A ROAD Construction Company has sued Access Bank demanding payment of more than K68 million in damages.
Wade Adams Piling and Foundation Zambia Limited claims that the bank’s conduct resulted in it losing a road contract with the Road Development Agency (RDA).
It has asked the Lusaka High Court to order Access Bank to pay K68,002,657.44 as special damages and that the bank further be ordered to pay general damages and interest on the sums found due at commercial bank lending rates.
It stated in its writ of summons that it is a company involved in road construction.
Wade Adams said the company went into a contract with RDA to carry out and complete the upgrading of road MO20 in Central Province, lot one-Landless corner at the sum of K80,002.658.
It was the term of the contract that RDA would make an advance payment of up to a maximum of 15 per cent of the sum upon Wade Adams proving RDA the necessary guarantees from a commercial bank.
Wade Adams was a customer of Access Bank and maintained a current account number 0010011057621. It said that it was agreed that upon Wade Adams providing collateral security that would provide the bank with a 100 per cent exposure cover on its advance payment guarantee to RDA, Access Bank would disburse the funds received from RDA to Wade Adams to facilitate its mobilisation on the Landless Corner project.
Wade Adams alleged that it provided the bank sufficient security which provided 100 per cent exposure cover with the bank.
By the contract dated December 8, 2010, Access Bank agreed unconditionally and irrevocably to provide an advance payment guarantee amounting to K12, 000, 000 against receipts in equal value to be received from RDA as initial advance payment for the project.
It stated that between February and September 2011, the company withdrew 11 cheques payable to its suppliers. On September 27, 2011, it received a notice from RDA terminating the contract on grounds that it was unable to carry out the works.
Wade Adams claimed that as a result, the company had been injured in its credit, its trade and has suffered loss and damage.