Nile Ins. Wins 1.6 Million Br from Nile Coffee Export in Court

May 24, 2010 (Addis Fortune/All Africa Global Media via COMTEX) -- Nile Coffee Export Plc was ordered to pay 1.6 million Br plus interest to Nile Insurance SC.

Nile Insurance filed the lawsuit on December 14, 2009, claiming that the coffee exporter had defaulted on a 500,000 Br premium payment. The insurer also claimed to have made a guarantee payment of over 1.1 million Br to Dashen Bank. The payment was for a loan taken by the export company, which was testified to with a collateral agreement the two sides signed on March 3, 2008.

The interest on the 1.6 million Br owed amounted to 549,129 Br, the insurance company also claimed. It also requested legal interest of nine per cent until payment is fully made.

Nile Coffee Export denied all the charges and contested the agreement signed on March 3. It did so on grounds that it was merely for collateral and should not be taken as an agreement of the admission of a loan, since the agreement proving the loan was not presented as evidence.

Nile Coffee also contested the agreement on grounds that it was not signed by a person with the authority to do so. The agreement was not attested by two witnesses and not registered, the defendant also argued.

The collateral agreement signed on March 3 did not need any formality because the plaintiff did not present the evidence to exercise its right on the collateral but to prove that Nile Coffee Export admitted the money owed, the court held. It also rejected the claim of the defendant that it was signed by an unauthorised person, stating that it was signed by the general manager of the coffee export, who has the power to conclude agreements, and bore the seal of the company, as well.

The defendant should pay the premiums owed and the guarantee payments to the insurance company, which total 1.6 million Br, the court ruled on May 10, 2010. It rejected the payment of interest for the period before the lawsuit was filed saying that there was no such agreement made between the parties. However, a nine per cent interest shall be put into effect until payment is fully made, the court ruled.

"We have other lawsuits against Nile Coffee Export that are pending, so we will comment on this when we receive the reports of the others," a legal expert at the insurance company told Fortune.

The general manager of Nile Coffee Export Plc refused to comment on the case.