Simba Corp setback in partnership row over Renault deal

Motor vehicle distributor Simba Corporation has suffered a setback after the Court of Appeal declined to grant it an injunction in the dispute over the Renault car franchise whose contract was terminated by the brand’s owner in June.

The firm had asked the court to issue an injunction stopping Caetano Formula East Africa SA from entering into dealership agreement with other parties until their dispute is determined.

Simba Corp argued that Caetano had already acquired premises with a view of taking over its business and that it has actively approached its employees for the purpose of setting up of the Renault business.

Further, Simba said that the former partner had passed a resolution to incorporate another company to wholly take over the business and its undertakings.

Simba Corp told the court that it risks losing its investment in the form of direct capital injection and customer base which it had established over the last four years.

But justices William Ouko, Roselyn Nambuye and Martha Koome dismissed the application on Friday, saying it was a fact that the contract between the parties lapsed in June.

“Whether the agreement was properly or lawfully terminated or whether the parties remained in business even after the expiry of the contract, will be subject of the arbitral proceedings and this court cannot make definitive findings at this stage,” the Judges said.

Simba had argued that it had built its brand and trained employees, established facilities such as show rooms, workshops, special tools and diagnostic equipment.

Lastly, the company was fearful that its reputation, which it had built for over 50 years in the market, was at risk.

The distributor wanted, pending the hearing and determination of the case, an injunction issued directing its former partner to continue with the obligation and allow it to proceed with distribution of Renault, its spare parts and accessories until the matter was heard. The matter comes up in January.

Simba has been distributing and selling various brands of motor vehicles, spare parts and accessories in the country.