The Federal Supreme Court Cassation Bench on July 27, 2017, lifted the trade license revocation of Tiens Ethiopia Plc, a supplier of various items, mainly medical supplements, ordering the Ministry of Trade (MoT) to review the case again and pass an appropriate verdict.
The ruling comes eight months after MoT suspended the license of Tiens for violation of the commercial registration and business licensing proclamation issued in 2002. The letter also stated that the suspension should only be lifted if the Company adjusts the way it operates.
As a response written in January and February 2016, Tiens demanded from the Ministry a detailed explanation about the suspension. However, the Ministry further revoked the license in February 2016, stating that Tiens was granted its license back in September 2014 after promising not to repeat mistakes of violating the proclamation of commercial registration and business licensing.
In September 2014, the Company hired a foreign national as its manager despite the country’s laws, according to MoT.
But Tiens demanded further explanation for the revocation as it was unsatisfied with the reason stated by MoT. Hence, Tiens lodged its appeal to the Federal High Court on April 8, 2016, claiming that MoT had failed to hear their side while revoking the Company’s license and refused to provide reasons for the revocation.
In its statement of defence lodged in June 2016, MoT defended that it had already warned Tiens to cease its pyramidal network, which is prohibited by the country’s laws. MoT also claimed that informing the Company before revocation is provisional but not mandatory.
A pyramid network is a business model that recruits members via a promise of payments or services for enrolling others into the scheme. In the system, an organisation compels individuals who wish to join to make a payment. In exchange, it promises its new members a share of the money taken from every additional member they recruit.
After hearing both sides, the Federal High Court sustained the revocation of the Company’s license reasoning that as far as the Ministry once gave a warning, it can revoke the license without any precondition.
Disappointed with the judgment of the High Court, Tiens appealed to the Federal Supreme Court, which directly referred it to the Cassation Division in December 2016.
In its appeal, Tiens explained that the revocation did not follow the procedures put forth by Ethiopian law, stating that the lower court made basic errors of law in accepting the MoT claim for not giving notice during the revocation.
MoT responded to the Cassation Bench in May 2017, and requested the bench to sustain the decision of the lower court as it made no legal errors.
After hearing both sides, the Cassation Bench, during the last session, ruled that MoT has to reconsider the revocation by giving detailed reasons and justifications for the revocation and at the same time hear the explanations from the Company before passing any decision.
The ruling of the Bench brought relief to the Company, which stocks perishable items bought with foreign currency, according to Tibebu Tesfaye, the Firm’s lawyer.
“We will try to resume our work as soon as possible,” Tibebu told Fortune.
The case did not follow the right procedures, according to Yohannes Woldegbrel, an expert in commercial and tax law. Yohannes believes the case was supposed to be handled by the Tribunal of Trade Practice and Consumers Protection Authority, which prohibits a business from pyramidal network schemes.
Despite our repeated efforts, representatives of MoT refused to make any comment on the issue.
Source : AddisFortune