The High Court of Namibia has temporarily suspended the Walvis Bay Municipal Council’s decision to terminate its debt-collection agreement with RedForce Debt Management CC, pending further legal proceedings. The court also ordered the municipality to restore the company’s mandate within 24 hours of service of the order if the termination had already been implemented.
In an order issued on Monday, 19 October, High Court Judge Michael Mtambo suspended the implementation of specified parts of the council’s 7 October resolution, as well as its subsequent notice of immediate termination, pending the final determination of further legal proceedings or another court order.
The order requires the municipality to preserve the existing contractual position while the dispute continues. It does not constitute a final ruling on the validity of the agreement or the lawfulness of its purported termination.
The court prohibited the municipality, its Chief Executive Officer and officials acting under their authority or instructions from implementing the disputed termination. This includes withdrawing RedForce’s collection mandate, blocking access to debtor accounts, data or municipal systems, withholding the cooperation required under the agreement, or transferring the company’s existing contractual work to the municipality or another service provider as part of the disputed termination.
If the termination had already been implemented, the municipality must restore RedForce’s mandate, access to debtor accounts, data and systems, and the necessary contractual cooperation within 24 hours after service of the court order. The municipality must also correct any instruction it issued stating that RedForce’s mandate had ceased because of the disputed termination.
The dispute intensified after Urban and Rural Development Minister James Sankwasa called on the municipality in September to cancel the agreement, raising concerns about its legality and the additional charges associated with debt collection.
Sankwasa questioned the agreement’s legal validity and raised concerns about additional costs that residents could face in connection with their outstanding municipal debts.
On 7 October, the council resolved to treat the agreement as invalid and terminate it with immediate effect.
RedForce subsequently approached the High Court, challenging the decision and seeking enforcement of the agreement. The company’s application sought to prevent the municipality from implementing the termination while the dispute was being addressed through legal proceedings.
The municipality’s position is that the agreement is legally defective because the required signing procedures were not followed. This position remains part of the broader dispute and has not been finally determined by the court.
The court expressly stated that its interim relief does not prohibit a lawful investigation or forensic audit. It also clarified that paragraph (6) of the council’s resolution, concerning an independent audit measure, was not suspended.
The order further states that the interim relief does not authorise unlawful collection measures, determine any debtor’s liability or extend the contractual duration of the agreement.
The substantive legal dispute will continue, with the parties’ competing positions on the agreement and its purported termination still to be determined in further proceedings.
For now, the court order requires the existing contractual position to be preserved pending further legal proceedings. The dispute over the agreement’s validity and the lawfulness of its purported termination remains unresolved.
By Eileen van der Schyff
