Corporate News
By SIMON CIURI
In Summary
- Uchumi argues that part of the agreement Uchumi had with the sub-tenants prohibits them from moving to court when disputes arise before going for arbitration.
Uchumi Supermarkets
has asked the High Court to order for an arbitration settlement in a
case pitting the listed retailer against sub-tenants of its specialty
shops seeking to stop their eviction.
The retailer through its lawyer Ochieng, Onyango, Kibet
& Ohaga Advocates argues in court documents that part of the
agreement Uchumi had with the sub-tenants prohibits them from moving to
court when disputes arise before going for arbitration.
“Clause 11 of the agreements entered into by the
parties expressly provide that any dispute, difference or question
which arises at any time between the parties touching on the
construction of the agreements or their rights and liabilities or
otherwise in respect of the matters the subject of the agreements
should be referred to the decision of a single arbitrator,” argues
Uchumi.
Uchumi has 127 specialty shops in its outlets that employ 2,000 people.
The management of the retail chain is reported to
be scouting for traders who will pay a higher rent and bring global
brands to the vacated shops.
It expects this will make the outlets more productive and boost its revenue as it strives to bounce back to profitability.
Specialty shop owners currently pay Uchumi a commission for every product sold.
“The plaintiff have filed the present suit before
this honourable court in defiance of clause 11 of the agreements
entered into by the parties and the present suit is accordingly an
abuse of the process of the court,” says Uchumi. The Nairobi Securities
Exchange-listed retail chain filed the application on Tuesday.
The matter will be heard on October 1.
Barring Uchumi
The High Court on Thursday last week granted an
extension to the sub-tenants barring Uchumi from evicting them or
disrupting their operations until the matter is heard on October 1.
“Interim orders be and are hereby extended until then, October 1, 2015,” ordered Justice Mary Gitumbi.
Uchumi had on August 4 written to its tenants
informing them that the management had reviewed their business strategy
and required the tenants to vacate by mid this month.
“We are terminating your contract due to a change
in business strategy, Kindly note that your last day of operation will
be on September 15,” read a letter sent to specialty shop owners dated
August 4 and signed by the then acting Uchumi Supermarkets chief
executive officer Owino Ayodo
No comments:
Post a Comment