Multi-million mask deal goes sour
20 April 2021 | Crime
A Chinese owned tobacco company are suing to reclaim more than N$6 million they say was lost when a deal to buy 440 000 face masks in February last year went sour.
Namibia Oriental Tobacco CC in November sued Mickir Supplies CC in the Windhoek High Court, demanding payment of N$6 551 760, plus interest and the cancellation of the mask deal.
The tobacco company is majority Chinese owned, with Swapo’s coordinator for the Oshikoto region, Armas Amukwiyu a co-owner. Earlier this year it was reported in national media that the company’s hope to kickstart a multi-billion Namibia dollar tobacco plantation in the Zambezi region was dead in the water after it refused to agree with conditions set by Cabinet.
Mickir is defending the matter, claiming that they are suing a South African company which sold them 30 000 fake face masks for which they paid more than N$4 million in June last year.
They say the purchase of the masks was part of an agreement with Namibia Oriental Tobacco and that they are not in breach of the contract as both parties carried equal risks in the business venture.
Papers submitted to court by Oriental Tobacco state that on 10 February, Mickir Supplies – represented by Trevor Petersen – agreed to procure 440 000 Ansell Sandel N95 face masks for them. Oriental was represented by Lou Ming.
Court documents state that the agreement, which was partly written and partly oral, stipulated that Mickir would deliver 420 000 masks at a cost of close to N$9 million. A few days later Ming and Petersen concluded another oral deal in which they agreed that 20 000 more masks should be procured for an additional N$423 2000.
The masks would be delivered before 24 February to an address in China, and the tobacco firm would pay a N$500 000 security deposit. They also advanced just over N$6 million to Mickir to help with the order.
Namibia Oriental Tobacco now claims that Mickir is in breach of the contract, after it failed to “deliver the 440 000 masks on or before 24 February or at all”.
They also claim that by time the lawsuit was filed on 24 November 2020, no masks had been delivered.
In their plea, filed in February this year, Mickir Supplies admits they were paid N$6.5 million but argue that their first order in South Africa fell flat, after the company informed them they could no longer supply the masks. Although the company had been paid, they fully refunded Mickir.
Mickir says Oriental Tobacco was made aware of the situation, and in response said they did not want the money back. Instead, they asked that “due to the high demand for masks in Namibia, [Mickir] should procure alternative masks from an alternative supplier and assist the plaintiff in selling the masks in Namibia.”
Mickir says a new deal was made, and that the parties realised that mask prices had shot up steeply between February and May.
This deal, finalised in June 2020 according to Mickir and also made orally, stipulated that Oriental would contribute capital for the procurement of masks. Mickir would order the masks and once delivered, they would attend to the sale of the masks to the public.
“The proceeds generated from the sales, after the deduction of all costs incurred in respect of the procurement of the masks, would be shared between the parties 50/50.”
Mickir proceeded to order 70 000 masks at a price of just over N$4 million from another South Africa company, Mining World Investments. Mickir claims that Mining World however only delivered 29 360 masks at the end of August last year.
Still, Mickir says they paid over N$600 000 to Oriental Tobacco at this stage.
Then, in January, they realised the masks were “counterfeit masks, which resulted in [us] being unable to sell the masks to the public.”
Mickir has now sued Mining World Investments in South Africa, and argues that considering the new deal and the shared risks, the company did not breach the initial agreement.
Yesterday, the case was postponed to 10 May for a case management conference by High Court judge Herman Oosthuizen.
Mickir is represented in court by Francois Erasmus while Astrid Feris of Sisa Namandje & Co is acting on behalf of Oriental.