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2022: Oracle's refusal to pay Plexada System Integrators $56 million under government contract
On June 16, 2022, it was revealed that Nigerian company Plexada System Integrators had sued Oracle for alleged breach of contract and non-payment of millions of dollars owed for helping to execute the Lagos State Government's IT contract.
Plexada is demanding almost $56 million in lost revenue, damages and legal fees for work performed between 2015 and 2020.
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A Plexada partner has filed an application with the Lagos State High Court describing the dispute. In the document provided, Plexada accuses Oracle of revenge and trying to destroy the firm's business for demanding payment for its services.
According to a partner statement, Oracle in 2014 named Plexada "Oracle Operations Partner of the Year in" and To Africa had a positive business relationship with the IT contractor. In 2015, a CIOReview article called Plexada a "gold" partner for Oracle.
In 2013, Oracle's long-term IT agreement with the Lagos State government, involving the provision of software, hardware, training arrangements and maintenance, ran into problems - the government is alleged to have failed to pay the agreed fee for the services provided.
On November 13, 2013, at a meeting between representatives of Oracle and the government, the two sides appointed Plexada to mediate the settlement of the relationship - without prior notice to Plexada, according to a court filing.
The deal, as outlined in the High Court application, stipulated that Plexada had to repay funds owed by Oracle from the government as of 2013 and continue to do so for the next six years. The commission due to Plexada for 2013 was to be $283 701.44.
In a follow-up meeting between regional executives at Oracle and Plexada, the agreement is said to have been expanded to cover app support and make Plexada eligible for 20% of revenue from the government deal.
Events almost immediately did not develop according to plan. Oracle and Plexada were allegedly invited to meet with senior government officials on April 7, 2014 to discuss revenue management opportunities in the public sector.
 | The meeting revealed that Oracle was trying to take the project away from Plexada and hand it over to another company, Catalyst, the statement said. This was a project that was clearly defined and initiated by Plexada, and Oracle they attracted at a later stage. |  |
| | At this meeting, Plexada became clear that some kind of fraudulent activity was being carried out against the IT contractor firm and that it was being organized by employees of the Lagos State Government in conjunction with Oracle employees. | |
The statement alleges that Oracle and the Lagos State government conspired to strip Plexada of its intermediary positions and co-opt the company's future business opportunities. The government is alleged to have drawn up an agreement to pay Oracle's services directly Oracle in violation of an agreement with Plexada to receive fees and provide maintenance.
Oracle, the giant corporation allegedly retaliated by launching an information campaign against it to strip it of future deals and withdrawing money from its Oracle partner account to cover the outstanding amount of debt owed to the Lagos government.
| | Oracle maliciously debited Plexada for the amount not paid by the Lagos State Government, the statement said. | |
Oracle subsequently downgraded the company's partner status for "failing to transfer money" that Plexada was to receive from the government on behalf of Oracle.
Efforts to rectify the situation continued for several years, culminating in a stream of 13 emails to relevant Oracle employees between February 4, 2020 and May 19, 2020. According to the partner, he received one response - a message asking him to set up a meeting to discuss the dispute, after which no follow-up action followed.
In addition to monetary compensation, damages and legal costs, Plexada wants to be reinstated as an Oracle partner and assigned the appropriate specializations in the Oracle partner network. What's more, the company wants Oracle to run full-page ads in four newspapers - three Nigerian and one Ghanaian - that Plexada is an Oracle partner with a decent reputation.
Oracle did not comment on the situation.[1]
Notes
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