Arbitration Panel Awards LEC $364k
Arbitration Panel Rules in Favor of ELTEL Network
An arbitration panel, appointed by the Debt Court for Montserrado County, released its findings on September 30, declaring the Liberia Electricity Corporation (LEC) liable for an unpaid debt of US$309,929.40 to a Swedish company, ELTEL Network. This decision came after a four-month arbitration process involving the LEC and ELTEL Network, which reviewed invoices, purchase requests, and delivery notes among other documents.
The dispute originated from a 2016 agreement between ELTEL Network and LEC, under which the Swedish company supplied the electricity company with Low Voltage (LV) materials. Despite receiving the materials, LEC has repeatedly contested the debt amounting to US$434,459. The case was initiated by Hans Armstrong, the Attorney-In-Fact for ELTEL Network, who is a British national.
Hans Armstrong initially sought US$434,459 as unpaid debt, but the arbitration panel, after careful consideration, reduced the amount to US$309,929.40. This decision marks a significant step in resolving the long-standing financial dispute between the two parties.
Understanding Low Voltage (LV) Applications
Low Voltage (LV) applications are widely used in various sectors, including control rooms, distribution systems, lighting, communication systems, and security systems. LV wiring is often preferred because it is designed for smaller currents and offers increased safety compared to regular wiring. This makes it a critical component in many infrastructure projects, especially in the energy sector.
ELTEL Network has been vocal about its concerns regarding the management of LEC\’s indebtedness since 2019-2020. However, LEC has deliberately refused to settle the outstanding balance of US$434,459 despite several emails and official letters sent to them.
On January 1, 2020, ELTEL Network wrote to then LEC Chief Executive Officer, Monie Captan, reminding him of the promises he made to settle the outstanding balance. Unfortunately, Captan refused and failed to respond to the letter, leaving ELTEL Network with no option but to seek legal redress through the Debt Court.
Settlement Offers and Legal Action
According to ELTEL Network, between 2019-2020, they offered the LEC management a settlement agreement based on a direct payment of US$360,000. If accepted, this offer would have resulted in ELTEL Network waiving US$74,452. However, LEC failed to honor this offer.
Despite numerous attempts to communicate with the CEO of LEC, Monie Captan, ELTEL Network claims that he has consistently refused to settle the debt. This refusal has led to the current legal action, which has now culminated in the arbitration panel\’s ruling.
Ongoing Challenges and Future Implications
The ruling by the arbitration panel highlights the ongoing challenges faced by companies operating in Liberia, particularly those involved in the energy sector. It also underscores the importance of timely and transparent financial management by state-owned enterprises like LEC.
For ELTEL Network, this decision represents a crucial victory in their efforts to recover the outstanding debt. It also sets a precedent for similar disputes in the future, emphasizing the need for accountability and adherence to contractual obligations.
As the situation unfolds, both parties will likely continue to monitor the implications of this ruling. The outcome may influence how similar disputes are handled in the future, potentially leading to more structured and fair resolution processes.
