The High Court is seized with an urgent application by Namcor seeking the liquidation of Enercon Namibia over the outstanding debt of over N$70 million arising from a breach of the Fuel Supply Agreement between the two companies. 

In its Notice of Motion, Namcor has requested the Court to issue a liquidation order against Enercon, claiming that the company has defaulted on substantial debt payments, despite having entered into a repayment plan under the terms of a settlement agreement. 

Namcor’s Board Chairperson Engelhardt Kongoro, in an affidavit filed in court with Judge Shafimana Ueitele, asserts that Enercon has failed to meet its obligations under the agreement, and after numerous attempts to resolve the matter amicably, Namcor now seeks the drastic remedy of liquidation to recover the debt owed.

Namcor alleges that the outstanding debt is the result of Enercon’s failure to make the agreed-upon monthly payments of N$500,000, which were part of a settlement arrangement reached in 2022 after Enercon owed over N$73 million to Namcor. 

The applicant now seeks to liquidate Enercon to recover the outstanding sum, which has continued to grow due to Enercon’s default and ongoing non-payment.

In response, Victor Simaneka Malima, Director of Enercon, filed an affidavit in opposition to the motion. 
Malima denies that Enercon is in breach of the settlement agreement and challenges the proposed liquidation. 

He explains that the debt was originally settled through a repayment plan, agreed upon when Namcor was under the management of its fired MD, Immanuel Mulunga, but in April 2023, Namcor unilaterally ceased supplying fuel to Enercon, which Malima argues constitutes a breach of the Fuel Supply Agreement. 

Enercon contends that this cessation of fuel supply undermined the core of their contractual relationship and justifies their decision to suspend payments under the principle of “the right to suspend performance when the other party fails to perform its obligations.”

Malima further proclaims that Enercon remains willing to pay the remaining N$6 million, which is the balance of the debt after the cessation of fuel supply, but disputes the larger amount demanded by Namcor. 

The first respondent claims that the absence of the signed agreement has made it impossible to properly assess the terms and conditions, including the precise amount owed.

Enercon has also indicated that it may file a counterclaim for damages, which would be based on Namcor’s failure to continue supplying fuel, thereby breaching the contractual obligations under the Fuel Supply Agreement. 

Enercon suggests that any liquidation proceedings should be delayed until this counterclaim is fully considered.