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Iheya to challenge ¥146,360,000 a court construction judgment

Date Posted: 2007-06-14

Faced with the prospect of bankruptcy if it must pay a court-ordered judgment over a broken construction contract, Iheya Village officials say they must appeal the decision to a higher court.

Naha District Court has awarded a Tokyo waste treatment facility development vendor ¥146,360,000 in its claim Iheya Village wrongfully broke a contract for a new waste treatment plant. The Tokyo company was awarded the contract in 2003, but six months into the contract the village mayor terminated it.

In court, Mayor Shinsuke Nishimine denied any wrongdoing, arguing the contract was never formally issued. The court disagreed, noting the “even the official seal of the village was in the contract paper. The contract was legal.” The mayor insists there were only planning documents, but no contract. Nishimine says the seal must have been placed on the contract by a village employee, without his knowledge, “on his own decision without asking me.”

The court says “We can’t believe this. The staff works under the village mayor. How could an employee stamp papers without asking the mayor or senior village officials. No, it can’t”.

Iheya Village is appealing to the high court, but says “if we lose to the upper court, the village shouldn’t pay. The village mayor should pay the ¥146,360,000 by himself.” Village Assembly members and its chairman are also probing the question “Why did the village mayor make contracts with two construction companies in the first place?” They now say the mayor agreed to a contract with the Tokyo Construction Company for ¥800,000,000, but six months later changed to another company whose contract price was ¥1,200,000,000, more than 50% higher than the original contract.

Mayor Nishimine has told the Assembly members he made the company switch because the second company “would build a better quality facility for burning trash.” He assured the Assembly he will “take care of this. I’ll tell the first construction company and explain it to them.” Village residents are joining the Assembly in saying “If he loses in court, we’ll recall him.”

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