4 February 2018

Ethiopia: Country Trading Defeats Enterprise, Reclaims Bid Bond

The Enterprise had taken 640,000 Br of Country's bid bond as penalty

The Federal High Court has ruled in favour of Country Trading Plc, over Ethiopian Airports Enterprise (EAE) in a court battle over the cancellation of a bid for renting nine duty-free shops at the latter's premises.

The Court overruled the decision of the Enterprise, which recently merged with Ethiopian Airlines to form Ethiopian Airlines Group, to cancel the bid and suspend Country Trading from participating in any of its tenders for half a year.

The Court also ordered returning the 640,000 Br bid bond which the Enterprise held back as penalty and dropped the counterclaim by the state enterprise that Country owes 9.2 million Br in lost rent from the shops during the entirety of the court battle, where it was prohibited from announcing another bid.

Country Trading owns Duty Free shops at Bole International Airport including the Millennium, and was established three decades back. It filed a suit against the Enterprise on January 25, 2016, reclaiming its bid bond and the cancellation of the tender.

Following a tender floated by the defendant on August 25, 2015, Country offered to rent duty-free shops on commission basis with the Enterprise. Country Trading was announced as the winner for nine shops out of the ten up for grabs, where it offered up to 92pc of its gross annual revenues to the Enterprise.

"The claimant then asked the Enterprise for more details on the terms of contract, for the nature of the agreement was new," Country's claim reads.

The defendant ignored the request and instead cancelled the tender on December 16 for failure to sign the contract within 10 days notice.

The Enterprise then took the bid bond as a penalty and suspended Country from participating in any of its bids for six months.

The Enterprise, for its part, argued that it was within its full rights to suspend and take the bid bond as a penalty for Country failed to conclude its agreement. The defendant further contended that the claimant's call for detail to the Enterprise's query over operations and pricing was a deliberate act to delay procedures since the plaintiff is aware of the agreement and what it entails.

The defendant counterclaimed for the damages caused as a result of an injunction not to bid for the nine shops until a decision was made, which both Supreme Court and Cassation Bench sustained.

The Seventh Civil Bench of the Federal High Court passed the judgment on January 2, 2018, after reviewing the statements and evidence and hearing the oral litigation.

The presiding judge, Abdisa Dashura, ruled that the letter written by Country on November 27, 2015, requesting the EAE for further clarification of the contract cannot be ground for cancelling the bid or taking the bid bond as a penalty. The Court ordered the Enterprise to return the money while dropping its request for compensation for financial damages.

GebreAmlak Gebregiyorgis, Country's lawyer, and Mulutsega Bekele, manager of Legal & Ethics Affairs at the Enterprise, both declined to comment on the issue.

Ethiopia

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