The case in which Debswana Diamond Company is facing a P110 million lawsuit from a company known as Infotrac got into a higher gear last week.
The High Court sought clarity on the legal status of the alleged contract entered into between the parties. As the case nears its end, Justice Abednego Tafa of the Gaborone High Court peppered attorneys on both sides with hypotheticals in an attempt to establish if the present case passes the test of Turquand Rule.
In terms of the Turquand Rule also referred to as the indoor management rule, an outsider contracting with a company in good faith is entitled to assume that the internal requirements and procedures have been complied with.
Therefore, the company will be bound by the contract even though all matters of internal management and procedure required to enable the representative to act on behalf of the company have not been complied with.
While Infotrac insists that it entered into an oral agreement with Debswana as represented by some of its senior executive management officials and demanding P110 million for the services rendered, the diamond miner on the other hand maintains that they did that in their personal capacity.
With both sides informing the Court that they were resting their case last week, Justice Tafa noted that a key question remains; whether a corporate company should be held liable when its executive management have entered into an agreement which contravenes its internal processes.
“I will need you to address me on the Turquand Rule in relation to this case before we close,” he said. Lawyers for Infotrac and Debswana are expected to address the issue in their heads of arguments which will be submitted to court before June this year.
Meanwhile when testifying before the High Court, former Debswana managing director, Balisi Bonyongo told the Court this week that he had a preferred candidate to succeed him. Under cross examination by Infotrac lawyer Kgosietsile Ngakaagae, Bonyongo said his preferred candidate was Bonyongo’s successor, the late Albert Milton. He further indicated that his preferred candidate was only communicated to the Board of Debswana Diamond Company in writing.
Asked if he communicated his preferred candidate to Debswana’s former head of security, Mpho Kewakae, Bonyongo answered in the negative.
He also confirmed that he did not communicate his preferred candidate to former Debswana Head of Human Resources one Mazwigwila and Debswana head of security at Jwaneng Diamond Mine one Keitumetse.
Earlier on, the Court was told how the trio had represented Debswana by engaging Infotrac to run a background check on Milton and lobby for him to succeed Bonyongo.
Bonyongo said the appointment of Debswana managing director was done by the shareholders with ratification by the board. Asked if the shareholders in this instance would be the Botswana Government and De Beers, Bonyongo answered in the affirmative.
“You know a certain Mokgweetsi Masisi who was then the Vice President of Republic of Botswana?” asked Ngakaagae to which Bonyongo answered in the affirmative.
He admitted that he knew former Directorate of Intelligence and Security (DIS) Isaac Kgosi; a unit of the Government of Botswana. He also confirmed that he was aware that former Bank of Botswana Bank Governor was a member of the Board of Directors of Debswana.
The Court had earlier heard how Motshidi lobbied Masisi, Kgosi and Mohohlo to ensure that Milton became the managing director of Debswana.
While being examined by Debswana lawyer John Carr-Hartley, Bonyongo said Milton had the required skills to be the next managing director of Debswana. On whether or not he knew if there was another candidate who had shown interest, Bonyongo said, “Yes it is Lynette Armstrong. He added:“She withdrew her candidacy November of 2017.” Bonyongo further stated that Armstrong had informed him that the best candidate to succeed him was the late Milton.
Both parties were directed to submit heads of argument before delivery of judgement which is expected to be handed down in June this year.
