A Kenyan firm has lost a claim of more than Sh800 million against a Netherlands-based brewer over the alleged cancellation of its distribution contract.
Jovet Kenya Ltd had sued Bavaria NV, claiming it had wrongfully terminated an agreement giving it exclusive rights to distribute its products in the country.
In the case before High Court Judge Mary Kasango, Jovet had sought Sh837 million as compensation for investments made to distribute Bavaria’s products over the period of the contract.
Jovet had also asked the court to compel the Dutch firm to pay its financiers as well as for supplies made before cancellation of the contract.
But Justice Kasango dismissed Jovet’s, ruling that there was no existing contract between the two firms.
“Having found that no contract existed between the petitioner and the respondent, it follows that the respondent did not breach the contract since it did not exist, and it follows that the petitioner is not entitled to any remedy. On the issue of costs, I am of the view that costs should follow the event,” ruled Justice Kasango.
The court heard that in 2011, Bavaria had inked distribution deal with Jovet’s sister company in Tanzania – Jovet Tanzania.
But according to Jovet, the deal also included its Kenyan subsidiary.
It claimed that there were letters confirming a contractual relationship to that effect.
According to the Kenyan company, Bavaria had “pleaded” with it to offer its services in Kenya too.
On engagement, the court heard, the firm set aside funds to ensure it carried its end of the deal, although the terms of the contract were different from its Tanzanian subsidiary.
But Bavaria countered that the deal with Jovet Tanzania was “self-containing” and was hence not transferrable to any other company.
“We were aware that Jovet Tanzania, in order to meet its obligations to distribute their products in the Kenyan market, it entered into private arrangements with the petitioner. We were not involved in those arrangements,” argued the Dutch company.