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Wednesday, 6 September 2017

N180m Contract Debt Judgment Sparks Management Row in ECOWAS Commission

N180m Contract Debt Judgment Sparks Management Row in ECOWAS Commission

ECOWAS Court

* Court determines appeal Oct 12

Management staff of the Economic Community of West African States (ECOWAS) Commission are currently exchanging blame over factors that led to the commission incurring a contract debt to the tune of N180m.

The debt was incurred following the failure of the commission to pay a contractor -Vision Kam-Jay Investment Ltd for services rendered to the commission.

The commission had on November 11, 2014 awarded two contracts to the firm for the supply, installation and maintenance of two 15 KVA inverters for power and associated equipment at its Niger House and River Plaza Server Room both in Abuja.

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The contract was awarded in two tranches of N35.7million and N20.6million to make a total N56.4million contract sum and at a completion period of four weeks,

The contractor, Vision Kam-Jay Investment Ltd was said to have executed the jobs within the period and to the specification as contained in the contract paper signed by the Commissioner General, Administration and conference Mr. Stephen Nartey.

Upon completion, he was issued a job completion certificate dated December 18, 2014 jointly signed by the Director, Community Computer Centre Mr. Osei Tutu and a Programme Officer, ICT Folake Olagunju Oyinda, to clear him for payment in line with the contractual agreement endorsed by the commission and the contractor.

However, trouble started when the commission, in breach of the agreement, made the first tranche payment of N35.7million and ignored the second tranche of N20.6million despite several demands.

The trouble got to the peak when the contractor through its counsel Mr. Ocholi James, (SAN) dragged the commission before the ECOWAS court on December 8, 2015 and prayed for order of the court compelling the commission to pay the contractor the outstanding N20.6million and 10 per cent interest per day on the amount from April 16, 2015 till the debt is liquidated.

In the court action, the plaintiff also demanded N500million as general damages.

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The contractor claimed to have lost its partnership with its American counterpart and operational certificate due to refusal of the commission to honor the debt.

However, in the judgment of October 6, 2016, the ECOWAS court found the commission liable for breach of contract and ordered it to pay the plaintiff the N20.6million principal contract sum and one per cent interest per day from April 16, 2015 till the judgment debt is fully liquidated.

As at April 16, 2015, the commission had delayed payment for 120 days in breach of the contract agreement provisions.

The three-man panel of Justices on Friday, Chijioke Nwoke, Micah Wilkins Wright and Yaya Boro, counselled the commission to always exhibit responsibility and commitment in executing contracts in future.

The Justices in their unanimous judgment noted that the unfortunate laxity on the part of officers of the commission occasioned the losses to the defendants.

But rather than complying with the court verdict, the commission filed a notice of appeal to the same court praying for a review of its judgment of October 6, 2016.

Although judgment in the appeal was fixed for October 12, 2017, the commission ahead of the judgment day, opted for out of court settlement with the plaintiff and convened a high powered meeting on May 8, 2017 attended by its management and lawyers to the contractor.

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In the resolution of the meeting signed by the Commissioner in-charge of General Administration and Finance Mr. Stephen Nartey and the Director, Legal Affairs, Mr. Daniel Lago, for the commission and Mr. John Uttuh Junior for the contractor, both parties agreed that as at May 15, 2017, the sum of N178.2million had accrued from the judgment debt to be paid to the contractor.

However, after persuasion and negotiation, the contractor made concession and agreed to accept N20.6million as the principal sum and N150million as the accrued interest totaling N170.6million and which the commission agreed to pay.

The commission agreed to first pay up the N20.6million principal sum and the N150million balance in two installments of N75million by July and September 2017.

In another breach of agreement however, the commission settled the N20.6m principal sum and refused to honour the N150m balance in flagrant disobedience to the orders of the ECOWAS court made on October 6, 2016.

In a buck-passing game, the commission in an internal memo to the President of the Commission took swipe at the Financial Controller of the commission for being responsible for the plight of the commission with refusal to pay the contract debt on time to the contractor.

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