A Dubai-based wheat supplier, which has been wrangling in court with the federal procurement agency over a contract, has won its bitter two-year-long battle. The latter had suspended the company from supplying wheat, accusing it of failing to fulfill commitments.

The Public Procurement & Property Administration Agency had barred Promising International Trading from public procurement bids for a year due to its failure to deliver on a contract it signed for the supply of wheat. In 2018, the company won a bid to supply 200,000tn of wheat for 1.4 billion Br in June of that year, however, it did not deliver the shipments due to an increase in shipping costs.

Promising secured the deal for 1.39 billion Br, winning the bid tendered by the Public Procurement & Property Disposal Service on behalf of the Ministry of Trade & Industry. The auctioneer specified that all the milling wheat must be shipped via the Ethiopian Shipping & Logistics Service Enterprise (ESLSE) with the Enterprise reserving the right to waive its duty.

The bid demanded cost & freight (CFR) offers in which the seller is required to arrange for the carriage of goods by sea to a port of destination and provide the buyer with the documents necessary to obtain them from the carrier. The bidders were also required to factor in shipping costs from the ESLSE on top of the wheat price. After the firm won the bid, it faced an increase in the initial shipping price submitted by the Enterprise from 26 dollars a tonne to 34 dollars.

“They told us the initial price was an indicative price,” said Habtamu Million, a local representative at Promising. "We then appealed to the Service about the increase in shipping costs and asked for a waiver but received no solution."

The company then submitted a letter of contract cancellation to the Service. The Service, in turn, wrote a letter to Commercial Bank of Ethiopia (CBE) to forfeit the bid security amounting to 18,000 dollars. It also filed an appeal to the regulatory agency accusing Promising of failing to uphold its end of the contract. Upon receipt of the appeal, the Agency suspended Promising from participating in any public procurement for a year.

"Instead of receiving an apology," said Binyam Kebere, an attorney who has been with Promising for 12 years, "we've been banned."

This triggered Promising to take the case to the Federal High Court, disputing the Agency's decision. However, in November 2019, the High Court ruled in favour of the Agency. Promising then filed an appeal to the Federal Supreme Court's Cassasion Bench, stating that because the buyer mandated that the wheat be transported by the Enterprise and the shipper then revised the price, the company was not liable for failing to deliver.