Breach of Contract May Cost Somalia Millions

A court may force Somalia to shell out millions of dollars in breach of a contract  the previous Federal Government under President Hassan Sheikh Mohamud had signed with a Dutch company.

An investigative report published by wardheernews, a Somali news website, brings to light how pledges made at London Somalia Conference in 2013 and a subsequent one held in Brussels in 2014 led the the Federal Government of Somalia to contract a Dutch company, Atlantic Marine and Offshore Group (AMO), to build ships for “Somali coastal guards”.

Somalia and AMO signing the contract on July 29, 2013

Complications emerged when the Dutch company invoiced the  Somali government, which did not honour the agreement on grounds that it does not have contract documents it had expected to receive from the contractor. In 2016 the Somali Ambassador to EU, Ali Said Fiqi, paid a visit to a shipyard event under the rubric “made for Somalia” although relations between the Somali Federal Government and the Dutch company had then soured  beyond repair. ” All indications seem to suggest that AMO will win the arbitration in Rotterdam, Netherlands, and that Somalia will have no recourse but to abide by the legally binding decision. Sources have told me that the Dutch government has been pressuring the Somali government to accommodate AMO and pay millions of dollars in a settlement” writes Hassan Abukar, the author of the report.  

The Federal Government Somalia, already grappling with maritime dispute with Kenya, has not  commented on its role in the court proceedings or whether  it has been aware of the breach of contract case against its predecessor.