THE KUMASI Metropolitan Assembly (KMA) yesterday won its legal challenge against a judgement debt of over GHȼ50 million it was expected to pay to Freko FD Enterprise for repudiating a contract of Build Operate and Transfer (BOT) to construct some public toilet facilities in the metropolis.
The Court of Appeal which upheld an innocent party’s right to walk out of contract when there is a clear breach that goes to the root of the agreement, ruled against Freko FD Enterprise that had won the earlier battle against the termination of the contract at a Kumasi High Court.
The decision has come as a relief to KMA which has been saddled with a debt stock of more than GH¢100 million, beside GH¢119.21 million debt it accumulated several years back.
A GH¢10,000 cost was also awarded against Freko FD Enterprise by the court presided over by a three-member panel who rejected the trial court’s order of GH¢8 million damages against KMA, describing it as remote and unacceptable.
The court again reversed a cost of GH¢2 million awarded in favour of Freko Enterprise because the respondent company failed to discharge its responsibilities under the contract.
In the year 2000, Freko FD Enterprise committed to construct more than 60 toilet facilities across the Ashanti Regional capital in six months after entering into a BOT agreement with the KMA, but failed to discharge its responsibilities under the contract.
The court said the company had only built 20 of the said facilities after the six month period contrary to the terms agreed on in the contract, compelling the KMA to disregard the agreement and take over the facilities when it was also realized that the respondent company had failed to account for the proceeds from operating the facilities for 10 years.
The Justices indicated that they were rejecting the ruling by the Kumasi High Court that granted the reliefs to Freko Enterprise because the trial judge did not provide the basis for the award of damages since the company could not honour its side of the bargain.
The court ruled that Freko FD Enterprise was only entitled to the actual cost for the construction of the toilet facilities, which amount, it observed, was shrouded in secrecy.
From Ernest Kofi Adu, Kumasi