The case has been adjourned twice as the two parties attempted to find an amicable conclusion themselves
After seven months of negotiation towards an amicable settlement of the dispute between them, the Ethiopian Roads Authority (ERA) and United Insurance Company S.C are to take the battle back to the court.
The ERA filed a suit against United on July 24, 2013, following the termination of a road construction contract it had given to Tibebe Construction Plc on February 3, 2009 at an outlay of 546.9 million Br. United was a guarantor both for the advance payment extended to the contractor and for the due performance of what was provided in thecontract.
The deal was to construct a 47 km road extending from Sanja to Kerkera, in the North Gondar Zone of the Amhara Region. It was planned to be completed in three years.
Nonetheless, the contractor did not finalise it within the agreed period. Consequently, the authority extended the period for an additional six months, at the end of which the contractor was able to perform only 55.3pc of the total project. This led to the termination of the deal on February 13, 2013.
The remaining work was later awarded to the China Railway Engineering Group (CREG) on March 5, 2014, at a cost of 786.8 million Br.
Following the termination, the ERA filed a suit to the Federal High Court's 6th Civil Bench, claiming a payment of 139.2 million Br by theguarantor, United Insurance. This was for the 84.5 million Br advance payment paid to the contractor and 54.7 million Br pledged by the guarantor as a performance bond. The remainder was made up from nine percent legal interest.
The ERA paid to the contractor a total of 123.6 million Br as an advance payment, including the 24.9 million Br for the purchase ofconstruction materials, says its charge. Out of this sum, the Authority was able to recollect 39 million Br in the form of deductions from payments made to the contractor for the works it had done according their deal.
United responded to the charge on October 16, 2013, and the oral proceeding was set to take place on November 21, 2013. On that day, however, the parties told the court that they were conducting negotiations to settle the problem amicably.
United also presented a copy of a Certified Payment Order (CPO), evidencing that it has already issued a payment order of 52.6 million Br for the ERA in accordance with the advance payment bond it extended to the contractor, although the plaintiff did not withdraw its charges.
In a positive response to the demand of the parties to extend the oral hearing so that they could reach a negotiated end, the court has adjourned the case twice between November 21, 2013 to May 21, 2014.
Nonetheless, when the parties appeared at the court last Wednesday, the expected amicable settlement was not brought to the judicial Bench presided by judge Shamsu Sirgaga.
Rather, the insurer came up with a petition requesting for the addition of Tibebe construction plc as a defendant in the suit. Judge Shamsu adjourned the case until May 30, 2014 to give a ruling on the question forwarded by United.
http://allafrica.com/stories/201405290487.html
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