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Contract Dispute Between Uniserve and Hitex Amid Pandemic Challenges

Uniserve faces a $23 million lawsuit for contract breach with Jordanian supplier amid £1 billion UK government pandemic supply deals.

By Mackenzie Crow

5/16, 09:16 EDT

Key Takeaway

  • Uniserve Ltd. faces a $23 million lawsuit from Jordanian supplier Hitex for contract termination after sourcing cheaper masks from China.
  • Amid the COVID-19 pandemic, Uniserve secured over £1 billion in UK government contracts as part of a 'VIP lane' for emergency medical supplies.
  • The legal battle highlights disputes over production capabilities and delivery schedules, with Uniserve counterclaiming against Hitex for deceit.

Contract Dispute Amid Pandemic

During the initial wave of the COVID-19 pandemic, Uniserve Ltd., a logistics firm owned by businessman Iain Liddell, found itself at the center of a legal battle over a contract termination with a Jordanian supplier, Hitex. The dispute arose after Uniserve, which had secured over £1 billion ($1.3 billion) in UK government contracts for pandemic-related supplies, opted to source 80 million face masks from a cheaper Chinese supplier in June 2020, abandoning its agreement with Hitex. The Jordanian company is now seeking $23 million in compensation, claiming Uniserve unjustly broke off their contract.

Government Contracts and VIP Lane Suppliers

The urgency of the pandemic led the UK government to award contracts rapidly to companies, including Uniserve, to meet the dire need for medical equipment. Uniserve's contracts, totaling more than £1 billion, were part of a broader government effort that saw almost 400 contracts, worth £7.9 billion, allocated to 'VIP lane suppliers'. These suppliers, referred by high-ranking officials like Theodore Agnew, then a minister of state at the cabinet office and the Treasury, were chosen despite some having limited experience in manufacturing or procuring medical supplies. Uniserve's £70-million contract for supplying face masks to the health department highlighted the company's significant role in this emergency procurement process.

Legal Arguments and Counterclaims

In court, Uniserve contested Hitex's claims, arguing that the Jordanian supplier had overstated its production capabilities and failed to meet the agreed delivery schedule. Iain Liddell's statement in court documents, "I can’t put my name to this and they can’t produce so we have to cancel," reflects the company's stance that the termination was justified due to Hitex's inability to fulfill the contract terms. In response, Uniserve launched a counterclaim, accusing Hitex of inducing them into the contract through deceit and misrepresentation regarding its production capacity.

Management Quotes

  • Iain Liddell, businessman and owner of Uniserve:

    "I can’t put my name to this and they can’t produce so we have to cancel."