The Tribunal of the Trade Competition & Consumer Protection Authority is hearing litigations between two major players in the automated teller machines market in Ethiopia, in which a local company is trying to push out of the market a company that might be a foreign company.
These companies are Moti Engineering Plc, a local IT vendor, and CBM Integrates Plc, which is a locally registered company that is related to CBM Lebanon, a foreign company. The controversy between the two started, following the complaint to the Authority by CBM that Moti had caused its removal from bids for the supply of the banking machines.
In recent times Moti has won a number of bids, including 400 ATMs for CBE, 30 for Oromia International Bank S.C. and other private banks, adding up to a total of 1,536 ATMs it had supplied over the years. CBM has delivered a total of 460 machines so far, including 200 for CBE, 50 for the Bank of Abyssinia, 100 for Awash Bank S.C., 50 for United and 60 for Premium Switch Solution, which is a formed by a consortium of private banks.
CBM first filed its complaint in March 2015, it had indicated that it specialized in system integration and data centre services as well as the supply of and maintenance of ATMs, for which it claimed to have both an investment and trade licence.
But then it has accused Moti of plotting against its interests. In 2014, when the Commercial Bank of Ethiopia (CBE) invited bidders for the supply of 200 ATMs, Moti told the Investment Commission in a letter sent in October 2014, that CBM did not have the licence for the business it claimed it was engaged in.
The Ethiopia Investment Commission wrote a letter to the Ministry of Trade, which wrote to the central bank, forcing CBM out of the bid process. Moti succeeded to have the same happen to CBM when Wegagen Bank announced another tender for the supply of ATMs.
CBM told the Tribunal that Moti’s acts had violated Article 8, sub article 2C of proclamation number 813/2013, distorting fair competition and negatively impacting its businesses. It asked for a favourable decision based on Articles 32 and 42 of the same proclamation, as well as claiming 16,500 Br for its legal expenses.
This led to a response from Moti on October 3, 2015, in which it had claimed that CBM Integrates was never part of any bid to supply ATMs, that it merely did maintenance works for the ATMs supplied by CBM Lebanon. On October 29, 2015, it submitted a modified response claiming that CBM had been foreign investors until it became a local company in January 2015. It added that both as a foreign and local company, CBM was engaged in wholesale and retail trade and maintenance. The investment and trade licences with which CBM were operating, were obtained from the Investment Commission, Ministry of Trade and Addis Abeba Trade & Industry Bureau, but the licences were not valid, it argued, because they were issued based on the null and void proclamation number 280/2001/02. And after it became a local company, it operated without returning incentives and licences to the authorizing body. In the midst of all this CBM secured a maintenance licence.
Moti asked the jury to ban CBM from conducting business locally since foreign companies are not allowed to engage in maintenance work, according to the investment regulation number 270/2012. Because there is no directive on this issue CBM has unfairly won bids, claims Moti, costing it revenue which it could have rightly made. Moti requested the establishment of a committee to determine its losses because of the unfair trade.
In countering this claim from Moti, CBM responded that the Administrative Tribunal has no jurisdiction to investigate how either investment or business licences had been issued. It requested the jury to reject Moti’s claim on this.
It was also heard that CBM has requested the Tribunal to reject Moti’s proposal of auditing its loss by an independent committee caused by the unfair trade and completion.
The Tribunal, which heard the litigations on November 20, has adjourned the case for December 7, 2015.
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