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Auto company sues Delta govt over alleged N90m debt

An automobile company, Chery Motors Nigeria Ltd, has dragged the Delta State government before a Delta State High Court, for allegedly failing to pay N90million for the 49 cars supplied to it (Delta) for the Delta State Integrated Development Agency scheme in 2008. Meanwhile, hearing in the matter will continue on Monday.

Also joined as defendants in the suit are the Governor of Delta State, Delta State Integrated Development Agency, Mrs Godwin Akpobire and Accountant General, Delta State.

Meanwhile, the company is also praying the court to order the defendants to remove the cars from circulation and park same in the premises and authorising the bailiffs of court with the support of law enforcement agencies to remove the Chery BYD cars currently branded in Delta State colour from the office of the defendants and anywhere else in Delta State where they may be parked or being used as taxi to warehouse same in the premises of the court or for preservation pending the final determination of the suit.

The company is also asking the court for an order mandating the defendants by way of interlocutory injunction to pay into the court, the sum of N120million, being the contractual sum owed the company with interest or deposit such security or guarantee with the court, pending the determination of the suit.

It will be recalled that in 2008, the Delta State government established the Delta City Taxi Project to improve transportation in the state and to achieve this, the Delta State Integrated Development Project, directly run from the Governor, Emmanuel Uduaghan’s office, approved N195million for the purchase of 50 cars and 50 buses to launch the project.

The chairman of the taxi project, Godwin Akpobire, then awarded the contract to Chery Motors Nigeria and Chery Motors was to be paid “within five banking days after delivery (of the vehicles) to Asaba”. According to the company, after accepting the offer, it obtained loans from two banks to supply the first 50 cars. But on December 19, 2008, on its way  to deliver the cars to the Governor’s office, one of the cars had an accident in Benin, so only 49 Chery BYD model cars were handed over to Mr. Akpobire that same day. Chery Motors is contending in the suit that till date, no kobo had been paid to it, which is in clear violation of the terms of the contract between parties.

It is also asking the court to declare that the defendants breached the contracts entered into with the claimant for the supply of vehicle by neglecting to pay the contractual sum agreed upon by both parties five days after delivery of the vehicles. The company is also urging the court to direct the defendants to pay it (claimant) the sum of N90m, being the sum mutually agreed by all parties as being owed, outstanding and payable by the defendants to the claimant and an order directing the defendants to pay the claimant interests on the sum owed and outstanding at the rate of 21% per annum from December 31, 2008.

The company is also claiming N30m as special damages for the economic loss visited on it by the unlawful negligence of the defendants, and N10m as general damages for breach of contract by the defendants and N5m cost of prosecuting the matter.

The company had predicated the reliefs it is seeking on the fact that defendants neglected to make payment whatsoever for the cars delivered within five days of the delivery and neither was any payment made at all 12 months after delivery and till date.

The company is further contending that the wilful negligence of the defendants, despite several promises and pledges of payment constituted a flagrant breach of the contract entered into by both parties, which contractual terms were evidence by a valid offer, acceptance and executed by the claimant, adding that the breach of the existing contract by the defendants had occasioned severe economic loss to it, which interest remains counting, while its creditor banks are hounding it for payment and interest  continue to mount and currently stands at about N30m, which sum increases daily as the facility remains unpaid.

Mr Matthew Anene, a branch manager with the automobile company, in an affidavit in support of the suit, is contending that the company had explored other means to implore the defendants to make the required payments, but the defendants are adamant and remained unperturbed.

Urging the court to grant the orders sought against the defendants, the company argued that its economic loss were occasioned by the defendants, who refused and willfully deprived it of its contractual sum owed, instead severely impoverishing it and bankrupting it without any beacon of survival in sight.


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