6 July 2014

Ethiopia: Orchid's Br42 Million Legal Wrangle Stems Revenue Flow

The issue stems from money Orchid owes to Yonas Kassahun for services rendered during the South Sudan independence anniversary

Habte Fichalla, the vice president of the Lideta High Court, passed an order of injunction ordering Salini Construction to delay paying the rental fee on 12 trucks to Orchid Business Group Plc in a 42 million Br litigation involving Orchid and Yonas Kassahun - an Ethiopian Diaspora from Germany.

Orchid, owned by Akiko Seyoum, is a family of companies engaged in road construction, the supply of construction materials, rental services of construction machinery and transportation. Orchid was the subject of lawsuit filed by Yonas on November 5, 2013, in which he claimed that Orchid had denied him payment of 42 million Br for equipment it supplied for a contract from the government of South Sudan to prepare for the celebration of that country's Independence Day anniversary in 2011. The high court ruled, on June 9, 2014, that Orchid should pay Yonas the 42 million Br he claimed.

On June 13, Yonas moved for implementation of the ruling, getting a court order to stop Salini Construction from making payments to Orchid for the machinery it rented for use at the construction of the Grand Ethiopian Renaissance Dam (GERD). These 12 items of machinery, worth 56 million Br, had been under injunction for months.

Orchid claimed that the revenue it collected from Salini is a salary payment for its workers on the machines at the GERD project site. Orchid requested that the court ban should be reversed. The high court accepted Orchid's request on July 3, 2014, and reversed the ban, enabling Orchid to collect the rent fee from Salini. However, the High Court's vice president, Habte Fichall, suspended the ruling for 15 days on Friday July 4, 2014, until Yonas is able to appeal to the Supreme Court against the ruling that allowed Orchid to collect rent.

On the same day, the general manger of Orchid, Akiko, wrote an appellate application to the President claiming that the ban has been made illegally and will force her company to drop its work at the Dam because it would be unable to pay the salary of the workers. She asked the court to cancel the Vice President's ban and let her company collect the rent.

While Yonas is yet to take his case to the supreme court, he has been served with a summon ordering him to give response on July 8, 2014.


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