Security firm sues construction company over alleged 7 million birr unpaid debt

A security company is taking legal action against a building firm, which is constructing homes for Access Real Estate, claiming it is owed 6.8 million birr for security services it provided. Maraki Professional Security and Counseling Service filed a lawsuit at Lideta Federal High Court against Yibel Industrial PLC.
In addition to the charge over the alleged unpaid debt, Maraki also requested the court grant an injunction against a factory owned by Yibel in Burayu, Oromia Special Zone, preventing its sale or transfer to a third party.
The court granted the injunction and set the value of the factory at seven million birr.
Maraki and Yibel signed a contract in August 2010 for the provision of security services by Maraki in cities where Yibel constructs homes for Access Real Estate. Under the terms of this contract, Yibel agreed to pay more than 870,000 birr per year to Maraki and had agreed to pay up front for the first three months of service.
Yibel was unable to make this payment, leading Maraki to ask Yibel to take control of the properties it had been contracted to protect.
A claim statement presented to the court said: “Yibel itself has acknowledged in writing non-payment for services provided and has requested more time to effect payment.”
Maraki’s claim against Yibel also includes nine per cent interest and requests that the court frees the company from its obligation to Yibel.
Yibel has challenged the decision to decide the matter with a summary trial, arguing it should be an ordinary trial. In a document filed in court on 11th July, it said: “Since it is not a bill of exchange, promissory note or check, it should not be seen under summary procedure.” It also argues: “The value of the property has not been properly calculated.”
Yibel has also challenged Maraki’s request for suspension of responsibility for the properties and materials under its charge, saying it should still be held responsible for security, as per the original contract.
Maraki is currently providing security at 10 sites.
According to Yibel, its contract with Access Real Estate for the provision of security services was through ‘cost plus profit’ turnkey, in which Access covers the cost and the profit goes to Yibel. Therefore, Yibel claims that the presence of Access is vital since it is Access that should pay the cost incurred, and they will be severely handicapped if the court goes to trial without the presence of Access in a summary procedure trial.
Ordering the defendant to respond to the charges, a judge of the 7th Bench, Endeshaw Haile, who heard the case on 2nd July, set 5th August as the date for the next hearing.
Yibel, which is registered as a first grade construction company, merged with its sister company Living Steel Construction PLC. It was initially engaged in manufacturing magnesium board and sheeting board products. It is one the companies which contracted and received millions of birr from Access Real Estate.