Radar | Oct 08,2022
Dec 10 , 2018
By FASIKA TADESSE ( FORTUNE STAFF WRITER )
A judge at the Federal First Instance Court issued an injunction against an order delivered by the Addis Abeba Kality Customs Branch Office, of the Ministry of Revenue, for all commercial banks to freeze the accounts of Nile Insurance. The asset freeze order of November 2, 2018, followed the insurer’s failure to settle 18.1-million-Br of expired customs bond it previously granted to Keangnam Enterprise Limited.
The Customs Branch Office also ordered the banks to prepare a Customer Payment Order (CPO) to settle the due amount to the Authority.
Nile was requested to settle the bond for construction equipment and machinery Keangnam temporarily imported using customs guarantee bonds issued by several different insurance companies, including Nile, in 2007. Custom guarantee bonds are issued for companies that bring machinery temporarily into the country without paying customs duties as the machines are expected to be re-exported after completion of specific projects.
However, the machinery was not repatriated to their origin and the insurance firm failed to settle payments for a bond guarantee it had granted the company, according to the Ministry's letter addressed to the banks.
Following the asset-freeze order, the insurance firm took the case to the Federal First Instance Court on November 14, 2018, requesting the court to issue an injunction against the order.
In its two-page filing, Nile raised six points, stating that it is facing challenges in its day-to-day operations since the Office has ordered its assets frozen across all its accounts. The company, represented by its legal representative, Adissu Haregewoin, also stated that it could not pay claims to clients as all of its accounts are frozen.
The insurance firm also stated that the Office has already sued Keangnam in another court, where the case is still pending, and asserted that the account freeze order has no legal basis in the High Court where it is being adjudicated. Nile also claimed that the Authority has already seized 27.3 million Br and 2.2 million Br from the accounts of Keangnam.
The plaintiff additionally claimed that the National Bank of Ethiopia has already outlawed customs guarantee bonds due to the unconditional nature of the bond, where insurers are entitled to pay claims based on good faith, provided that there is no explicit language in the underlying contract that prevents that party from doing so.
Nile argued that it is not liable to settle the company's bond with the Office, mentioning that the old law has been replaced by a new law.
On the same date that Nile filed its case in court, it took the case to the National Bank and restated the same argument. The National Bank responded with a letter to the Ministry of Revenues requesting that the Ministry lifts the insurer’s frozen accounts. In his letter Yinager Dessie (PhD), governor of the central bank, stated that the Authority’s action could potentially threaten the insurance industry.
The governor’s latter stated that the Authority needs to be careful in taking such actions in order to avoid triggering risks in the industry.
In issuing an injunction against the Office's order, Judge Shiberu Gelushe, who presides over the 16th Civil Bench of the Federal First Instance Court, summoned the Office to present its statement of defence in response to the claim brought by the plaintiff.
The court scheduled to hear the case on December 13, 2018.
PUBLISHED ON
Dec 10,2018 [ VOL
19 , NO
972]
Radar | Oct 08,2022
Fortune News | Jul 08,2023
Radar | Jun 07,2020
Fortune News | Dec 19,2018
Commentaries | Jun 05,2021
Fortune News | Jul 03,2021
Fortune News | Feb 23,2019
Commentaries | Oct 07,2023
Fortune News | Feb 05,2020
Radar | Dec 19,2021
Feb 24 , 2024 . By MUNIR SHEMSU
Abel Yeshitila, a real estate developer with a 12-year track record, finds himself unable to sell homes in his latest venture. Despite slash...
Feb 10 , 2024 . By MUNIR SHEMSU
In his last week's address to Parliament, Prime Minister Abiy Ahmed (PhD) painted a picture of an economy...
Jan 7 , 2024
In the realm of international finance and diplomacy, few cities hold the distinction that Addis Abeba doe...
Sep 30 , 2023 . By AKSAH ITALO
On a chilly morning outside Ke'Geberew Market, Yeshi Chane, a 35-year-old mother cradling her seven-month-old baby, stands amidst the throng...
Apr 27 , 2024
The Prosperity Party (PP) - Prosperitians - is charting a course through treacherous...
Apr 20 , 2024
In a departure from its traditionally opaque practices, the National Bank of Ethiopia...
Apr 13 , 2024
In the hushed corridors of the legislative house on Lorenzo Te'azaz Road (Arat Kilo)...
Apr 6 , 2024
In a rather unsettling turn of events, the state-owned Commercial Bank of Ethiopia (C...
Loading your updates...