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Tuskys asks court to dismiss Sh750m claim over breach of contract

By Kamau Muthoni | November 10th 2015
By Kamau Muthoni | November 10th 2015

Tuskys Supermarkets has defended itself over a Sh750 million claim by a businessman who alleged that the supermarket chain had failed to live up to its end of the bargain after construction of a building to house one of its Nakuru branches.

The supermarket in its response filed by James Muchemi stated the man had instead breached the agreed contract and should not to get a penny as an award from the court.

Mr Muchemi was claiming Sh165 as compensation and a further Sh600 million for failure by the retail supermarket chain to occupy the building as it had been allegedly agreed.

However, Tuskys witness Stephen Mukuha in his response filed in the court’s registry said the businessman had taken six years to complete the premises, contrary to the six months agreement between the two parties.

Mukuha said Muchemi did not deserve any pay as he had actually leased the same building to a competitor, Naivas Supermarket and used the proceeds to settle a debt he owed to Barclays Bank of Kenya.

“The fact that the plaintiff has the temerity to claim the liquidated damages even when it was clearly the one in breach of the contract is another clear manifestation of the plaintiff’s greed for money, which is the reason we got to this mess in the first place,” explained Mukuha.

Estimated loss

He added that the supermarket lost over Sh200 million as a result of the delay to hand over the building, adding that the man had poorly managed money that was advanced to him to facilitate completion of the building. Mr Muchemi was to hand over the building on December 1, 2010.

“The plaintiff’s failure and inordinate delay in completing the project was self-inflicted and was primarily as a result of the plaintiff’s greed for more rental space and poor financial management of the funds advanced.”

“The defendant estimates that it lost up to Sh202,500,000 in operating income as a result of the failure by the plaintiff to complete and hand over the premises as required by the supplemental agreement,” Mukuha added.

Mukuha also pointed out that by the time the businessman wanted to handover the building, it lacked basic amenities. Tuskys wants the case be dismissed and court to allow its counterclaim for breach of contract.

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