Indian firm claims Sh422m damages from SDV Transami

An Indian freighter firm has filed a Sh422 million ($4.3 million) claim on logistics firm Bollore Africa, formerly called SDV Transami, for damages it allegedly suffered from the delayed delivery of a 32.2 tonne consignment of sugar to Uganda in 2012.

Pankaj PVT wants the High Court to declare Bollore responsible for the late delivery of the consignment valued at $10 million (Sh970 million), arguing that the firm breached an agreement that was to see the sugar transported to Jinja, Uganda, within 12 days of January 12, 2012.

Pankaj was hired by another Indian firm-Rika Global Services-to deliver the sugar to four Ugandan firms following a biting sugar shortage.

It says the late delivery saw the Ugandan firms miss out on a tax waiver that lapsed on February 28, 2012 and they now claim $10 million (Sh980 million) for damages.

“As a result of the delay, Rika withheld payments due to Pankaj for the transportation services. Rika also informed Pankaj that it would be held responsible for all losses that arose from the delay. Despite our best efforts, Bollore has refused to acknowledge liability for its breach of contract,” Pankaj says.

Mode of transport

The Indian freighter firm says Bollore also switched the mode of transport from road to rail without its approval.

Bollore has in its defence said the transport mode switch was as a result of flash floods caused by heavy rains in Mombasa that stalled its bulk product delivery schedules.

Bollore holds that the rains delayed ship arrivals by up to 17 days, caused power outages and interfered with Kenya Revenue Authority’s clearance system.

The firm has also blamed Pankaj for piling on the crisis by delaying its consent for switching to rail transportation as recommended by the Kenya Ports Authority.

“In consideration of the difficulties, Bollore transported some of the goods by road and others by rail and shall urge this court to find that the resultant late delivery was beyond its control,” Bollore said.

Pankaj says that Kakira Sugar, VG R World, Felistar Uganda and World Point Group have demanded the Sh970 million from Rika, which has in turn demanded the same from the Indian freighter.

The incident, it adds, has soiled the good working relationship it enjoyed with Rika, which has led to lost business.

The Ugandan firms were forced to sell the sugar at a loss following the late arrival of the consignment, as supply had improved by then.

But Bollore insists that it is not party to the contracts Rika signed with Pankaj and the Ugandan firms hence cannot be held liable for difficulties that arose in the agreements.