Denel coy over lawsuit

Denel is remaining coy regarding a €6.5 million 2001 contract that subsequently went sour and may now result in it facing a lawsuit for damages.
The Denel annual report notes that the company was contracted at the turn of the century to develop “a gyrostabiliser platform assembly for a certain helicopter”.
Denel says it was notified during 2008 of the unidentified customer`s intention to cancel this contract.
“The reason for the termination was an alleged breach of the contract,” the report says, although a footnote describes the reason as an “allegation of non-performance”.
“The contractor pointed out that they intended to claim damages from the group following the termination of the contract,” the annual report continues.
“The contractor would provide full details of their claim for damages in due course, by no later than September 2009.
“Management will defend Denel in any potential claim by the contractor. The costs of the alleged damages are not yet known.”
Asked for further details on the matter, Denel group executive business development and corporate affairs Zwelakhe Ntshepe said the “relevant statement in the annual report is due to the existence of a potential contractual claim for damages by a customer following termination of the relevant contract for alleged breach of the contract.
“The post termination process is subject to standard contractual dispute resolution processes, which is ongoing and confidential between the parties. 
We are accordingly not at liberty to provide further comments or information, in terms of the confidentiality restrictions of the relevant contract,” Ntshepe said.

Pic: Denel logo