U.S.$10.7M Debt Chokes Liberian Government, As Judiciary Dribbles Major Investor

Public-private partnership is a newfound paradigm if not cliché fondly paraded with by national and international organizations and governments in their endeavors to promote vibrant investment and development particularly in the developing world. This concept thrusts private entities into the national development mosaic, allowing them to take major responsibility in the development process of the country at the behest and relief of the public architecture. This paradigm has got into motion in Liberia in the past years, but it seems things are moving grayer for private actors who more often than not risk resources to “wash the back of government” in the hope of seeing the quid pro quo in time. One particular entity that has fallen in the quagmire is longtime popular partner of the Liberian government, George Haddad’s Alliance Motor Corporation. Indicators are that this private agent is finding it difficult to recover US$10m owed by government, and the judicial arm is standing aloof if not dillydallying with the grave issue.

Liberia’s judicial system is increasingly coming under international spotlight by foreign legal experts on the country dealing with overseas investments and the potential danger its poses in obtaining impartial justice for party litigants. An impartial judicial system is indispensible to the creation of a thriving investment climate, where investors are sure that the law will protect their investment and seek redress for wrongs committed against their commercial interest.

The US$10.7 million debt action involving Alliance Motor Corporation in Monrovia is generating much interest in the international community, especially foreign companies involved with the supplies of motor vehicles to the Alliance Motor Corporation. The Alliance Motor Corporation is like any other company which is a mere sale representative for overseas companies; owing them is therefore being indebted to their foreign suppliers, and refusing to pay them, makes government less credible in the consideration of the international community.

Four years into the US$10.7 million debt case against the Liberian Government, the Commercial Court has shelved ruling for the second time, fumbling whether it has the legal authority to preside over the case in keeping with the 2011 Legislative Act establishing the court. Earlier this year in February 2015, the court after legal arguments, reserved ruling after state lawyers raised an objection against its authority to exercise jurisdiction over the matter. There was no ruling.

Last November 2015, the presiding Judge of the Commercial Court again entertained legal argument for the second time and requested state lawyers and lawyers representing the Alliance Motor Corporation to each submit what it called a five page proposed ruling to the court for consideration in the matter. The deadline for submission was Tuesday, November 24, 2015. The court has yet to rule. The US$10.7 million debt action grew out of the supplies of motor vehicles including fleet of Cherokee jeeps, Neon sedans, along with spare parts and services to the Liberian Government on credit by the Alliance Motor Corporation and Prestige Motor between 2003 and including 2006.

The court action followed five years of failed negotiations and payment stipulations by the government, with the Sirleaf Administration blatantly refusing to settle its legal financial obligation to the company, due to what an executive mansion official said “old grudge”.

The case which has been shrouded in a cloud of politics, the Commercial Court has yet since 2011, to determine whether it has the authority to adjudicate the matter and rule it to trial. State lawyers have said in court, that while they were not challenging the US$ 10.7 million claim against government, their only contention is that the Commercial Court lacks jurisdiction to preside over the matter. The Commercial Court was established 2010 by the National Legislature as a specialized court to adjudicate all cases arising of commercial transactions, since the Debt Court is limited in its scope of jurisdiction.

Foreign suppliers of the vehicles to the Alliance Motor Corporation which has become the subject of court action are increasingly becoming intolerant over the deliberate refusal of the Ellen administration to settle government’s indebtedness for the past 10 years. They are said to be getting weary of Liberia’s judicial system and are likely to seek justice in foreign jurisdiction, which financial consequences could run into hundreds of millions and the attachment of Liberian Government asses abroad including the maritime fund.

The case has dragged on for the past five years in court after four years of fruitless negotiation between authorities of the Liberian government and the company.

Foreign Debt collecting and Enforcement Agencies based in Europe have offered there services to ensure payment along with interest accrued and damages caused for the failure of the Liberian Government to settle its arrears of US$ 10.7 million over the past 10 years.

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