Key points
- Namco sued Benco in 1992 for US$72 million in damages over an alleged breach of contract.
- The 1994 trial court found the contract had been signed but dismissed Namco’s claim under Benco’s vagueness defence.
- Namco has written off the entire cost of the litigation to date.
- Development of the mining system with SubSea Offshore (Dresser Industries) is proceeding, with commercial production at the Luderitz concessions due to start in the third quarter of 1997.
The Appellate division of the Supreme Court of South Africa today
announced its judgement in the company’s appeal against Benco. Five judges of the Appeal Court were divided in their findings and the appeal was unsuccessful on a split 3:2 decision in favour of Benco.
The appeal was heard in consequence of an alleged breach of
contract by Benco. In 1992 Namco sued Benco for damages in
amount of US$72 million. Benco CEO Mr John Wilson denied signing an agreement with Namco and filed a subsidiary defence that certain terms of the contract were void for vagueness. In 1994 the trial Court of South Africa upheld Namco’s contention that the agreement had been signed. The trial court also upheld Benco’s subsidiary defence and dismissed Namco’s claim. Namco successfully applied for leave to appeal to the Appellate division of the Supreme Court of South Africa.
The company is disappointed that the Appeal Court did not reverse
the decision and the judgement was divided by such a narrow margin. However, it feels vindicated as it proved in the trial court that the
agreement had been signed by Benco.
In proceeding with the appeal, Namco’s board of directors evaluated
that the only downside to the company was the payment of legal costs
against the probability of successfully obtaining a substantial
judgement against Benco. Namco has written off the entire cost of the
litigation to date.
The outcome of the appeal has no influence on Namco’s operations.
The development of the mining system with SubSea Offshore (Dresser
Industries) is proceeding well. The company is focusing on its
production developments and will commence commercial production in
its Luderitz concessions in the third quarter 1997.
