Keetmanshoop in N$4.3m lawsuit battle
Netvend Metering Solutions is suing for the contract termination to be declared unlawful, and asking that the court order the municipality to comply with the contract within 15 days, or pay millions.
JANA-MARI SMITH
WINDHOEK
The finalisation of a settlement related to an alleged multimillion-dollar contract breach by the Keetmanshoop municipality for the installation of 1 000 pre-paid water meters has stalled following the expulsion of three town councillors.
Settlement talks arose after Netvend Metering Solutions CC sued the municipality in July last year for the alleged breach of a N$4.3 million contract signed in 2020 for the installation of pre-paid water meters at the town.
In January this year, the two parties informed the court that they had started settlement talks.
However, ahead of this week’s court appearance date, the parties asked that the case be postponed as the municipality could not green-light the agreement after three Landless People’s Movement (LPM) seats were vacated over the past two months.
Keetmanshoop CEO Desmond Basson informed the court that he is “unable to sign the settlement agreement as he needs a council resolution. No council meeting can be convened as three councillors were recalled by their political party”.
LPM in late December withdrew former mayor Maree Smit. In January, the party withdrew two more councillors, Sydney Skakana and Willie Kisting.
The court on Tuesday postponed the case to 29 March to give allow the parties time to finalise the settlement agreement.
The details of the potential settlement have not yet been made public.
Breach
The lawsuit claims the municipality owes Netvend Metering Solutions N$4.3 million after it failed to uphold their contract.
The company is suing for the contract termination to be declared unlawful, and asking that the court order the municipality to comply with the contract within 15 days, or failing that, for the municipality to pay the N$4.3 million owed.
The municipality awarded the tender to Netvend in March 2020.
Court papers show that the contract was cancelled by the municipality in April 2021. In response, Netvend accused the municipality of unlawfully cancelling the contract.
Netvend’s court papers alleged that the municipality’s termination of the contract was preceded by changes to the scope of the work initially agreed upon.
One of those alleged changes was the municipality’s request that Netvend only supply the meters, and the municipality would install them itself.
Denial
Netvend informed the court that these requests for changes led to discussions around the furnishing of a performance security by the company.
Lawyers for Netvend wrote that while these discussions were ongoing, the municipality suddenly terminated the contract.
“The said cancellation was despite the fact that the parties were discussing the aspect of the performance security, and that the municipality never, in light of the discussion, demanded that our client furnish the performance security or risk having the contract terminated. If it were not for the municipality’s conduct in changing the scope, our client would have provided the performance security already.”
Letters between the parties show that the municipality denied changing the scope of the project, and instead claimed that the performance guarantee was not provided despite requests on several occasions.
Settlement talks
The municipality in October last year filed a plea denying it was in breach of contract, and argued that without the performance guarantee, which was a material condition of the agreement, work on the project could not start.
Further, that a variation order for reduction of work was never issued by the municipality.
At the time, CEO Basson asked that the court dismiss the claim with costs.
By January, however, the parties informed the court of settlement talks.
The case is being heard by High Court judge Shafimana Ueitele.
Netvend is represented by Appolos Shimakeleni, while the municipality is represented Melvin Harmse.
WINDHOEK
The finalisation of a settlement related to an alleged multimillion-dollar contract breach by the Keetmanshoop municipality for the installation of 1 000 pre-paid water meters has stalled following the expulsion of three town councillors.
Settlement talks arose after Netvend Metering Solutions CC sued the municipality in July last year for the alleged breach of a N$4.3 million contract signed in 2020 for the installation of pre-paid water meters at the town.
In January this year, the two parties informed the court that they had started settlement talks.
However, ahead of this week’s court appearance date, the parties asked that the case be postponed as the municipality could not green-light the agreement after three Landless People’s Movement (LPM) seats were vacated over the past two months.
Keetmanshoop CEO Desmond Basson informed the court that he is “unable to sign the settlement agreement as he needs a council resolution. No council meeting can be convened as three councillors were recalled by their political party”.
LPM in late December withdrew former mayor Maree Smit. In January, the party withdrew two more councillors, Sydney Skakana and Willie Kisting.
The court on Tuesday postponed the case to 29 March to give allow the parties time to finalise the settlement agreement.
The details of the potential settlement have not yet been made public.
Breach
The lawsuit claims the municipality owes Netvend Metering Solutions N$4.3 million after it failed to uphold their contract.
The company is suing for the contract termination to be declared unlawful, and asking that the court order the municipality to comply with the contract within 15 days, or failing that, for the municipality to pay the N$4.3 million owed.
The municipality awarded the tender to Netvend in March 2020.
Court papers show that the contract was cancelled by the municipality in April 2021. In response, Netvend accused the municipality of unlawfully cancelling the contract.
Netvend’s court papers alleged that the municipality’s termination of the contract was preceded by changes to the scope of the work initially agreed upon.
One of those alleged changes was the municipality’s request that Netvend only supply the meters, and the municipality would install them itself.
Denial
Netvend informed the court that these requests for changes led to discussions around the furnishing of a performance security by the company.
Lawyers for Netvend wrote that while these discussions were ongoing, the municipality suddenly terminated the contract.
“The said cancellation was despite the fact that the parties were discussing the aspect of the performance security, and that the municipality never, in light of the discussion, demanded that our client furnish the performance security or risk having the contract terminated. If it were not for the municipality’s conduct in changing the scope, our client would have provided the performance security already.”
Letters between the parties show that the municipality denied changing the scope of the project, and instead claimed that the performance guarantee was not provided despite requests on several occasions.
Settlement talks
The municipality in October last year filed a plea denying it was in breach of contract, and argued that without the performance guarantee, which was a material condition of the agreement, work on the project could not start.
Further, that a variation order for reduction of work was never issued by the municipality.
At the time, CEO Basson asked that the court dismiss the claim with costs.
By January, however, the parties informed the court of settlement talks.
The case is being heard by High Court judge Shafimana Ueitele.
Netvend is represented by Appolos Shimakeleni, while the municipality is represented Melvin Harmse.
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