NEW DELHI: Accusing the Ministry of Defence (MoD) of patent violation, Zemon Technogroup, a Czech-based manufacturer of anti-mine boots, has filed for arbitration in the Supreme Court.
The ministry had chosen not to reply to a legal notice filed by the company. Zemon Technogroup had alleged that MoD terminated its contract signed on March 23, 2009 to supply 29,470 pairs of anti-mine boots to the Indian Army in order to develop its own indigenous anti-mine shoes by copying the patented design of the company. Acting on the March 27 Zemon arbitration, the apex court has summoned MoD to be present at the next hearing on July 17, 2012.
The special all leather patented anti-mine boots weigh around 3.2 kg and can protect personnel from any mine with a charge of 50 grammes of high explosives. These boots also are equipped with a special multi-layer armoured sole.
Zemon Technogroup was selected through a tender process after the mandatory test of the shoes was done in 2009. A contract worth `30 crore was signed between MoD and the company. After the company produced some 18,000 pairs, the pre-delivery inspection of the shoes done in India failed the test. Ironically, small contracts like this are coming under the radar, at a time when big-ticket contracts are stuck due to the government’s policy paralysis.
The company alleged their representatives were not invited for the first test at TBRL, Chandigarh, and were denied permission to conduct and witness the second test in India. The company has expressed its willingness to test the shoes at any independent laboratory. The MoD letter issued by Master General of Ordnance Branch dated April 9, 2010 in The Sunday Standard’s possession reveals that representative of the company was indeed denied permission to witness the test. “It is intimated that the representative qualified to witness/conduct the blast test has been denied permission to proceed for the pre deliver inspection (PDI),” the letter said. While the MoD says the anti-mine boots failed the blast test, the Czech company alleged that the contract was delayed on the pretext of PDI to buy time to develop a design indigenously, similar to the patented sample supplied to the MoD.
Documents accessed by The Sunday Standard reveals that Zemon Technogroup wrote a letter to Defence Minister A K Antony in April 2011 alleging the copying of its patented boots by the Footwear Design and Development Institute (FDDI), a Noida-based government enterprise, under the Ministry of Commerce.
“Why is the army deliberately trying to fail the test when tests done by independent laboratories in Czechoslovakia and COTEC in the UK showed the same characteristics between the sample boots and those we produced? Why is the army not letting the Technogroup blast expert to be present as a witness to test procedures? What are they trying to hide? We have information that the FDDI has copied our patented shoes and made mendacious charges against the Czech boots,” said Libor Zeman, CEO of Zeman Technogroup.
Zeman’s letter to Antony was followed by a legal notice to the MoD on December 3, 2011.
After the matter reached to the higher-ups in the MoD, the Director General of Weapons and Equipments through a letter dated March 19, 2012 terminated the contract saying that ‘since the items offered by you are repeatedly failing in the inspection, the competent authority under provision of Article 19.1 (a) of contract has decided to terminate the contract.’
“The performance bond submitted by you will be encashed in accordance with article 4.6 and article 13 of the contract as liquidated damages towards your failure to supply the stores,” the MoD letter added. The forfeited amount is approximately `2.5 crore.
Though the MoD letter in March 2012 highlights that the PDI report giving comments and test evaluation report was dispatched to Zeman, the company says they merely intimated the failure without reproducing the testing system.
Though the MoD termination came in March, Zemon Technogroup in its legal notice in December 2011 said there is a breach of contract and violation of intellectual property rights. Zemon also plans to file a case against MoD for stealing intellectual property rights.