Court erases Haco’s Sh15m refund to Doshi in Bic pens row

The court dismissed Mr Doshi’s claims, citing insufficient evidence, and therefore saw no reason to award him damages.

The court found that the agreement for non-prosecution covered the products seized in 1996, which were 633,600 ballpoint pens, but not the 2002 products: 62,285 blue ballpoint pens found in possession of Mr Doshi and two of his directors.

“This is where the story of Doshi begins to crumble. The number of the 1996 products was 633,600, and on August 23, 2002, Doshi would be in possession of 62,285 more pens. Surely at the very least, those extra pens could not be the 1996 products,” said the judges. 

In the face of this unexplained discrepancy, they ruled that Doshi’s claim that the pens he offered for sale in 2002 were the 1996 goods returned by customers was not plausible. This is because there was no documentary or other proof of their return.

The dispute originated from a case filed by Haco, owned by the late businessman Chris Kirubi, and its French partner Société Bic, against Doshi Iron Mongers Limited at the High Court in 2006.

Société Bic, a limited liability company incorporated in France, owns the Bic trademark, while Haco, a Kenyan manufacturer, is the duly registered user of the trademark in the Comesa region under licence from Société Bic.

Haco and Société alleged that Doshi attempted to pass off ‘Bic’ ballpoint pens as their products.

Mr Doshi’s company was allegedly found in possession of counterfeit Bic ballpoint pens in 1996, which were purported to imitate products protected by the “Bic” trademark.

As a result, Doshi and its directors were arrested and charged in a criminal case but were ultimately acquitted.

Compensation and a refund

Evidence presented in court indicated that on February 20, 2002, the two parties entered into a settlement agreement under which Haco and Société Bic agreed to fully discharge Doshi from any liability relating to the counterfeit products. The agreement also allowed Doshi to retain possession of the goods that were the subject of the criminal case.

Doshi paid Haco and Société Bic Sh15 million as compensation, with the understanding that they would not file any further complaints concerning the products.

However, court documents show that additional pens were seized in August 2002, five months after the settlement agreement was signed.

Doshi alleged that Haco Industries and Société Bic had breached the settlement agreement by proceeding with criminal charges despite the earlier discharge.

In a ruling dated March 9, 2022, the High Court found Haco and Société Bic liable for breach of contract and ordered them to pay Doshi Sh15 million, representing the compensation paid under the breached agreement, plus Sh690,800 in legal fees.

Justice Patrick Otieno also awarded Doshi interest at court rates (12 percent) on the liquidated sums from the date of the suit in 2006 until full payment.

However, while ruling on an appeal filed by Haco and Société Bic, the Court of Appeal found that the products covered under the settlement agreement were different.

It noted that the agreement defined “counterfeit Bic products” and “offending products” separately from the 1996 items, which the court regarded as genuine Bic ballpoint pens.

In the appeal, Haco and Société Bic argued that the trial court had misunderstood the intent and scope of the February 20, 2002 settlement agreement and erred in ordering a refund of the compensation.

They contended that the court had wrongly equated the 1996 products with those discovered in Doshi’s possession in August 2002.

“The trial court erred by introducing new terms into the agreement, thereby allowing the respondents to infringe our trademark, and by awarding unproven special damages,” their advocates argued.

For his part, Doshi supported the trial court’s findings, maintaining that the goods at the centre of the criminal case were the same.

He downplayed discrepancies in the number of pens, noting that a clause in the agreement defined the 1996 products by reference to the criminal case of that year, regardless of numerical variations.

Nevertheless, the Court of Appeal dismissed his arguments and allowed the appeal.

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