EBC DEMANDS E26M FROM SLOMOES

MBABANE – The Elections and Boundaries Commission (EBC) was allegedly sold second-hand equipment in an over E17million rent-to-buy tender by Slomoes Corporation (Pty) Ltd for the 2018 national elections and incurred E26 million in losses.  

The EBC has since instituted proceedings at the High Court, demanding payment of E26 million for damages it incurred as a result of alleged breach of contract by Slomoes Corporation. From the contract price of E17 719 896.57, the EBC alleged that it ended up paying about E8.2 million more. According to the particulars of claim, the company and its Director Lucky Bandzi Dlamini, allegedly unjustly enriched themselves with a sum of E8 million from the agreement which was signed by the latter, his attorney and the EBC Secretariat Richard Phungwayo, who represented the commission during the signing of the agreement.

The EBC’s papers were filed yesterday at the High Court. The EBC told the court that on April 15, 2018, at Nkhanini, Lobamba, with Slomoes Corporation, it allegedly concluded a written agreement, being an Election Management Rent-to-Buy Agreement. In terms of the agreement, the EBC was to rent the Election Management System from Slomoes Corporation which was to be acquired by the commission at the end of the rental period or upon full payment of the contract price.

Agreement

The parties, according to the EBC, allegedly concluded a Service Level Agreement on April 15, 2018 at Nkhanini which was an addendum to the main contract. The veracity of these allegations is still to be tested in court. The respondents are yet to file their answering papers. The EBC is represented by Mlungisi Khumalo of Khumalo Attorneys in the matter.

When the parties entered into the agreement, the EBC, according to the particulars of claim, was represented by it Secretariat, Phungwayo while Dlamini appeared for the company. The material terms of the agreement were that it would commence on April 15, 2018 and continue for a period of five years to April 14, 2023, per Clause 32 of the General Conditions of the Rent-to-Buy Agreement.

The EBC informed the court that the defendant (Slomoes Corporation) allegedly warranted that the equipment being lease under the contract was new, unused and of the latest design as well as in operative condition that incorporated all recent improvements in design and material unless provided otherwise in the contract. This, according to the EBC, was in terms of Clause 14 of the General Conditions of Rent-to-Buy Agreement.

Another term of the agreement, submitted by the EBC, was that the delivery of the equipment and performance of services would be made by the lessor in accordance with the time schedule prescribed by the lessee in the schedule of requirements, per Clause 21 of the General Conditions of the Rent-to-Buy Agreement. The rental period would cover a period of five years wherein, upon full payment of the contract price, the solution shall be handed over to the lessee pursuant to the rent-to-buy concept as per Clause 32 of the Agreement.

prejudice

The lessee, according to the agreement, without prejudice to any other remedy for breach of contract,  written notice of default sent to lessor, may terminate the contract in whole or in part, in terms of Clause 23. The agreement, submitted the EBC, would be terminated by the lessee by notice sent to the lessor at any time for its convenience, as per Clause 26 of the Agreement.

The EBC alleged that Slomoes, acting in breach of the general conditions of the agreement, reportedly failed to deliver a new solution but instead delivered an old Election Management Solution, which was used before. Some of the items that were to be delivered by Slomoes Corporation to the EBC, according to the schedule of requirements, were AN hp Office Jet 202 mobile printer, DP500 Digital-Persona 45000 Finger-Print Reader, Honeywell barcode reader, signature pad, C310 webcam and others at a cost of E17 719 896.57.

The EBC alleged that Slomoes Corporation never delivered the full Elections Management Solution. “To this day, the defendant has deliberately refused to hand over 17 laptops to the plaintiff (EBC). In acknowledgement of the breach of the General Conditions of Rent-to-Buy Agreement, the defendants wrote a letter wherein they made an undertaking to remedy the breach before the end of December 2018 and before the end of January 2019,” the summons reads. 

The EBC further submitted that the defendants’ attorneys acknowledged the breach of the conditions of the agreement in a letter dated February 11, 2021.
On the other hand, the EBC informed the court that in discharge of its obligations in terms of the agreement, it allegedly paid Slomoes Corporation the contract price in full, ‘yet the defendants (Slomoes and Lucky) refused to hand over the Elections Management Solution’. The contract price, according to the agreement, was E17 719 896.57 but the EBC alleged that it was made to pay E18 million without justifiable reason.

“Further, the defendants unjustly benefitted from plaintiff through an unlawful and/or invalid Service Level Agreement, signed by the second respondent (Dlamini), his attorney and Mr Richard Phungwayo which is in violation of the General Conditions of Rent-to-Buy Agreement, unjustly enriched the defendants a sum of E8 million,” further read the papers. The EBC stated that it brought it to the attention of Slomoes in a letter dated February 4, 2021 that they had allegedly breached the agreement.  “Despite notice being given, despite undertakings being made, the defendants failed to remedy the breach.”

Breach

In light of the alleged breach of agreement by Slomoes, the EBC submitted that it terminated the agreement to rent-to-buy as well as the Service Level Agreement in terms of Clause 23 and 26 of the general conditions of the agreement. As a result of the defendants’ alleged breach of the agreement, the EBC told the court that it suffered damages in the amount of E26 million, being the contract price paid to the company. “In the premises set out above, the defendant is liable for damages to the plaintiff in the sum of E18 000 000 and E8 000 000 which amount is now due and payable by the defendants to the plaintiff.  Wherefore, the plaintiff claims from the defendants, jointly and severally, one paying the other, to be absolved,” stated the EBC, which demands payment at nine per cent interest per annum. The matter is pending in court.

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