The Federal First Instance Court gives has ruled against Zemen Bank, who sued the under liquidation Holland Car Plc, for 20 million birr.
The court said that the bank, which was the major lender for the first local car assembly company, wanted close to 10.6 million birr to cover the cost of car parts and transportation from the port in Djibouti to Mojo, which is a center for assembly, and customs and other payments.
The bank also wanted over 9.6 million birr in interest and a six percent commission.
They had attempted to get paid through a liquidity supervision commission for Holland Car Plc, which was assigned by the court about five years ago to handle the process of dissolving the company. However, the commission did not agree to do this.
Zemen argued that they should be awarded transportation costs and other expenses but the court ruled that their documents and arguments did not provide enough evidence that they had paid the amount they claimed to transport car parts.
The verdict also ruled that the bank was not entitled to interest.
Holland Car was declared bankrupt by the Lideta Federal High Court on January 21, 2013, after which it was decided that the company would not pay any of its debts starting from two years prior, in January, 2011.
The court said the bank’s request went against the spirit of the liquidation process. The court indicated that filing the case to the court after the bank tried to solve the process through the commission, who is only responsible for settling the liquidation is unacceptable.
The court has also added that the bank’s evidences did not support their argument that they should cover the cost of transporting the cargo imported to be assembled from the port. The final decision of the court stated that there is no evidence that show the bank paid the logistics cost.
As a result, it rejected the over 20 million birr claim of Zemen Bank.
The pioneer car assembly was founded in 2005 via a joint venture between Tadesse Tessema and Trento Engineering, a Dutch company with an initial capital of 11 million birr.