ECOWAS Commission in 180m Contract Debt Crisis… faces another Court Verdict Oct. 12

The Economic Community of West African States (ECOWAS) Commission is enmeshed in a contract debt of N180M that has pitched its management officers against one another in an internal dispute.

The debt was incurred in two contracts awarded by the commission on November 11, 2014 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.

Awarded in two tranches of N35.7M and N20.6M to make a total N56.4M contract sum and at a completion period of four weeks, the contractors-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.

A job completion certificated dated December 18, 2014 jointly signed by the Director, Community Computer Centre Mr. Osei Tutu and a program Officer, ICT Folake Olagunju Oyinda was issued to the contractor 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 N35.7M and ignored the second tranche of N20.6M 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 N20.6M and 10 percent interest per day on the amount from April 16, 2015 till the debt is liquidated.

In the court action, the plaintiff also demanded N500M as general damages.

The contractor claimed to have lost to 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 N20.6M principal contract sum and one percent 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 3-man panel of Justices of Friday Chijioke Nwoke, Micah Wilkins Wright and Yaya Boro counseled 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.

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 N178.2m 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 N20.6m as the principal sum and N150m as the accrued interest totaling N170.6m and which the commission agreed to pay.

The commission agreed to first pay up the N20.6m principal sum and the N150m balance in two installments of N75m 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.

The memo authored by Mr. Stephen Nartey, the commissioner for General Administration and Conferences and titled “Re: – Court judgment against the ECOWAS commission” informed the ECOWAS President how the Financial Controller vetted and the sanctioned contracts before they were signed.

The memo noted that “after the supplies were made by the contractor and the time of payment arrived, the Financial Controller (FC) then decided to impose amount that must be paid to the supplier contrary to what is in the contract”

“The Director of Legal Affairs advised against the FC’s conduct but he refused to back down. Since all payments must be sanctioned by the Financial Controller, his refusal to sanction payment blocks action on that transaction which led the supplier to resort to court for redress”.

“This court case is a self-inflicted case and any penalties resulting from the court case are also self-inflected.

The memo asked the ECOWAS President to hold those who refused to sanction the payment and insisting on going to court against legal advice personally responsible and liable for the payment of any penalties in the form of interest and damages”

However one of the lawyers in the matter Mr. Edward Emmanuel said that holding anybody responsible is purely internal affairs of the Commission and that the ECOWAS court judgment is binding on the commission and not on individual and pleaded with the common to honour the payment instead of buck-passing.

The counsel opined that the Commission’s President, having endorsed the debt for payment should ensure that the court judgment is implemented in the interest of the rule of law and natural justice.

Meanwhile the ECOWAS court will October 12 give judgment in the appeal filed by the commission in respect of the judgment debt.