Khomas Regional Council sued by car rental firm

Olivetti Car Rentals has dragged the Khomas Regional Council to court, demanding N$3.6 million it claims it lost after the council cancelled a three-year contract for the lease of 21 vehicles that was awarded in 2019.

The council has, however, instituted a counterclaim for N$78 682 or N$314 728 alternatively for liquidated damages they suffered since the vehicles were not delivered on time.

The vehicles included eight sedan cars that would have been leased for N$49 811 monthly; two 4x4 single-cab bakkies with canopies at N$20 681 monthly; two 4x4 single-cab bakkies with rails at N$20 451 monthly; four double-cab bakkies with canopies at N$44 541 monthly; and two 16-seater Quantum buses at N$24 243 monthly.

The others were one 22-seater bus at N$29 552 monthly, one-panel van at N$10 784 per month, and a four-to five-tonne Hino truck at N$24 000.

Contract adhered to

According to court documents, the company delivered only three vehicles in April 2019.

However, these vehicles were returned to them by the council, and the contract was ended in July 2019.

Olivetti Car Rentals insists they met all contract requirements and had made all necessary arrangements with its financiers and suppliers for the delivery of the remaining vehicles.

It is their view that the regional council had no lawful reason to cancel the contract between the two parties and should be ordered to honour the duties of the contract they signed.

We don’t agree

The regional council, however, pointed out that the first three double-cab 4x4 bakkies with canopies, delivered in April 2019, did not form part of this contract and were in fact leased on a separate short-term lease for 27 days, which was fully paid.

Council, on the other hand, explained in its particulars of claim that the contract was for a full maintenance lease for 36 months for 21 vehicles that should have been delivered within 30 days after the contract became effective.

The tender award letter gave them 60 days to deliver the 21 leased vehicles. However, they failed and neglected their duty to deliver the vehicles within the agreed time of 60 days, the council argues.

"Olivetti Car Rentals failed to comply with its obligation to carry out the services as required of it by the contract. They have, to date, failed to deliver any of the agreed upon 21 vehicles to the Khomas Regional Council. The 60-day period was to end on 21 April 2019," they state.

Lack of communication

According to the government attorney, a meeting was held on 29 March 2019 to discuss the progress of Olivetti Car Rentals with regard to the delivery of the outstanding vehicles, and the council was informed that a few logistics needed to be sorted out.

Olivetti Car Rentals allegedly requested a 10% upfront payment from the council, contrary to the contract they had entered into.

The rental company is also accused of having delayed the delivery and making several excuses, including asking for a 30-day extension.

"Olivetti Car Rentals was requested to provide a copy of the original order to the manufacturers and response letters from the financial institutions but failed to provide these. They were contacted by the procurement committee and the council on several occasions for a meeting but failed to avail themselves," the council states.

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