Dlamini Inc dealt blow in Ernst & Young spat

It’s back to the drawing board for black law firm Dlamini Incorporated after the Joburg High Court ruled against it in its dispute with Transnet and Ernst & Young (EY) over a lucrative Transnet tender.

Sunday World reported in January that a war of words had broken out between the three parties over a sub-contracting contract.

Following the dispute, Dlamini Inc, owned by Nthabiseng Dlamini, approached the Joburg High Court imploring it to set aside the decision by Ernst & Young to sack it as a sub-contractor, and pay it R10-million in damages.

The feud stemmed from a tender awarded to Ernst & Young by Transnet in 2018 “for the provision of transaction services to prepare and conclude a joint development partnership for the development and operation of natural gas networks”.

The three-year contract was worth R95-million.

Ernst & Young was appointed to do the job after it shrugged off stiff competition from KPMG, Absa, PricewaterhouseCoopers, Rebel Group, J Maynard and Barbican Advisory Service.

Ernst & Young’s consortium had multinational law firm Covington & Burling and Dlamini Inc advising it on the legalities of the deal.

Convington was the lead law firm in the transaction.

However, no sooner had the parties started working together, did conflict emerge between Covington and Dlamini Inc, with the latter feeling Covington was not taking its input seriously.

The deterioration in the relationship is demonstrated by several e-mail exchanges between the two firms, which  Sunday World has seen.

On February 26 2018, Covington’s Donovan Ben sent an e-mail to Dlamini.

“We were brought into this project by EY because we have extensive international experience on LNG [liquefied natural gas] and gas pipeline projects … your firm does not have our level of experience on this specific type of project but has other skills and experience that we do not have,” the e-mail reads in part.

Dlamini retorted the following day in a fiery e-mail: “I need to remind you that you cannot dictate what our experience is and where and when can we have an opinion on the mandate before us. To punt the idea that you are bigger, therefore better, is lame and if this is the attitude that you are bringing in this project, we have a problem.”

One of the arguments Dlamini advanced before the court was that Ernst & Young had used her company to meet the empowerment criteria for the tender.

The court dismissed both her demand that she be paid R10 million in damages and the assertion that Ernst & Young terminated their agreement illegally.

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