Collapsed retailer Uchumi Supermarkets has suffered a blow after the High Court ordered it to vacate two premises including its former branch at Adam’s Arcade, which it has sublet to other tenants.
Justice Alfred Mabeya directed the company to vacate the Adam’s Arcade premises within one month and pave the way for the landlord to take over the building.
The judge also directed United Housing Estate Ltd to re-enter two different shops in a different branch after its owner Zahid Kanji complained that the former retail giant owed it Sh26.3 million and has defaulted, breaching a Company Voluntary Agreement (CVA).
Under the CVA, Uchumi’s supervisor is to come up with a plan to settle claims from creditors including suppliers.
The landlords complained that Uchumi’s continued occupation of the premises was greatly affecting their business and its right to property and its return on investment.
“As earlier established, the supervisor and or the company did not comply with the order of 1/7/2020 nor the provisions of the CVA,” the judge said.
“Therefore, in accordance with the aforesaid holding, I grant Kenya Bowling Centers Ltd leave to re-enter the leased premises within 30 days of this order.”
Kenya Bowling is the owner of the Adam’s Arcade property. The court established that another tenant, Townsville Ltd had already taken over its building and therefore, rejected its bid to attach Uchumi’s property to recover rent arrears.
In the Adams Arcade matter, the court heard that Uchumi has been using the premises without paying rent on the basis of the CVA. The owner said the rent arrears stood at Sh23.5 million, which was to be paid under the collective agreement and a further Sh11.7 million that was not subject to the CVA.
More than 21 suppliers and banks were owed Sh4.2 billion, which would be settled under the CVA.
At the same time, Justice Mabeya allowed Legacy Spares (T) Ltd, a company a Tanzania company claiming Sh12.7 million to join the case and also be paid through the CVA.
The Tanzanian stores were closed in 2015 as the company cited a lack of profits.
Legacy Spares argued that it has not been updated on the status of secured and unsecured creditors of Uchumi Supermarkets Ltd (TZ), a subsidiary of the Kenyan retailer.
