By Onozure Dania
Lagos — A real estate firm, Afriland Properties Plc has filed a N13billion suit against Lagos state government before a Lagos state Multi Door Court House, over the termination of a Joint Venture Agreement (JVA) in the redevelopment of Falomo Shopping Complex, Ikoyi between the firm and Lagos State Development and Property Corporation. The firm, which instituted the suit through its lawyer, Chief Bolaji Ayorinde SAN claimed that Lagos state government terminated the contract which was awarded few years ago without following the due process.
The firm is asking for compensation to the tune of N5, 255, 770, 162.12 being the total aggregate of the project expenses incurred by it. Specifically, the firm is claiming the sum of N6, 248, 383, 382.62 being the loss of income due to it and which income has been interfered with and jeopardized by the wrongful act of repudiation of the JVA by the Corporation.
It is also asking for the sum of N1.5 billion being legal and consultancy fees now payable by it as a consequence of the wrongful act of repudiation of the JVA by the Corporation. During Governor Babatunde Fashola’s administration, a Joint Venture Agreement was entered between the Lagos State Government through the Lagos State Development and Property Corporation and Heirs Holdings Limited, Heirs Real Estate Limited for the redevelopment of Falomo Shopping Centre, Ikoyi, Lagos.
No sooner than a new administration under the same All Progressive Congress (APC) led government of governor Akinwunmi Ambode came into power, the JVA was terminated via a letter with reference No: SE: 01: 04: 004: Vol. V/15/15 from LSDPC dated August 21, 2015 claiming among others that the corporation (respondent) was not listed as a shareholder in the Memorandum and Articles of Association and therefore in breach of the provisions of Articles 14.1, 14.2.3 and 184.108.40.206 of the JVA.
Meanwhile the applicant through its lawyer, Ayorinde SAN is contending that the respondent’s letter is insufficient to terminate the JVA as it constitutes an event of default by the respondent under Article 14.2 and 14.2.2 of the JVA. The applicant contends that the respondent’s complaints with regards to the incorporation documents of the Special Purpose Vehicle (SPV) are clearly related to events post-execution of the JVA which disables the respondent from relying on Articles 14.1, 14.2.3 and 220.127.116.11 of the JVA as a basis for the purported termination of the JVA.
The applicant further stated that assuming without conceding that an event of default had occurred through the applicant; the respondent’s right to terminate the contract falls within Article 14.3 which states that: “without prejudice to the other rights or remedies that may be available to LSDPC under law or this agreement in respect thereof, upon the occurrence of a concessionaire event of default, LSDPC shall be entitled to terminate this agreement by giving at least a 60 days written notice of its intention to terminate this agreement (“Termination Notice”) to the concessionaire and provided that within the currency of the termination notice (“Termination Notice Period”) the underlying breach/default was not cured by the concessionaire.”