Contract dishonoring Issue with Wartsila Pvt Ltd.

2009-10-11T02:00:00.000-07:00

Claim Title: Contract dishonoring Issue with Wartsila

BRIEF FACTS OF THE CASE ARE:

Wartsila Pakistan entered into a lease agreement with the Claimant for a period of five years commencing from and effective 15th August, 2005 with respect to the claimant’s premises (building). Lease agreement

As per clause No.2 of the agreement it was mutually agreed between the parties that if the agreement is revoked before lapse of agreement’s tenure Lessee shall pay the Lesser a sum either equal to twelve months of rent amount or if revoked in the last year a sum equaling rent amount for the remaining period as the claimant had to bear an extra amount for constructing the infrastructure as per requirements demanded by Wartsila Pakistan as mentioned in the Annexures attached to agreement.

However, later, when Wartsila Pakistan had to leave claimant’s rented premises because of its changing business needs or current global economic crises, an agreement revocation notice dated 03-08-2009 was served by the officials of Wartsila Pakistan upon the Claimant while alleging non existence of basic amenities to avoid petty disbursements arising out of agreement. Claimant was shocked by such sudden change in stance by Wartsila since claimant’s property was used freely by them for more than four years. Termination notice by Wartsila is attached as Exhibit B to Claim.

Even before this, the officials of Wartsila Pakistan based in Karachi also misappropriated Rs.241,600/- (out of the rent amount payable to the Claimant) in lieu of water charges deduction but for no fault of the Claimant.
Claimant then sent a response to the notice of Wartsila Pakistan through its Counsels Vide its reply dated 18th of August 2009. In response Claimant received a reply by Wartsila Pakistan maliciously placing false and frivolous allegations of tempering the documents upon the Claimant.

Claimant denied all such allegations since it was neither possible nor logical for the Claimant to tamper the agreement and even if it is presumed that the claimant did that with his own set of document, how can that change also appear at the set of document in possession of Wartsila Pakistan officials at Karachi? Also, it is also significant here that Counsels of the Claimant did not attach any document including the said agreement with their letters, meaning that the agreement in possession of Wartsila Pakistan officials is the same as with the Claimant. Which logically result in a conclusion that any change in agreement was actually made with mutual consent of the parties before signing the agreement.
After claimant’s last communication with Wartsila Head Office based in Finland, he received a response from the legal counsel of Wartsila and concurrently a meeting was scheduled by Wartsila for the amicable resolution of the situation. The meeting was held at Golf Club Karachi on 02-09-2009 and attended by the claimant and Mr. Shujat Qazi, Mr. Moin Arshad and Col. Ijaz Akram Butt from Wartsila. Also a mutual acquaintance of both parties Mr. Maj(Retd) Sohail attended the meeting as an arbitrator.

It was decided in the meeting that, Wartsila would (as per the Clause # 2 of the lease agreement) continue to Pay the monthly rent in a similar 6 monthly installment basis which it used to pay earlier till August 15, 2010. In this regard Wartsila was going to pay 6 months rent immediately. Plus, Wartsila would also pay the water charges deducted earlier amounting to Rs. 241,600/= along with this payment.

It was also agreed in good faith by the claimant that he would use his best efforts to locate an alternate tenant for the Premises and shall continue to do so until he finds an alternate tenant. Wartsila shall also have the option to search for an alternate tenant. The claimant further agreed that if he or Wartsila is able to locate an alternate tenant on same or better rent, claimant shall immediately lease the Premises to such tenant and shall refund any advance rent received from Wartsila for the unutilized period of the lease. The claimant also explained to Wartsila the lack of economic justification of moving to a new location when the agreement is binding for another 1 year. Even in the absence of this condition the total savings to Wartsila from this movement were of less than Euro 12,500/- per annum (Current facility rent – New Facility rent). With such a low amount of savings, the movement with all administrative hassle and to a new and much smaller facility (10% of the current space) was totally unjustified to the claimant. The claimant felt that there was some fishiness in the said deal. The claimant also offered Wartsila to continue with this relationship which has been seamless during the last 4 years.

CLAIM:

The Claimant has the following Claim against Wartsila:

I. Rs.6,000,000.00 (49,600.00 Euros) in lieu of Twelve months of Rent legally payable by Wartsila for the period from August 07, 2009 to August 15, 2010.
II. Rs.500,000.00 (4,135.00 Euros) and $10000.00 (6,865.00 Euros) as borne by the Claimant for legal consultation and Arbitration charges respectively.
III. Rs.241,000.00 (1,997 Euros) (Refund committed by Wartsila Pakistan against wrong deductions of water charges from rent amount payable to the Claimant).

TOTAL CLAIMED AMOUNT: 62,597.00 Euros

For such a renowned organization, which has an annual revenue in Billions of Dollars, we really think that they should not spoil their reputation for such a small amount.

Wartsila Finland Head Quarters were informed about this and were completely updated with the facts related to their regional headoffice in Pakistan as the company name along with it's reputation is being questioned however they completely showed ignorance with this case for such a small amount and no one as of today contacted back.

We really look forward for your comments about this company's presence in Pakistan.

Contract dishonoring Issue with Wartsila (Pvt) Ltd

Contract dishonoring Issue with Wartsila Pvt Ltd.