The court battle pitting auto dealer CMC Holdings against its business partner Jaguar Land Rover has been pushed to January 15, 2013.Photo/File
The court battle pitting auto dealer CMC Holdings against its business partner Jaguar Land Rover has been pushed to January 15, 2013.
The court gave JLR a deadline of December 28 to file its response to CMC’s accusations that it had unlawfully withdrawn its franchise of Jaguar, Range Rover and Land Rover cars and handed them over to RMA Group, a rival dealer.
(Read: CMC loses key Land Rover brand to new Kenyan rival) CMC was also ordered to file a replying affidavit in the dispute that was sparked by JLR’s public announcement on December 6 that it will not renew CMC’s contract that it said ends in February 2013.
CMC reacted to the announcement by going to court where it obtained an injunction against JLR’s plans on Monday last week.
While the dispute is shaping up to be a major court battle, CMC said in its application for the injunction that it prefers an arbitration to settle the dispute.
Loss of JLR brands, which account for 30 per cent of CMC’s annual unit sales, would be a big blow to the country’s fifth largest auto dealer.
The auto dealer argues that it has spent a lot of resources in hiring staff and improving its JLR dealership whose loss would result in job cuts, erosion of shareholder value and poor credit rating by financiers.
The company, whose suspended share last traded at Sh13.5, made a net loss of Sh181.1 million in the year ended September 2011 on reduced sales.
It returned to profitability in the first half of the current year ended March when its net profit rose to Sh383.5 million helped by a Sh450 million foreign exchange gain.
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