15 April 2018

Ethiopia: CBE Leverages Court Battle On Takeover Bid

The Cassation Bench of the Federal Supreme Court favoured the state-owned giant, the Commercial Bank of Ethiopia (CBE) that has been battling with Sagla Treading Plc over a breach of contract.

Justices of the Cassation Bench reversed the ruling of the High Court, which initially favours Sagla stating that the bank illegally terminated the bid it announced to sell Brale Farm after Sagla won the bid, on April 2, 2018.

The case was first initiated by Sagla three years ago at First Instant Court claiming that CBE breached the contract by cancelling a bid after Sagla has won the bid without a significant reason. CBE defended that Sagla does not have a legal ground to claim itself as a winner.

First Instant Court closed the case favouring CBE. Displeased with the ruling, Sagla appealed to the High Court, which later reversed the lower court's ruling. Finally, the Cassation bench over-ruled the decision of the lower court on the merit that a bid can be cancelled if the bidder has more advantage, which the bank has the right to do so.


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