FERRERE successfully represented Pharmatech, a major pharmaceutical company in Bolivia, in a judicial action against the state-owned Hospital de Clínicas in La Paz.
The dispute focused on the legal validity and the applicability of two conflicting contract terminations, issued almost simultaneously, but on different grounds. It also involved administrative sanctions that had prevented Pharmatech from participating, temporarily, in public tender processes.
Under the administrative contract, Pharmatech was responsible for supplying a pharmaceutical product, while the Hospital had the obligation to obtain the necessary licenses and import authorizations from Bolivia's national pharmaceuticals agency (AGEMED). Following repeated nonfulfillments of this obligation, Pharmatech formally terminated the contract, alleging breaches attributable to the public entity. At almost the same time, the Hospital denied any irregularity and unilaterally issued its own contract termination, to neutralize the legal effects of Pharmatech’s earlier termination, and consequently imposed a series of administrative sanctions against the company.
The fundamental issue in the case was to determine which of the two terminations was legally valid, and what consequences it would have for the parties involved. Thus, Pharmatech filed an action requesting judicial validation of its termination, while the hospital filed a counterclaim requesting declaration of nullity of the Pharmatech decision. The litigation also aimed to annul the administrative sanctions imposed on Pharmatech.
In a key victory for the client, the Third Administrative Claims Chamber of the Departmental Justice of the Peace Court ruled in favor of Pharmatech, confirming the legal validity of its decision, and annulling the subsequent contract termination by the Hospital. More importantly, the decision ordered elimination of all of the related administrative sanctions, which guaranteed a clean record for Pharmatech in Bolivia’s national government procurement system (SICOES), a fundamental requirement to be able to participate in future public tenders.
The Hospital brought an appeal before the Supreme Court of Bolivia, but due to various formal procedural defects the appeal was rejected, which confirmed the decision in favor of Pharmatech.
FERRERE’S work was headed up by the partner leading the dispute resolution team in Bolivia, Diego Villarroel, together with Erick Vargas, Daniela Arteaga, Ericka Mendoza, Tamara Monroy and María Laura Aguirre.