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Verdict on ECOWAS contract debt suit for Oct. 12

The Court of the Economic Community of West African States (ECOWAS) will on Thursday, October 12, 2017 give judgment in an appeal filed by the ECOWAS Commission.

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ECOWAS headquarters

The appeal is as a result of the contract crisis arising in respect of a N180 million judgment debt, which the Commission is enmeshed in.

The said debt was incurred in two contracts awarded by the Commission on November 11, 2014 for the supply, installation and maintenance of two 15 KVA inverters for power and associated equipment at its Rivers Plaza and Niger House Server Rooms, both in Abuja, Nigeria.

The contract was awarded in two tranches of N35.7 million and N20.6 million at a total N56.4 million-contract sum with at a completion period of four weeks.

The contractor, Vision Kam-Jay Investment Ltd, was said to have executed the jobs within the period and to specifications as contained in the contract paper signed by the Commissioner General, Administration and Conference, Mr. Stephen Nartey.

Thereafter, a job completion certificate dated December 18, 2014 jointly signed by the Director, Community Computer Centre, Mr. Osei Tutu, and an ICT Programme Officer, Folake Olagunju Oyinda, was issued to the contractor to clear him for payment in line with the contractual agreement endorsed by the commission and the contractor.

The Commission, however, allegedly breached terms of agreement when it made the first tranche payment of N35.7 million and ignored the second tranche of N20.6 million despite several demands.

The peak of the matter was reached when the contractor, through its counsel, Mr. Ocholi James (SAN), dragged the Commission before the ECOWAS Court on December 8, 2015 and prayed for an order of the court compelling the commission to pay the contractor the outstanding N20.6 million and 10 percent interest per day on the amount from April 16, 2015 till the debt is liquidated.

The plaintiff, in the court action, also demanded a sum of N500 million as general damages.

The contractor claimed to have lost to its partnership with its American counterpart and operational certificate due to refusal of the commission to honor the debt.

However, in the judgment of October 6, 2016, the ECOWAS Court found the commission liable for breach of contract and ordered it to pay the plaintiff the N20.6 million principal contract sum and one percent interest per day from April 16, 2015 till the judgment debt is fully liquidated.

The commission, as at April 16, 2015, had delayed payment for 120 days in breach of the contract agreement provisions.

The Community Court’s three-man panel of Justices Friday Chijioke Nwoke, Micah Wilkins Wright and Yaya Boro, further in its verdict, counseled the Commission to always exhibit responsibility and commitment in executing contracts in future.

The Justices in their unanimous judgment noted that the unfortunate laxity on the part of officers of the Commission occasioned the losses to the defendants.

The ECOWAS Commission, rather than complying with the court verdict, filed a notice of appeal to the same court praying for a review of its judgment of October 6, 2016.

Although judgment in the appeal was fixed for October 12, 2017, the Commission ahead of the fixed judgment date opted for an out-of-court settlement with the plaintiff and convened a high-powered meeting on May 8, 2017 attended by its management and lawyers to the contractor.

In the resolution of the meeting signed by the Commissioner-in-charge of General Administration and finance, Mr. Stephen Nartey, and the Director, Legal Affairs, Mr. Daniel Lago, for the Commission and Mr. John Uttuh Junior for the contractor, both parties agreed that, as at May 15, 2017, the sum of N178.2 million had accrued from the judgment debt to be paid to the contractor.

However, after persuasion and negotiation, the contractor made concession and agreed to accept N20.6 million as the principal sum and N150 million as the accrued interest totaling N170.6 million, which the Commission agreed to pay.

The Commission agreed to pay up the N20.6 million principal sum first and then the N150 million balance in two installments of N75 million by July and September 2017.

The Commission, however, in another breach of agreement, settled only the N20.6 million principal sum and failed to honour the N150 million balance.

The Commission, in an internal memo to the President of the Commission, took a swipe at the Financial Controller of the Commission for being responsible for the plight of the Commission by his refusal to pay the contract debt on time to the contractor.

The memo, authored by Mr. Stephen Nartey, the commissioner for General Administration and Conferences, titled: “Re: Court judgment against the ECOWAS commission”, informed the ECOWAS President how the Financial Controller vetted and the sanctioned contracts before they were signed.

The memo noted that “after the supplies were made by the contractor and the time of payment arrived, the Financial Controller (FC) then decided to impose amount that must be paid to the supplier contrary to what is in the contract”

It further read: “The Director of Legal Affairs advised against the FC’s conduct but he refused to back down. Since all payments must be sanctioned by the Financial Controller, his refusal to sanction payment blocks action on that transaction which led the supplier to resort to court for redress.

“This court case is a self-inflicted case and any penalties resulting from the court case are also self-inflected.”

The memo further asked the ECOWAS President to hold those who refused to sanction the payment and insisting on going to court against legal advice personally responsible and liable for the payment of any penalties in the form of interest and damages.

However, one of the lawyers in the matter, Mr. Edward Emmanuel, said that holding anybody responsible is a purely internal affair of the Commission and that the ECOWAS Court judgment is binding on the Commission and not on individual. He pleaded with the Commission to honour the payment instead of buck-passing.

The legal counsel opined that the Commission’s President, having endorsed the debt for payment, should ensure that the court judgment is implemented in the interest of the rule of law and natural justice.

Meanwhile the ECOWAS court will give judgment in the appeal filed by the commission in respect of the judgment debt on October 12, 2017.

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