices.

(d)  Mr' Saibel claimed that the Applicant has not infact submitted the travel expenses and that the travel expenses claim documents were not in the Respondent's files. This claim was shown to be false and that the Respondent would have been aware it was false. [Exhibit 3.18 pages 114, 113-136]. The Applicant resubmitted the claims nevertheless they remained unpaid for a further 3 months and several letters later.

 (e)  Mr Venuprasad without reasonable cause and/or authority with
disputed the Applicant's satisfactory completion of the consultancy project [Exhibit] in direct contradiction of his predecessor. The Applicant brought to the Respondent's attention on numerous occasions that the was written confirmation of satisfactory completion of the consultancy. [pages 103-109].

(f)  Mr Venuprasad unreasonably and without valid reasoning disputed the Applicant's ownership of the Applicant's website and software despite the explicit statements to the contrary in Annex 1 of the contract [Exhibit 1.1, Annex 1] and other contract documents [pages 99, 137].

(g)  The Respondent failed to return copyright materials to the Applicant and failed to take any steps to protect the Applicant's intellectual property rights. [Exhibit 1.5 page 21].

(h)  Mr Venuprasad further frustrated and undermined the whole ethos of the project as represented to, and envisaged by the Applicant prior to the entering the consultancy by the following actions. It is the Applicnt's case that the actions of Mr Venuprasad were motivated by malice and/or personal gain:-

a. Withdrawing the final report submitted to the government of Namibia by the former project manager, Mr Rao [Exhibit 1.5, pages 21-23]
b. Seeking to source alternative software providers for the provision of the e-marketplace IT service
c. Refused to allow the Applicant to link its web site with the Internet domain name owned by the Respondent. [Exhibit 4.4, pages 150J
d. In order to ensure continuity of the web site owned by the Applicant and launched by the Government of Namibia, the Applicant was forced to 

i  Move the web site to a different internet domain name 

ii  Rename the web site from Combinet GPS to Namibia GPS

iii  Recreate all graphics on the web site to comply with the Respondent's letter dated the 26th April (Exhibit) which denied the Applicant continuing use of the name CombinetGPS or the Respondent's logo [pages 21-23]" {A:7-8]

5.2  Contractual fees comprising the final instalment due on the contract, and outstanding travel expenses, were ultimately paid by the Respondent, as noted above, on 31 December 2002. [3:1243]. The payment included £3000 as a final instalment of professional fees, and £394.53 of expenses incurred on a site visit to Namibia and South Africa in August 2001.

5.3  Many of the contentions made by the Applicant in regard to this particular claim have already been addressed by the Tribunal earlier in this judgment. In his role as project manager Mr Venuprasad did query, with reasonable cause, whether the Applicant had completed the contractual obligations in a satisfactory manner [Paragraph 18( e) above]. Mr Venuprasad and other officials employed by the Respondent also queried, properly, the Applicant's claim of ownership of the website and software [paragraph 18(f) above]. There is also no evidence to support the contentions that in performing his role as a project manager Mr Venuprasad was motivated "by malice and/or personal gain", in acting in the way described in paragraph 18(h) above. Mr Venuprasad's action and those of the Respondent in general, were appropriate in the circumstances.

5.4  The claim that the Respondent failed to return copyright materials [paragraph 18(g) above] was withdrawn by the Applicant during the hearing, while as a result of the ruling made concerning ownership of the website the claim that the Respondent also failed to "protect the Applicant's intellectual property rights" must also lapse.

5.5  In relation to the withholding of the Applicant's final invoice for consultancy fees submitted in January 2002 until years end [paragraph 18(a) above] the Tribunal concludes that this action on the part of the Respondent was not unreasonable, given the concerns which have been detailed at length above regarding the Applicant's satisfactory completion of the terms of it's consultancy. These concerns resulted in an extended series of phone calls, emails and other correspondence between the parties before Mr George Saibel finally resolved to conclude the protracted dispute by making the payment described.

5.6  The situation regarding the withholding of the Applicant's travel claim for the recovery of expenses incurred on the project is more problematic [paragraphs (b), (c) and (d) above]. The expenses dated back to August 2001. Documentary evidence indicates that the Applicant sent details of the travel claim by registered mail to the Respondent in July 2002 [3:1082-1096]. +J:Hs The Respondent claimed subsequently that it had no record of this mailing and the materials were submitted again in October 2002 [see 3:1066-1076]. The claim itself was not for a large sum yet it was still not paid until the end of December 2002, even though no further queries appear to have been raised by the Respondent regarding its validity.

5.7 In these circumstances the Tribunal finds that the Respondent did not respond diligently or appropriately to the Applicant's legitimate request for the reimbursement of its travel expenses under the terms of the consultancy. The consultancy provided for such payment, although there was no mandate to pay by a specific date, or provide for any penalties arising from late payment. Even so an obligation can be implied in the terms of the contract that payment would not be unreasonably withheld. The Tribunal concludes that in failing to pay the Applicant's travel claim for a period of more than five months the Respondent was in breach in this implied term, and the Applicant is entitled to be compensated for this breach. The Tribunal defers making any decision about the quantum of this compensation until it has received further submissions on this issue from the parties.

6.  OTHER REDRESS SOUGHT

Development, launching and hosting of website

6.1  The Applicant's pleadings contain a general claim for relief under the head "25. Any other remedy as the Tribunal shall see fit". The Tribunal chooses to deal with the further claim for compensation under this head, namely, whether the Applicant is entitled to receive sums in respect of additional work done and services rendered at the request of the Respondent. The sums relate principally to development costs associated with the software for the prototype website specified in the contract, and for those occurred in hosting this prototype website. It is to be noted that no specific plea is made for such damages by the Applicant but in both her written statement and oral testimony Ms Jananayagam claimed that she did extra work for which she was not paid.

6.2  Clause 1 of the Terms of Reference of the contract required the Applicant to "create a prototype website with the functionality specified in their proposal for the purpose of demonstration". [1 :004]

6.3  This prototype website was to be built, according to Clause 2 of the Terms of Reference, utilising underlying software components which were proprietary to the Applicant. The website was to be linked to the COMBINETGPS domain name. There was also to be an add-on feature to the website comprising suitable databases on raw materials and technology for use on PCs and on the Internet. [Clause 3] An on-line group purchase scheme incorporating necessary forms, checks and balances and with necessary linkages to sources of technology and raw materials was also to be prepared. [Clause 4]

6.4  On behalf of the Applicant, Ms Jananayagam explained her understanding of what amounted to a prototype website with a functionality limited to that of the purpose of the demonstration. She said that for the purposes of demonstration, it was normal to develop a "mockup" or series of linked screens that could be walked through for the purpose of a demonstration. However, if someone wished to launch the prototype website it would have to be fully functioning and that there was a big difference in the cost and value of a "functioning live website as opposed to a prototype". [B:13 at paragraph 53]

6.5  Ms Jananayagam indicated that in order to build the model website the existing data structures and programme codes had to be modified and where new functionality was required this was added to the existing body of code. The project work included taking the data provided and owned by various parties, including the Respondent and the Government of Namibia, and storing and converting it into formats which were readable by the Applicant's programmes.

6.6  Ms Jananayagam said that by early August, before the commencement of the workshops that were to be given in Namibia, it became clear to her that what Mr Rao wanted was more than a prototype website for the purposes of demonstration. This was communicated to her verbally by Mr Rao and also through a document, dated 10 May 2001 in which Mr Gold, then Director of EIDD, advised the officials of the Ministry of Trade and Industry of the Government of Namibia about the plans for the workshop and associated demonstration . [see 1: 124-126]

6.7  Ms Jananayagam said that the new functionality being requested was much more in keeping with a full fledged website development than a prototype model. Following this request Ms Jananayagam said that a great deal of additional programming work was required between 2 July 2001 and 24 August 2001. [see B:14 at paragraphs 56-61]

6.8  On or about 19 August 2001 Ms Jananayagam said that she was advised by Mr Rao that the Namibian Minister of Trade and Industry would officially open the workshops. On that same day Ms Jananayagam said that she discussed with Mr Rao how the prototype would actually be demonstrated. She explained it could be demonstrated on a laptop, but Mr Rao asked that the website should be linked initially to the domain name COMBINET which had been registered and was owned by the Respondent. For the website to be linked in such a way, Ms Jananayagam said it would also need to be housed and supported by someone. She indicated that the Applicant agreed to do this at the request of the Respondent on the understanding that if the Government of Namibia was happy to proceed to a later phase of the project, then Sumukan would recoup its costs.

6.9  On 30 August 2001, the website was demonstrated to the Ministry of Trade and Industry on the Government of Namibia. Following this demonstration, Ms Jananayagam said that the Minister asked for the website to be launched. At this point, according to Ms Jananayagam, it became much more than just a prototype for demonstration purposes.
It was actually an operating website. She said that Mr Rao felt that it would be
unacceptable to then close it down, even though the launch as such related only to a "content" and "daily news" section rather than any transactional section. Ms Jananayagam said that this decision to maintain the website meant incurring hosting and maintenance costs which were not covered by the consultancy agreement. She said

"however, the understanding at the time was that the Government of Namibia had accepted the website, Phase 2 of the project was imminent and Sumukan would be chosen for it. On this basis we were willing to incur the extra cost involved in supporting and maintaining the site". [8:16-17 at paragraph 73]

6.10  Ms Jananayagam said that in order to have the website linked to the domain name the Applicant had already bought server space in bulk from a third party. The server space was very cheap. However, once the website "actually went live" on 30 August 2001, Sumukan was providing much more than server space. This service included a daily news and market report on the website, which had to be kept up to date, and general support and working operational processes. Ms Jananayagam said that through Mr Rao the Respondent was aware of these developments and Mr Rao also said that they might be remunerated for the provision of the daily news if budget was available.
[see B: 17 at paragraph 75]

6.11  The evidence shows that the Applicant did in fact continue to host and support the website, linked to the COMBINET domain name until late April 2002. [3:1235.01- 1235.02] At that time, following a dispute as to the use of the COMBINET domain name and also the Commonwealth Secretariat logo on the site, the Applicant decided to establish a new domain name, NAMIBIAGPS, and linked that name to the website rather than that of COMBINETGPS. [3:1000-1001]. As has already been indicated, the dispute about the use of the COMBINETGPS domain name and Commonwealth logo subsequently broadened into a general dispute about the ownership of the prototype website.

The Tribunal's Conclusions

6.12  Now that it has been determined that the prototype website is owned by the Respondent rather than the Applicant, is there any liability upon the Respondent to meet the hosting and support fees previously paid by the Applicant? Further, was there in fact additional expense incurred in the development of the prototype website, over and beyond that provided for in the consultancy assignment, for which the Applicant is entitled to be compensated for by the Respondent?

6.13  In their submissions the Respondent contended that there was no responsibility upon them to compensate the Applicant for any additional expenses incurred under either of these claimed headings~ In advancing this contention the Respondent relied principally upon the provisions of Clause 7 of the formal letter in respect of the short-term consultancy with the Applicant which provides:

"you will not expand or vary the Terms of Reference and any agreed workplan, whether at the request of the Government of Namibia or otherwise, in any way so as either to extend the duration of the consultancy or to increase the fee without prior written agreement of the Secretariat first having been obtained." [B: 002]

The Respondent also denied any claim for extra work done based on quantum.

6.14  Having regard to the evidence in this matter the Tribunal is satisfied that there is no basis upon which the Applicant can base a claim for the recovery of expenses. The Tribunal can find no prior written agreement of the Secretariat to expand or vary the Terms of Reference in the manner indicated by the Applicant. The Tribunal is further strengthened in this view by the substance of a request made via an email dated 8 August 2001 by Mr Rao to one of the Applicant's employees, Mr Vijay Kriishnasamy. [see 1 :197] Mr Rao asked that as part of the demonstration at the workshop in Namibia of the prototype website it should

"work on a small scale that would illustrate aggregation, show sources of supply of raw materials and technologies with membership procedure and rules of syndication ."

Mr Krishnasamy asked Mr Rao for assurance that he was not expecting anything more than a "demo version". Mr Rao assured him that he was not and that it was all there in the Terms of Reference. Mr Krishnasamy said that he would advise Ms Jananayagam of this request.

6.15  The nature of this request would seem to be very much in accord with the
provisions of Clause 3 of the Terms of Reference of the consultancy assignment [see 104].
Whatever the case, there is no basis for an assertion that there was a request in writing by Mr Rao for the creation of what Ms Jananayagam described as a live website. It is also significant that in oral testimony provided to the Tribunal by one of the Applicant's former employees, Mr Balaji Raghavan, it was stated that the website utilized at the Namibia workshops in August 2001 was a prototype website and not a live and functional website. Mr Raghavan, a software engineer, was responsible for writing the programming code for the prototype website for COMBINETGPS.

6.16  Mr Raghavan was asked to describe his understanding of the difference between a prototype website and a live and functional website. Mr Raghavan offered an explanation which relied upon an example of building a prototype house. He stated that at the commencement of the project they had in mind the construction of a demonstration website which meant that they were being asked to build a typical prototype home which was not meant for people to live in. For example, what they were to build might look like a home but it was not really a functioning home - there would be a tap fixed in the house but there would not be any water supply. There would also not be any good foundations for the house so it could not be used as a residence. This is what he called a demonstration website. The home was for a workshop only. That meant that you could take twenty people in there, have a tour around the home, but you could not ask them to live in that home. If you did make a home separately for people to live in that could be a fully functional website, then that home would need to have a tap with water supply, an electricity supply and all the safety regulations and standards in building codes would need to be followed. That would be a fully functional home, or website. COMBINETGPS was a prototype website only, not a fully functional website, as was NAMIBIAGPS.com which was built subsequently.

6.17  On the basis of Mr Raghavan's evidence, as well as on the request made by Mr Rao to Mr Krishnasamy, the Tribunal can find no justification for Ms Jananayagam's assertion that there had been a variation in the Terms of Reference in August 2001 which amounted to a new requirement for the construction, support and maintenance of a live rather than a prototype website. The website that was "launched" at the Namibia workshop was still not a fully functional website since it lacked, among other things, any ability to perform transactions which were at the core of the E market commerce approach that was being espoused by the Applicant. Additionally, the Tribunal is of the view that the decision made by the Applicant to continue to maintain and support the website which had been createq was based upon its desire to persuade the Government of Namibia, and other governments in the region, to adopt its E commerce approach and to gain the consequent financial benefits of licensing agreements.

6.18  In her testimony, Ms Jananayagam admitted, under questioning by the Tribunal, that the Applicant's entering into the agreement with the Respondent was based on an element of business risk. The Applicant was prepared to assume this risk and to perform the Terms of Reference for a very low fee in order to promote itself for the preferred supplier of the software and technology required to develop an E commerce system in Namibia and elsewhere. This was the "pot of gold at the end of the rainbow" that was identified in the proposal as Phase 2 of the project. It was, of course, a pot of gold which could only be recovered if the Government of Namibia agreed to the second phase of the project and contracted for it accordingly. There was nothing in the existing contract which would justify any recouping of these expenses from the Respondent, even if they were additional to the requirements of the Terms of Reference. The claim for any damages as a remedy under this head is therefore denied. 

7.  COSTS

7.1  The Tribunal makes no ruling on costs at this stage but seeks submissions from the parties on this issue, these submissions together with those relating to the quantum of compensation for delayed payment of travel expenses, to be filed within 14 days of the publication of this judgment.

Given on this 25th  day of April, 2005 in London

Signed

Professor Duncan Chappell
 
Dame Joan Sawyer DBE, PC     
 
Anesta Weekes QC