Supreme Court Upholds 25-year Lease Cancellation

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 The Supreme Court has upheld a 2014 lower court ruling against the Liberia Materials Limited, which found it breached a 25-year old lease agreement with the National Port Authority (NPA).

  The decision was released by Associate Justice Philip A.Z. Banks on February 10, after denying an appeal from the cement company to reverse an earlier verdict of the Civil Law Court.

  The dispute and legal proceedings which began last year, stemmed from a 2010 lease agreement between the NPA and the Liberia Material Limited which Judge Peter Gbeneweleh cancelled because, according to him, LML breached the agreement and the terms by not commencing construction work within the 90-day period.

  The property is a 7. 414 acre parcel of land situated within the Freeport of Monrovia, which the Liberia Material Limited leased for the purpose of constructing cement grinding manufacturing, storage and administrative facilities.

   The LML agreed to invest US$5m in the first five of the 25 years.

  In the ruling the Civil Law Court Judge stated that, “Since the company admitted that they have not been able to undertake the construction work for four years following the execution of the agreement, this certainly provided a clear and undisputed basis for its cancellation.”

  It was based on the verdict that lawyers representing the company took an appeal before the Supreme Court.

  The lawyers argued that the lawsuit for cancellation was of a purely factual nature, which should have been submitted to the trial jury for its determination.

  Instead, Judge Gbeneweleh decided to handle it without the jury, which they alleged, was in gross error, basing his determination only on the fact alleged by the parties in the respective pleadings.

  “The Judge should have limited himself to ruling on the law issues rather than intruding into the facts which under the law are reserved for the jury,” they emphasized in the appeal.

  They acknowledged breaching the agreement and the terms by not commencing construction work within the 90-day period.

  But, they contended that they did not meet up with the agreement plan because they could not obtain cooperation of relevant government officials and agencies in securing the required permits to commence the construction.

  According to them, Judge Gbeneweleh denied them due process, and deprived them of the opportunity to present evidence in their own defense.

  However, Justice Banks in his opinion, stated that  while it would have been more prudent for Judge Gbeneweleh to have submitted the facts to a jury trial, the error was excused by the acknowledgement by the company.

  He further explained that as the action of the Judge in decreeing the cancellation of the lease agreement resulted in no harm, injury, prejudice, injustice or denial of due process, recognizes the principle of acknowledgement and the admission.

  “The error made by the judge cannot be deemed to be one of a reversible nature,” he emphasized.  “We, therefore, cannot sustain the contention of the company that the error was a reversible one and that we should therefore reverse the decision of the judge.”

  In his concluding statement, Mr. Justice Banks declared: “The ruling of the trial court adjudging the company in violation of the lease agreement executed with the NPA and decreeing the cancellation of the said agreement is hereby affirmed and confirmed.”

  In 2014, NPA instituted an “Action for Cancellation of Lease Agreement against the Liberia Material Limited,” contending that since they entered into the lease agreement on July 1, 2010, a period of three years and four months, the company never made  any attempt to commence construction work on the leased property.

  It further argued that the agreement provides that upon the signing of the agreement, the company was to commence the construction within 90 days immediately, but if they failed to do so, the NPA had the right to terminate the contract.

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