Crime & Punishment Tue, 12 May 2009

Court awards cost against STC in dispute with Svani

Accra, May 12, GNA - The Fast Track High Court, (Commercial Division) has ordered Intercity STC Coaches to pay 60,000 pounds cost to Svani Limited, a company that deals in vehicles and accessories, for failing to pay for the supply and use of 13 buses.

The amount represents 10 per cent of 627,740 pounds of which $40,000 was made as part payment of the purchase price. Mrs Margaret Insaidoo, pronouncing judgment, said it was unfortunate for Intercity to have used the Eicher buses for over a year, for 200 trips a month, and then reject the deal both parties had entered into.

The court rejected the suit filed by Intercity STC saying that, they just entered into an "alliance" and not a "contract" with Svani Limited for which payment was to have been on work-and-pay basis. She said it was not right for the STC Board of Directors, chaired by Mr. Stephen Sekyere-Abankwa, to have summoned a meeting to reject the approval of use the of buses after a year.

Mrs Insaidoo said there was a contract and sale agreement for 13 buses, which generated considerable income during the period that the buses were in the custody of STC for which they were used for 200 trips per month.

She said the conduct of STC must be condemned since they knew that there was a sales and purchase agreement between both parties because STC wrote to the Ministry of Finance that both the importer (Svani) of the buses and STC requested to be granted permission to clear the buses on permit.


Mrs Insaidoo said by this STC took delivery of the buses including other accessories that came with them and appropriated same to itself by taking all decisions relating to the buses unilaterally. This included entering into contract with MTN to advertise their product on the buses and thereby keeping the proceeds from it. She said by this conduct STC had erred because it was their drivers who took the buses from the port and started using them and branded them with MTN advertisement.

According to the statement of claim by Svani it said it proposed to STC that if they were to order more than 10 buses, it stood to gain by the training of its in India and supply of special tools at no additional cost and supply of spare parts at discounted rates. It said Svani agreed to the terms of STC and Satisfied with the evidence of delivery of 10 buses by Svani, STC would open an Escrow account at Fidelity Bank into which payment shall be made towards defraying the cost of the vehicles.

Further to the agreement, Svani proposed to STC that it was interested in an extensive protocol of cooperation between the parties, which would involve the supply of more buses, service support, stocking of spare parts and training of STC's mechanics in India at no additional cost to STC.

STC by its letter of May 31, 2007 did not accept the proposal but rather made a counter offer for the operation of Svani's buses on an "alliance basis".

However, Svani told STC that they are not interested in an alliance business and refused to sign the Alliance Agreement submitted by STC. Svani is claming recovery of 607,740 or its cedi equivalent, interest of the said sun from December 2007 to the date of the final payment and costs, including solicitors' fees, statutory and administrative expenses. 12 May 09

Source: GNA