Zenith Carex International Limited, a Nigerian logistics enterprise, has faced a setback as a defamation lawsuit filed against Chemonics International, Inc. was dismissed by the United States District Court for the District of Columbia. The court ruled that the defamation claims were precluded by a prior settlement agreement between the two firms.
According to the judgment shared with PREMIUM TIMES, the court determined that the 2022 "full and final settlement" concluded all claims between the parties, which included defamation, tortious interference, injurious falsehood, and breach of contract related to their subcontract and overall business dealings.
"For the reasons stated, Chemonics’ motion to dismiss is approved, and Zenith’s claims are dismissed with prejudice. Further, the parties are instructed to collaborate and submit a joint status report outlining the next steps concerning Chemonics’ counterclaims by April 1, 2026," presiding Judge Loren Alikhan stated on March 18.
Background of the dispute reveals that relations between the companies soured after Zenith Carex entered a subcontract in 2017 to provide logistics and supply chain services for Chemonics in Nigeria, part of large US-funded health initiatives managed through the United States Agency for International Development (USAID).
As part of its role, Zenith Carex was responsible for distributing medical supplies nationwide, managing both long-distance transport and final delivery of health products. Conflict intensified in 2020 when Chemonics notified U.S. authorities about potential overbilling by Zenith for logistics services, which led to investigations in the U.S. and triggered various legal actions in Nigeria, including scrutiny from the Economic and Financial Crimes Commission (EFCC).
Subsequently, the two companies attempted to resolve their disputes through arbitration, eventually reaching a settlement in 2022 which included a comprehensive mutual release clause. This meant both parties agreed not to pursue any claims related to their subcontract or performance matters.
Following this settlement, Zenith approached the U.S. court, asserting that Chemonics had issued defamatory statements to American officials and propagated those allegations through media platforms, thus damaging its reputation.
Chemonics contended that these claims had been extinguished by the earlier agreement, thereby preventing Zenith from reviving them in court.
In her ruling, Judge Alikhan concurred with Chemonics, highlighting that the allegations of defamation were directly traceable to issues already resolved in the 2022 settlement. The court concluded that the claims were tied to previous subcontract performance disputes, specifically the earlier accusations of fraudulent practices. Furthermore, it noted that the settlement encompassed not just contractual disagreements but also tort claims like defamation and business interference.
The court emphasized that parties can waive even unknown claims when a settlement clearly indicates such intent. Zenith's argument that the settlement lacked consideration or could not bar future claims was rejected; the judge described the settlement as a valid and binding contract with mutual obligations.
This ruling comes shortly after Chemonics reached a $3.1 million settlement with the U.S. Department of Justice in December 2024, settling civil allegations under the False Claims Act regarding inflated charges to USAID, which also involved Zenith Carex as a subcontractor.
Separately, in Nigeria, the Global Fund to Fight AIDS, Tuberculosis, and Malaria is contesting jurisdiction in a separate case in the Federal Capital Territory (FCT) High Court, claiming improper service of court documents related to Zenith Carex’s actions.
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