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Category Healthcare
SUB CATEGORIES General  |  HIV |  Medical Schemes | 

Bun fight

27 August 2004 Angelo Coppola

(27.8.04) On 01 July Protector Group was served with a court order to hand over all data and documentation relating to Protector Health medical scheme with immediate effect.

The medical scheme moved its administration to Medscheme, its newly appointed administrator on the grounds of alleged substantial breaches of contract. 

This move was made notwithstanding a valid service agreement between the scheme and Protector Group.

This action effectively paralysed Protector Group and its subsidiaries and put the jobs of more than 800 employees at risk.

Protector Group lodged an urgent application with the high court and the matter was, by agreement, referred to arbitration to be heard by Judge Melunsky, a retired Appellate Division judge, who gave his ruling on 11 August.

In his judgement Judge Melunsky ruled that Protector Health had cancelled the contract unlawfully.

However, the administration of Protector Health will not be returned to Protector Group so as to minimise inconvenience and uncertainty for the plus minus 34 000 members and their families.

Without exception, the arbitrator dismissed every allegation made by Protector Health relating to material breaches as well as alleged dishonesty.

He further ruled that Protector Group and its subsidiaries would be entitled to such damages as they might prove to have suffered as a result of the unlawful cancellation and termination of the service agreement.

These damages sought by Protector Group and other parties will be substantial due to the fact that these claims will be based on the unlawful termination. 

The extent of damages and legal costs incurred will be determined at a further hearing of the arbitration, which should take place within the next month.

The ruling is good news for Protector Group, its funders, bankers and creditors who have supported the Group during these challenging times.

Protector Group's executive chairman, Dr Clarence Mini welcomed the ruling and is optimistic about the future of the group and its business model to serve the emerging markets of South Africa.

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