Telkom wins fleet management court battle

Johannesburg - A fleet management business has lost its court battle with Telkom over a contract dispute.

Daimler Fleet Management (DFM) - a subsidiary of Mercedes Benz Financial Services that trades as Debis Fleet Management - launched a court action against Telkom after losing a contract to supply the telecom company's national team of field technicians with 6 000 vehicles.

DFM won a contract in 2000 to manage Telkom’s fleet of vehicles in South Africa. Telkom renewed the contract in 2008 and then extended it twice in 2012 and 2013.

But Telkom then placed its fleet management business out on tender last year and Bidvest won the contract.

Telkom said its contract with DFM made provision for a three month “lead out” phase after the expiry of the contract.

A dispute arose, however, between the two companies over whether vehicles used by Telkom’s national team of technicians were included in this lead out phase.

DFM subsequently launched a court action to obtain “clarity regarding certain important topics relating to the expiry of the agreement”, a spokesperson for the fleet management company told Fin24 earlier this month.

But the High Court in Pretoria on Friday ruled against DFM on the matter and ordered that Daimler pay the costs, including those of Telkom.

“The court denied DFM’s application and found in favour of Telkom, which DFM will abide by. We will study the judgement and proceed accordingly,” Jeanette Clark, manager for group external affairs and communication at Mercedes-Benz South Africa, told Fin24.

DFM's existing agreement with Telkom expired on March 31 2015, but has continued amid the court battle.

Subsequently, Telkom says the court’s decision opens the way for a transition of the fleet management contract to Bidvest.

“We are pleased the judge concurred with our view and that our transition to Bidvest will continue to be undertaken in a seamless and professional manner,” Jacqui O’Sullivan, the managing executive for group communication and public relations at Telkom, told Fin24.