AU Turns Down Arbitration Call from Foreign Affairs Ministry

The African Union (AU), the continental union of 55 member states, seems reluctant to appear before the arbitrator over a dispute concerning unpaid duties on a used car the Union sold to a former retired employee.

Gizaw Denbie, the former security chief at one of the institutions under the Union, has appealed to the Ministry of Foreign Affairs to arbitrate between him and the Union. Nine years ago, Gizaw bought one Land Cruiser from three the Union auctioned off. All three Land Cruisers were about a decade old.

When Gizaw and the Union signed the agreement on April 20, 2011, Gizaw paid 400,000 Br. In the contractual agreement, the African Union agreed to settle any outstanding statuary fees required before the sale.

Six days following the contractual agreement, the AU sent a letter to the Ministry of Foreign Affairs for assistance. In the letter, the AU requested the Ministry authorize the then Ethiopian Revenues & Customs Authority in transferring ownership of the vehicle to the buyers, mentioning that some vital documents were missing, which had blocked the vehicles' transfer of ownership.

In the letter, the AU stated that the vehicles were bought in 2000 from Dubai and directly shipped to Union Liaison Mission at the UN Peacekeeping Mission (OLMEE) in Asmera, Eritrea. The vehicles then were handed back to headquarters in 2009 after serving for nine years there.

When the vehicles were transferred to the headquarters office in Addis Abeba, some vital documents including the commercial invoice, bill of lading and customs declaration were missing, according to the letter from the AU. Then the Ministry sent a letter to the former Authority on May 4, 2011, requesting the ERCA consider the tax deduction law for the Land Cruisers.

The Authority then transferred the ownership of the vehicle to Gizaw on August 4, 2011. After two years Gizaw sold the car to another person for 820,000 Br. A year later the buyer, Zewdu Tezera, received a letter from the Kality Branch of the Authority to settle 852,017 Br in customs duty, which was not paid when the car was imported into the country.

Zewdu, who claimed that he was informed by the Authority to pay the money and ask reimbursement from Gizaw, paid 714,837 Br in three rounds. He then requested Gizaw reimburse him, but his request bore no fruit.

Angered with Gizaw's refusal to reimburse him, Zewdu took the case to the Federal High Court, asking the judges to order Gizaw to settle the duty. The defendant claimed he is not liable for reimbursement, stating that the Authority provided him with ownership documents after making sure that the vehicle was free from any government debt. Gizaw also said that he would not have bought it if he knew there was an unpaid duty on the car.

The Court has summoned the AU for a defence; however, it did not appear before the court. After reviewing the case, the Court ruled in favour of the plaintiff, ordering Gizaw and the AU to pay the duty along with nine percent interest. The ruling also stated that Gizaw can ask for reimbursement from the AU after paying the value.