IN a turning point for the case between PSA Automobiles SA and various Namibian government agencies, in which PSA sued the government for N$80 million, the High Court of Namibia has ordered that the matter be removed from its roll and the dispute proceed to arbitration.
This decision, rendered in May by justice Shafimane Ueitele, emphasised the implementation of clause 20 of the joint venture agreement, which prescribes arbitration as the remedy for unresolved disputes between shareholders. With this order, the court concluded its involvement in this particular issue.
Consequences of the conflict are, however, evident at the Peugeot Opel Assembly Namibia (Poan) plant at Walvis Bay, which is currently under care and maintenance.
“We are still selling vehicles, but we are not assembling any more,” Poan’s chief executive officer Robert van Rooijen told The Namibian yesterday.
The company also had to retrench 17 employees and has around 80 saleable vehicles left. When pressed for more details regarding the legal proceedings, Van Rooijen opted for discretion, indicating that he was instructed to remain “neutral”.
Further shedding light on the situation, Poan board member Michael Humavindu, who is also Ministry of Industrialisation, Trade and SME Development deputy executive director, confirmed that the plant has been under care and maintenance since the court’s intervention in April.
“The case was already finalised when the court removed the matter from the court roll,” Humavindu stated. “The shareholders will meet very soon.”
The crux of the lawsuit was rooted in the Namibian government’s alleged failure to exempt Peugeot’s joint venture, Poan, from specific duties and taxes. This was meant to promote the export of vehicles assembled at Walvis Bay to other countries within the Southern African Customs Union and the Southern African Development Community.
Despite being given numerous opportunities, Peugeot contends that the Namibian government did not fulfil its obligations.
“We came back and said no. First, the agreement states clearly what we were supposed to do and we have delivered on those terms,” Humavindu emphasised, also pointing out the mutual benefits and shared risks of such joint ventures.
“We have also invested in the project. You cannot claim money from us when we have also poured resources into it.”
In a bid to debunk the narrative of the government’s alleged failures, Humavindu highlighted that the company was registered with the Namibia Revenue Agency to enjoy advantage of specific benefits.
“We showed them where they might have misunderstood.
They were provided the necessary support as per the agreements. Their claim that they were left unsupported is simply not accurate,” he stated.
Humavindu stressed that the legal tussle was not about victory, but about upholding the essence of the agreement.
“We don’t believe that we are winners. It’s about mutual respect and trust. We’re in this to ensure the joint venture’s success,” he noted.
To date, since its inauguration by president Hage Geingob in 2018, only 150 vehicles have been assembled at the facility.
Industrialisation minister Lucia Iipumbu pointed out in a consultation last year that an 18% tax was a significant obstacle to the N$190 million assembly plant’s progression.
The case originally filed by PSA Automobiles SA named several defendants, including the Government of the Republic of Namibia, Peugeot Opel Assembly Namibia (Pty) Ltd, the attorney general of Namibia and the Namibia Industrial Development Agency.
The basis of the court’s recent decision lies in clause 20 of the joint venture agreement, dated 26 February 2018, which mandates amicable conflict resolution and, if unsuccessful, arbitration is the subsequent step.
Email: bottomline@namibian.com.na
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