Justices at the Federal Supreme Court have remanded the six-year-old court wrangling between Prosper International and Tekleberhan Ambaye Construction Plc (TACON), reversing the lower court's ruling that favoured the latter. The two have been in a legal ordeal over a construction equipment rental agreement.

The five justices, including Solomon Areda, vice president of the Supreme Court, have returned the case to the Federal High Court where the case began. In the ruling, the justices stated that the lower courts did not properly examine evidence and witnesses' testimony in passing the rulings.

The case was instigated following a dispute that arose after TACON rented two wheel loaders and a bulldozer from Prosper for the civil work it was subcontracted for at Yayu Fertilizer Factory in Yayu Wereda, Oromia Regional State. The then Metals & Engineering Corporation (MetEC) subcontracted the civil work to TACON at a cost of two billion Birr.

For the two wheel loaders, the disputing parties contracted for 400 hours each and 500 hours for the bulldozer. TACON paid 460,000 Br for each loader and just under 1.1 million Br upfront for the bulldozer. After the machines had served for 445 hours, TACON let them idle with no orders to accomplish, according to Prosper’s appellate.

"Even though the machines were idle, we request a payment for a minimum of eight hours a day since the contract was not terminated,” reads the appeal. "As an amicable resolution for the payment Prosper was owed, a loader and a bulldozer were rented to Felema Construction after getting a green light from TACON."

After the contract with Felema ended, Prosper received the bulldozer. At the same time, the loaders remained on site because of TACON's claim on the loaders for the remaining hours for which partial payments were made, according to the appeal.

Prosper then gave a legal notice to TACON requesting payment and the release of the machines. TACON also gave a counter legal notice asking for the return of its advance payment for the wheel loaders. TACON then sued Prosper for money owed amounting to 204,460 Br, claiming the machines did not serve for the period due to technical problems. Proposer countersued TACON for the accrued rental payment amounting to 6.1 million Br.

TACON also argued that the contract was for only 500 hours for the bulldozer and 400 hours each for the wheel loaders, which was disputed by Prosper, arguing that the contract stipulated an indefinite period of use of the machines for the project duration.

The High Court rejected the claims from both parties. The judge stated that TACON did not present evidence to prove its claim in notifying Prosper about the malfunctioning of the machinery. The Court also asserted that Prosper had already taken the full payment for the equipment, and there is no need for TACON make further payment to Prosper.

Prosper appealed to the appellate court at the Federal Supreme Court, which sustained the lower Court's ruling without even summoning TACON. This triggered Prosper to take the case to the Cassation Bench. In its appeal, Prosper claimed that the lower courts made fundamental errors of law in the rulings. It also claimed that the High Court did not properly interpret the contract between the two parties.

Prosper appealed to the Bench requesting a reversal of the Supreme Court's ruling. TACON filed a counter appeal, asserting that Prosper opened the file after a year and five months of the Supreme Court's ruling, past the period when limitations had expired. Then the justices rejected Prosper's appeal by stating that it was filed without following correct legal procedure.

Prosper then petitioned for judicial review and a right to appeal, which got acceptance. The Cassation Bench has started reviewing the case afresh.

TACON has filed two counter appeals opposing the ruling to reinstate the appeal and calling for the case to be closed since it was opened without proper legal procedure.

However, the five justices have rejected TACON's appeal over the decision of judicial review, stating that the case has to be reviewed with a separate file, which permitted the appeal.