IDA faces legal action over ventilator contract

A company suing the Health Service Executive for alleged failure to pay for 350 ventilators sought at the start of the pandemic is separately suing the Industrial Development Authority (IDA) over alleged representations by its staff or agents that the firm was "not to be trusted".

Narooma Ltd claims the €7.4 million contract for the intensive care unit (ICU) ventilators was never performed when the HSE refused to pay and Narooma was unable to pay its supplier in China, a firm called Beijing Aeonmed.

Narooma is suing the HSE for not going ahead with the purchase or performing its payment of contractual obligations. That matter has gone to arbitration.

In separate proceedings, Narooma is now suing the IDA, claiming damages for interference with its economic interests and for inducing the HSE into breach of contract.

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The case was admitted to the fast-track Commercial Court on Monday by Mr Justice David Barniville, who was told by Martin Hayden SC, for Narooma, that his client estimates its losses as a result of the defendant's actions at some €3.2 million. The judge noted this figure was not contained in the papers.

Michael Howard SC, for the IDA, said his client was not objecting to entry of the case to the commercial list.

In its statement of claim, Narooma says the IDA’s staff advised it of the HSE’s desire to buy the ventilators and this ultimately resulted in the negotiation and execution of a contract on March 27th last to supply them.

It was a term of the contract that the full €7.4 million would be paid on or before March 30th but then the HSE said it was conducting a due-diligence process, it is claimed.

Payment obligations

The HSE did not meet its payment obligations and Narooma was rendered unable to pay its suppliers and the opportunity to acquire the ventilators was lost, it says.

It appears the HSE, in its due diligence, relied on the IDA representatives in China. It says Terence Wang, the IDA's "chief representative Shenzhen Office" and other IDA employees/servants/representatives knowingly gave false and inaccurate information as to the reputation and trustworthiness of Narooma.

Specifically, it is claimed IDA representatives made “actionable representations to the effect the plaintiff (Narooma) was not to be trusted” and incorrectly advised the HSE it was not capable of distributing the ventilators.

Narooma says as a result it has suffered significant loss of more lucrative commercial opportunities as well as lasting damage to its reputation locally and internationally.

It also says the HSE later contracted directly with the ventilator manufacturers in concert with, or directed and aided by, the IDA.

As a consequence, the IDA induced and procured an unlawful breach of contract between Narooma and the HSE, it is claimed.