They used to be thisclose but now are now mortal enemies.
In another twist in a legal battle of two local business executives entangled in business and personal relationships, a court has dealt a blow to one of the defendants.
The Federal High Court’s 8th Civil Bench, on Oct 25, 2016, ruled in favour of Frieda Business Plc, and ordered Orchid Business Group Plc, to pay close to 2 million Birr. The individuals behind the companies, Yonas Kassahun and Akiko Seyoum, were not only businesses collaborators but were once involved in a personal relationship.
The case was initiated by Yonas’s Frida claiming that Akiko’s Orchid should pay more than 2.5 million Br for machine rental fees. Frida alleged that it rented one machine that was used during the construction of the Addis-Adama Expressway and two machines, including the one that was used on the Addis-Adama Expressway, which were used in the construction of the Grand Renaissance Dam, to Orchid.
Orchid is a group composed of different investment companies, including Orchid General Contractor, a first grade contractor, Wonder Wheel Plc, an importer of finished materials for buildings and Orchid Machinery Rental which rents out construction machinery. Akiko is the manager and the majority shareholder of the company.
This is not the first time that Yonas, a German investor of Ethiopian origin and the owner of Frida Plc, and Orchid have locked horns in the court room. The two companies and their owners have been involved in a series of criminal and civil litigation.
In 2012, after Yonas was charged with hacking Akiko’s email, Yonas and his lawyer passed a document to the Ministry of Justice alleging that Akiko was involved in money laundering.
In June 2014, Orchid was ordered by the Federal High Court to pay 42 million Br that it owed to Yonas for services rendered during South Sudan’s Independence Anniversary.
Later, in October 2014, Yonas was sentenced by the Federal First Instance Court to two years in prison for hacking and accessing Akiko’s email. The Federal High Court later reversed the verdict of the lower court and Yonas was released. The president of the Federal High Court, Wubishet Shiferaw, later suspended the judge who passed the decision in favour of Yonas. In Oct 2015, Wubishet resigned from his office mentioning health problems and his studies as reasons. Some, however, connected his resignation with removal of the judge who presided over the case between Orchid and Yonas.
Orchid argued that the rental agreement in writing between Orchid and Frida was a mere draft that did not bind the parties. According to Orchid, the agreement was made in writing and should have been attested by witnesses. Lack of confirmation by two witnesses, Orchid argued, made the contract a nonbinding draft.
Orchid also argued that since the agreements were not signed by the manager or deputy manager of the company, it could not be bound by the agreement. It also raised the issue that the names of the machines on the time sheet that was presented by Frida to show when and for how long the machines were used did no correspond to the actual plate numbers of the machines.
The court ruled that the rental agreement was valid and binds the parties. Since Orchid and Frida had not expressly agreed in their rental agreement that the agreement should be attested by witnesses, the agreement was binding despite the fact that it was not verified by witnesses.
The rental agreement was signed by two Orchid engineers who were neither the manager nor the deputy manager of the company. Although Orchid claimed that the engineers are not the agents of the company, the court reasoned that the company neither opposed the rental agreement nor took steps against those engineers. According to the ruling of the court, it was proved that the company had used the machines and that was taken to imply an implicit acceptance of the rental agreement.
The court added that despite the error in writing the names of the machines on the time sheet, Orchid did actually use the machines. Orchid, on the other hand, did not show that it rented the machines it used from any other person.
The court decided that the rental agreement is binding and Orchid used the machines after the conclusion of the agreement. As a result, Orchid was ordered to pay to Frida in accordance with the terms of their agreement.
The bench calculated the rent based on the time sheet that showed the length of the time the machines were used by Orchid and the agreed fee between the parties in their agreement. Orchid was finally ordered by the court to pay around two million Br to Frida.