WALVIS BAY – The Henties Bay municipality’s debt-collection contract with RedForce Debt Management cc will remain intact after the High Court of Namibia ruled in favour of the company.
In a verdict delivered on Monday afternoon, Judge George Coleman ordered that RedForce’s contract with the Henties Bay Municipality for debt- recovery services remains in effect until the ongoing dispute over its termination is resolved. The case was heard on an urgent basis on 5 November, following the municipality’s decision to terminate the contract, which was awarded in December 2021.
RedForce’s legal representative Margaret Malambo filed an urgent application last week to stop the municipality from terminating the contract.
“This termination was abrupt and unjustified. The municipality has yet to provide any details of its internal review, or allow RedForce a chance to respond to their findings,” she had said in her affidavit. RedForce claims the debt-recovery service has been successful,
having collected over N$43.1 million on behalf of the municipality since early 2022. They further stated that they have significantly reduced outstanding debts.
Malambo argued that this track record does not indicate any failure on RedForce’s part, adding that the company was unaware of any complaints from the municipality regarding
performance.
“We have met all contractual obligations. The decision to terminate the contract not only violates RedForce’s legitimate expectations, but disregards the due process we are entitled to under the law,” she stated.
In his judgement, Coleman noted that the contract included clear dispute resolution terms, which should have been followed, rather than being unilaterally terminated. He acknowledged RedForce’s significant financial contributions on behalf of the municipality, amounting to more than N$43 million, and found no prior indication of dissatisfaction with the company’s performance.
“In my view, there is an agreement under which both parties have performed for at least two years. No one raised the validity of the agreement then. This agreement contains stipulations for the termination of the contract and dispute resolution, including arbitration,” he said in his ruling.
Coleman also stated that it is not up to the municipality to decide whether arbitration is warranted.
“I agree with counsel for the applicant that the termination of the agreement should be interdicted, pending the outcome of the dispute between the parties,” he added.
The municipality’s counter-application, which sought to declare RedForce’s contract invalid on procedural grounds under the Public Procurement Act, was removed from the roll as part of the court’s decision.
The judge also dismissed the counter-application, noting that the municipality and RedForce had consistently honoured the contract over the past two years without issue.
The municipality has been ordered to cover RedForce’s legal costs, including those of one instructing and one instructed counsel.