Tea company battles KTDA over contract termination

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Tea company battles KTDA over contract termination


The Board of Kenya Tea Development Agency Ltd during a press conference at their offices in the KTDA building in Nairobi on December 1, 2021. PHOTO | SILA KIPLAGAT | NMG

Summary

  • Bicorn Exim Ltd argues that after being appointed tea sales broker for Githambo Tea Factory Ltd, he performed his obligations under the tea brokerage agreement diligently until 15 March when he received a letter of termination of brokerage services.
  • In its lawsuit documents filed in the Mombasa High Court, Bicorn Exim Ltd said it received the termination letter from the managing director of sales and marketing of KTDA Management Services Ltd.
  • The tea brokerage company claims that according to the agreement, KTDA Management Services Ltd should have stated the reason for its termination.

A tea brokerage company has challenged the termination of its contract by KTDA Management Services Ltd to offer its services to a tea factory.

Bicorn Exim Ltd argues that after being appointed tea sales broker for Githambo Tea Factory Ltd, he performed his obligations under the tea brokerage agreement diligently until 15 March when he received a letter of termination of brokerage services.

In its lawsuit documents filed in the Mombasa High Court, Bicorn Exim Ltd said it received the termination letter from the managing director of sales and marketing of KTDA Management Services Ltd.

The tea brokerage company claims that according to the agreement, KTDA Management Services Ltd should have stated the reason for its termination.

“The plaintiff states that the letter from KTDA Management Services Ltd did not state any reason for termination of the contract,” the tea brokerage company argues.

Bicorn Exim Ltd seeks a statement that KTDA Management Services Ltd breached the terms of the agreement dated June 24, 2021, by sending them a letter terminating brokerage services without notice.

He also wants a permanent injunction to be issued preventing the defendants from terminating the tea brokerage agreement until the dispute arising out of or related to the agreement between the parties has been submitted and finally resolved on the merits. through dispute resolution procedures set out in the agreement.

Bicorn Exim Ltd claims that the defendant’s notice of termination was issued contrary to the tea brokerage agreement which states that they must give him three months’ notice before termination.

The company says its manager wrote a letter to the defendants requesting a mediation or negotiation meeting on April 4, but they ignored the letter.

He also claims that on March 23, police officers attached to a multi-agency inspection team on agricultural reforms in the tea sub-sector came to his business premises without notice and took away various documents.

Bicorn Exim Ltd also maintains that under a provision of the Agreement, any dispute, controversy or claim arising out of the Agreement or the termination shall be resolved by mediation or good faith negotiation between the parties.

According to the company, it will be greatly prejudiced if the defendants are not prevented from recruiting another tea sales broker and entering into tea brokerage agreements with other companies pending the hearing and decision of the affair.

“No prejudice will be suffered by the defendants if they are prevented from recruiting another tea sales broker and entering into tea brokerage agreements with other companies pending the hearing and the decision of the prosecution”, the company said.

In his testimony, the managing director of the company, Mr. Francis Muteria, states that the termination of the agreement has greatly harmed the company which has invested a lot of resources in tea brokerage.

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Laura J. Boyer