Redforce wins case about Henties Bay contract dispute

Redforce Debt Management has won a case against the Henties Bay Municipality following a decision to terminate its contract with the local authority.

The debt collector was awarded a contract to collect millions of Namibia dollars in unrecovered rates and taxes in January 2022.

Debts to the tune of more than N$43 million were then collected between February 2022 and September 2024.

However, the Henties Bay Town Council decided on 6 October to end the contract with the company.

In a judgement delivered on Monday, judge George Coleman concluded that the municipality did not have the power to arbitrarily terminate the agreement and should not have interrupted a dispute resolution process that started on 15 October.

“In my view, there was an agreement in terms of which both parties performed for at least two years. This agreement contains stipulations for the termination of contract and dispute resolution including arbitration,” Coleman said.

“The first respondent [town council] cannot arbitrarily terminate the agreement and should not have interrupted the process for amicable resolution started on 15 October 2024,” he also said.

“It is not for the [municipality acting chief executive] to decide whether or not arbitration is warranted. I agree with counsel for [Redforce] that the termination of the agreement should be interdicted pending the outcome of the dispute between the parties,” said the judge.

Redforce’s chief executive, Julius Nyamazana, has welcomed the judgment.

“We are glad that the court has found that we need to work within the parameters of the law. Redforce has so far collected more than N$43 million for the municipality, and we are more than happy to carry on our work.

“We hope that we will ultimately be able to reach an amicable solution with the municipality and continue to assist its debt collecting efforts as we have always done elsewhere,” Nyamazana said on Monday.