Your newspaper has published multiple news stories on the ongoing legal case between Prosper International Plc and Tekleberhan Ambaye Construction Plc (TACON), the most recent story headlined, “Prosper Loses Once Again at the Federal High Court” [Volume 17, Number 882, March 26, 2017].
The recent story unfortunately have failed to capture the crux of the matter in the case and in its entirety to shine a light on how the judiciary has failed a company of due justice. I am writing this, under the right of replay espoused in the law, in a bid to make the record straight for I believe this legal case, at its core, is about a breach of a legally binding contract. At worst, it is a travesty of justice, and all told a giant firm influencing the legal system to silence the voice of and trample on the rights of law-abiding citizens, who own the aggrieved company.
A legally binding contract was breached, with the complete disregard for the law, by TACON.
After all, who cares for the common man in a country where the wealthy think they can violate the law with impunity, or even believe that they own the law?
This injustice is what the company I established and manage has been battling for the last couple of years. It begins in May 2012, when my company, Prosper, entered into a contract with TACON. It was signed between the two parties for the provision by Prosper of two Wheel Loaders and a Dozer to be used by TACON for the duration of a project that involved land clearing and earth moving works for the construction of the Yayu Fertilizer Plant.
It was stipulated in the contract that the machines would be obligated to be operational for a minimum of eight hours a day, and that payment would be effected for the total hours used. It was further stipulated that if the machines remain idle for no other reason than lack of work order by the client, then the latter would still be obligated to pay for a minimum of eight hours a day. The machines were deployed after TACON advanced a partial payment for the use of each Loader for 400 hours and the Dozer for 500-hour.
TACON used the machines for four months until July 2012 before ceasing to engage the machines, and after using the Dozer for 661 hours (151-hour over and above what it had made a partial payment for). It had also used the Loaders on average for about 215-hour.
Prosper begun to request for the resumption of machinery use and to point out that TACON was contractually obligated to pay for the hours the machines were idle. It responded that it could not give work orders because the Yayu Fertilizer Plant Project owner, Metal & Engineering Corporation (MeTEC), had delayed payment and that there was a design change, compelling it to pause its works.
Prosper continued to engage TACON to find an amicable resolution for the payment it was owed; subsequently, in January 2013, TACON announced that it had sub-contracted its land clearing and earth moving works to Felema Construction Plc, a company owned by the younger brother of Teklebrehan Ambaye, the founder and major shareholder of TACON.
Felema approached Prosper given they were already on site, and a separate contract, independent of the contract with TACON, was signed between Felema and Prosper for the use of one Wheel Loader and one Dozer. Subsequently, a partial payment was made for the utilisation of each machine. The second Wheel Loader remained on site, idle, under the oversight of TACON.
Felema used the machines for the 500-hour it had paid the partial payment for and informed Prosper that it had concluded its works. It demobilized and returned the Dozer to Prosper, but left the Wheel Loader on the site because TACON had put a claim on both Wheel Loaders for the remaining hours for which partial payments were made.
Surprised by this development, Prosper informed TACON that its claims of unused hours are irrational as the reason the machines were idle is for no other reason than its failings to give work orders. Moreover, Prosper once again reminded TACON that it is contractually obligated to pay Prosper for the time the machines were idle.
A major disagreement began to arise.
Several attempts were made by Prosper to engage TACON to resolve this impasse amicably, even involving mediation by respected individuals. Face to face meetings was held with Tekleberhan Ambaye and Seifu Ambaye, the management team of TACON.
For a good eight months, Prosper made every effort to resolve the impasse. It was evident that TACON was externalizing its failure to fulfill the contractual obligations on MeTEC, a third party that had nothing to do with the contract.
With no hope of reaching an amicable solution, Prosper presented TACON with a legal notice in August 2014, seeking payments owed and the release of its machines. It responded with a counter legal notice in September 2014 seeking the return of its advance payment for the Wheel Loaders.
Knowing very well that it had failed to meet its legally binding contractual obligations, TACON started to pursue a strategy of offense with an attempt to knock Prosper off its balance and distract it from pursuing legal means. TACON took the case first to the Lideta High Court, suing Prosper for money owed amounting to 204,460 Br. Prosper contested the suit and filed a counter charge for 6,140.800 Br.
TACON argued in court that the contract it entered with Prosper was for only 500-hour for the Dozer and 400-hour each for the Wheel Loaders. This was a claim made in blatant contradiction to the contract’s stipulation of an indefinite period of use of the machines for the duration of the project, and against the fact that it had made a second payment for the utilization of the Dozer for more than 500-hour.
It also argued that it could not use the machines because they had mechanical failures. Both were bogus arguments. TACON did have no hesitations when using the Dozer for an additional 151-hour above, and beyond the 500-hour cap it was claiming in court. Moreover, at no point had TACON notified Prosper in writing of any mechanical failure whatsoever, which it was obliged to do according to its contract.
Because it could not furnish as evidence any written notice it had given to Prosper, it instead presented to the court a timesheet that logs the operational activities of the machines. The timesheet, however, does not prove the machines had any mechanical failure; to the contrary, they show that TACON was actually using them even during the rainy season.
TACON also argued in court that it was forced to suspend all operations due to torrential rains and that in addition to the alleged mechanical failure, it could not have engaged the machines due to this “force majeure.” It presented as evidence a letter its managers had written in July 2012 to MeTEC that stated suspension of operations as of July 2012. Yet, the time sheet showed that Prosper’s machines were in use until the end of the month.
This material evidence, albeit contradictory, were proof of TACON`s deception at two levels that was ignored by the court: It can hide behind a letter when it helps serve its purpose, in this case, to falsely notify MeTEC that it has suspended operations when not. It also argued it did not have an obligation to write a letter when breaking a legally binding contract, in this case, to continue to use Prosper’s machine and later falsely claim there was a mechanical failure.
With such blatant violations of the law crystal clear even to the eyes of the layman, in a ruling that renowned legal experts have called “a defamation of the sanctity of contract law,” the Lideta High Court, presided by Judge Endeshaw Adane, ruled the case against both parties.
On the one hand, the Judge rejected Prosper’s claim for payment because the hours agreed for advance payment is what governs the contract, and not the indefinite period of use that is stated in the contract. On the other hand, it rejected TACON`s claim of machinery failure on the grounds that it did not notify this incident in writing.
Appalled by such travesty of justice, Prosper appealed its case to the Supreme Court, which did not take too long to agree with the appeal and overrule the lower court. It sent the case back to the Lideta High Court, ruling the case be litigated again, and in particular, the reason behind the non-use of the machines to be appropriately examined.
However, the Supreme Court, instead of using the words “machines,” which would have included both the Wheel Loaders and the Dozer, it used the word “loaders”. The lower court thus excluded the Dozer from the new round of litigation because it can only follow the ruling by the Supreme Court’s to the letter.
Prosper immediately wrote the Lideta High Court for clarification on the issue of inclusion of all machines that were contracted out to TACON, while in parallel appealing to the Supreme Court for clarifications on the language in its ruling. The Supreme Court denied Prosper’s motion but ruled that a request for clarification could come directly from the Lideta High Court.
Judges at the Lideta High Court wrote a letter to the Supreme Court, seeking clarification on whether or not the Dozer should be included. The Supreme Court responded, in what renowned legal experts have described as a very surprising ruling, that there was nothing to clarify, putting Prosper in a legal limbo.
Prosper then took the case to the President of the Federal Supreme Court with a letter written in November 2017. The President strongly suggested that the case should be looked at by the Court of Cassation.
The Court of Cassation examined the matter and decided that there was no legal error in the proceedings of the Supreme Court and that there was nothing that needed further clarification. This effectively puts the case of the Dozer out of the new litigation, denying Prosper its constitutional right to have its full case considered.
Despite this legal limbo, Prosper continued the litigation at the Lideta High Court. TACON continued its deception, this time with blatant witness tampering. It informed the Lideta High Court that it cannot produce its two witnesses that it had initially listed during the first round of litigation, claiming that one had died and the other could not be found. Instead, on the day of witness hearing, it presented a new witness, who during the first round of litigation, was listed as Prosper’s witness.
This witness, a close family of the shareholders of Prosper International Plc, used to be the operator of one of Prosper’s machines but had since the first round of litigation left the company due to disagreements. This witness was now conveniently hired by TACON.
The Presiding Judge at the Lideta High Court ruled the case for TACON solely based on the testimony of this witness, who claimed that the machines had mechanical failures and could not be operated. The Judge never asked for any evidence of a written notification to Prosper that its machines were not working, instead relying on this controversial witness. The Judge should have examined the credibility issue of this witness, yet he chose to accept a witness that had lied to his bench.
Another interesting ruling that has confounded legal experts is the Judge’s decision that TACON cannot seek recovery of its advance payment because it has never notified Prosper in writing. The irony could not be more comical. The Judge somehow found it alright for TACON to break a legally binding contract without informing Prosper in writing of the alleged machinery failure, yet he had an issue with the fact that TACON did not inform Prosper in writing about its advance payment recovery.
A violation of contract law, the bedrock of any society that has transitioned to middle-income country status, sadly has been dismissed by a Judge.
What then is the relevance of entering into contractual agreements if the law cannot enforce it? What is the significance of the court system if it cannot hold to account those who break legally binding contracts? What message does that send to all law-abiding citizens of this country? What message does that send to all those who fought and died for the rule of law? What image does this send to the countless of foreign investors this country is trying hard to attract?
If contracts cannot be protected by those who are expected to enforce the law, if those that break contracts are not held to account by the courts that are supposed to administer justice, then can we really say we have the law to protect us?
The Reverend Martin Luther King aptly said, “Injustice anywhere is a threat to justice everywhere.” The injustice meted out on Prosper, with undue influence on the judicial system, is a threat to justice for all.
Prosper International PLC.
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