Botswana Railways (BR) hopes of avoiding a big hit to the wallet were derailed on Friday, as the Court of the Appeal (CoA) ordered the struggling parastatal to pay Engen Marketing Botswana (EMB) over P9 million.
The eye-watering payout concerns a P6.9 million debt dating back to 2018, for the supply and delivery of various petroleum products.
Court also hit BR with a further 10 percent charge for every year the amount remained outstanding after 20 December 2019.
The conflict has been before the courts since 2020, after BR failed to pay for services rendered.
In last week’s judgment, CoA noted BR asked Engen to extend its credit facility for sale and delivery of certain petroleum products, which the petrol giant’s duly agreed to.
“BR failed to pay for the sale and delivery of the products despite repeated demands by Engen Marketing Botswana,” the judgment reads.
On 30th June 2020, after an EMB summons, BR wrote to them confirming its debt for the sum of P6, 967, 723.21, which consisted of P5, 367, 723.21 for the supply of diesel and P1.6 million for in-transit losses incurred by EMB.
“On the same date, BR paid EMB an amount of P502, 914.32 and proposed to make monthly installments in the same amount until the debt was fully settled. Furthermore, with regards to the future in-transit losses, the parties were to reconcile and agree on the extent of the losses as soon as they happened. In August 2020, BR paid the second installment, and no further payments thereafter,” reads the judgment.
The national railway company then submitted papers before court denying liability as claimed by EMB, who at that point were seeking P7.2 million due to increased in-transit losses.
BR argued that EMB failed to disclose the date, place and by whom the purported agreement was entered into; and whether the said agreement was verbal or in writing and to provide a copy.
BR also wanted EMB to produce copies of the purchase order, delivery notes, and acceptance of the petroleum products.
It based its defence on EMB’s failure to produce evidence to support its claim.
In relation to the in-transit losses, BR argued that the claim for P2, 2 million was for damages and could only be established at trial and not by way of summary judgment. They also denied ever agreeing to pay the amount.
The CoA differed with the decision of Justice, Matlhogonolo Phuthego of Lobatse High Court, who had dismissed EMB’s claims with costs.
The bench of three judges felt the High Court should have determined the in-transit losses during a separate trial since EMB were prepared to produce evidence to support their claim.
“The EMB’s declaration in this case cannot, in the circumstances, be classified not having disclosed a cause of action at least in relation to the admitted ‘Trade Account’ – in the sum of P6, 386, 748.14. The BR has not only acknowledged indebtedness in relation to the “Trade Account’ but has also paid part thereof. The High Court seemed to have lost sight of the respondent’s acknowledgment of the part of the claimed amount. Following the BR’s admission of indebtedness there was not controversy, whatsoever,” the judges observed, before ordering the debt be paid.
CoA also set EMB’s in-transit losses claim, which now stands at P2,173,799.72, back to the High Court for trial.
