Two firms are seeking to recover over $137m (about Shs500b) from the government of South Sudan, which they accuse of violating contractual obligations and causing losses, according to a civil suit filed at the East African Court of Justice in Arusha, Tanzania.
Lupain Group, with business footprints in South Sudan, Uganda, and Kenya, dealing in automobiles, logistics and petroleum, in September last year, asked the regional Court to order Juba to pay it $92m (about Shs335b), citing breach of two contracts.
In Application No 38 of 2020, the firm seeks to recover an accumulated debt of $35.5m (about Shs130b), which the government of South Sudan reportedly agreed to pay in installments within a year.
In Application No 39 of 2020, the firm seeks to recover $56 (about Shs205b) after it was contracted to supply and deliver 600 cars to the Government of South Sudan, a contract it says was breached despite procuring all the cars.
At the same Court, Juba faces a separate civil suit filed by Kenya-based company, Yu Sung, which seeks to recover over $45.5m for construction services.
Lupain Group is represented by Nairobi-based law firm, Ochieng Opiyo and Company Advocates, while J. Miles and Company Advocates are the legal advisors.
Mr Simmons Lupai, the Group Chief Executive Officer, declined to speak to this reporter, but his lawyer, Mr Alfred Ochieng Opiyo, said the case is “monumental” and that his client has “a very watertight case”.
He said: “There is no way a government can issue a sovereign guarantee to my client and fail to honour the same. It is a monumental case which has direct effects and implications on the Government of South Sudan.”
He further lamented that: “My client was approached for an Out of Court settlement, however, no commitment on the settlement agreement reached.” The next Court hearing is set for September 15.
A Certificate of Urgency filed by Mr Opiyo reads in part: “. . . The Applicant, Lupain Group Inc, holds Two (2) valid Bank Guarantees number 004/2020 and 005/2020 issued on April 29, 2020, by the Respondent, The Republic of South Sudan, in respect of various transactions and contracts entered between the parties and is overdue for payment.”
It adds: “The Applicant has presented the Bank Guarantees for payment, but it has not been honoured and there is every indication that the Respondent does not intend to honour its commitment under the said Bank Guarantee unless compelled by an order of the Honourable Court.”
After emerging from decades of civil war, South Sudan has endured divisions and internal conflicts which have had trickle-down effects on the economy, including reports of widespread corruption and solicitation of kickbacks.
A highly-placed business source in South Sudan said some government figures tend to be more powerful than its leadership.
“South Sudan is one of the most-corrupt countries, where kickbacks are considered for any business transaction to succeed,” the source said.
Credit: Daily Monitor
