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Public Procurement: Legal victory against state-owned Pharmaceutical Company

Authors: José Meythaler and Sheyla Cuenca

 

Every victory is an achievement worth celebrating. Today, we are pleased to share with you one of our recent legal victories: We have achieved a positive resolution in a case of public procurement and acquisition of essential supplies and materials in Ecuador.

About the Case

This case represented a legal challenge that focused on an administrative contract related to the acquisition of essential supplies and materials for our client's business in the country. As the execution of the contract progressed, significant issues arose. The state-owned pharmaceutical company ENFARMA EP, in Liquidation, failed to fulfill its contractual obligations by not making the corresponding payment for the delivered products. The continuous breach allowed for the contract to be terminated, as stipulated in the Ecuadorian National Public Procurement System Code.

Our Legal Strategy and Success

Our legal team embarked on a meticulous process to support our client's claims. The legal strategy involved filing an administrative contentious lawsuit and presenting solid evidence supporting our client's compliance with their contractual obligations. Additionally, we emphasized the persistent non-compliance by the state-owned company and its lack of response to the filed lawsuit. The lack of response was considered a denial of the lawsuit's merits, in accordance with Ecuadorian law.


The key arguments of the case are summarized below:

  1. Identification of the parties and nature of the proposed action: On behalf of our client, an administrative contentious lawsuit was filed for disputes related to ENFARMA EP. The court was requested to declare the breach, terminate the contract, and order payment of the amounts owed by the state-owned company, plus late payment interest.

  2. Main arguments: Our legal strategy involved analyzing and documenting the origin of the obligation undertaken by ENFARMA EP and its non-compliance, as well as the legal and economic consequences resulting from this breach.

The Positive Resolution

The legal victory arrived on August 23, 2023, when the Administrative Contentious Court, located in Quito, issued the verdict in favor of our client, in case number 17811202000596. The resolution was a triumph.


The main decisions of the court included:

  1. Court's decision: The court declares the lawsuit valid and that all procedural formalities have been met. Furthermore, it concludes that the defendant entity has not fulfilled its contractual obligations, and the plaintiff is entitled to the outstanding payment, plus legal interest.

  2. Termination of the contract due to non-compliance with contractual obligations.

  3. Payment of interest: The court determines that the liquidated and unpaid amounts will accrue legal interest, as per applicable legislation.

  4. Financial settlement: A financial settlement is established based on the Final Delivery and Acceptance Certificate, which includes the outstanding payment amount and a penalty for late delivery.

A Success that Strengthens Our Legal Commitment

This legal victory is another testament to our commitment to legal excellence and the defense of our clients' interests. At Meythaler & Zambrano Abogados, we are dedicated to providing effective solutions to legal challenges, and this resolution reflects our ongoing effort to achieve favorable outcomes.


We thank our clients for trusting us as their legal firm of choice and look forward to continuing to achieve successes together in the future.

 

If you need legal advice on matters related to public procurement or contract non-compliance, please do not hesitate to contact us via email at info@lmzabogados.com or by completing our legal services request form:


contratistas revisando pliegos de contratación
Suscripción de Contrato Público


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