Companies

Eveready loses court battle for Energizer distribution contract

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The Eveready East Africa factory in Nakuru on October 06, 2016. FILE PHOTO | NMG

Troubled battery firm Eveready East Africa has suffered a blow in its attempt to secure an exclusive contract for distribution of Energizer batteries in East and Central Africa.

High Court Judge Joseph Onguto has ruled that Eveready delayed in moving to court to stop Energizer Middle East and Africa Ltd from terminating its contract, which has since been awarded to another firm.

The judge said that Eveready entered into an agreement with Energizer Middle East and Africa in 2011 for the distribution of Energizer products, and had in effect submitted to fate which could be terminated at either party’s prompting.

It was the court’s position that the moment such a right was to be interfered with, Eveready ought to have moved to secure the same.

“Signs of alleged interference may be tracked back to January 2016 when the termination notice was issued. However, Eveready did not move to court until 12 months later. The delay appears inordinate and inexplicable,” ruled Justice Onguto.

The judge said such a delay robs the court of its discretion to grant the request sought by Eveready.

The dispute concerns mainly the distributorship of Energizer Holdings Inc’s branded products, with Eveready insisting that its life is pegged mainly on the said distributorship.

The court heard that in 2011, Eveready closed its manufacturing plant and switched solely to the distribution of Energizer products as its main corporate asset.

Particularly, in October 2011, Eveready was engaged by Energizer Middle East and Africa to promote, sell and distribute energizer products for a period of three years.

All was well until January 2016, when Energizer Middle East and Africa notified Eveready that the existing distributorship agreement would not be renewed. Instead, a new agreement for the marketing and distributorship of the energizer products was subsequently offered by Energizer Middle East and Africa.

Though Eveready challenged the new agreement saying it had unfair and unacceptable terms, Energizer Middle East and Africa said that the new agreement had been informed by the previous experiences which had seen Eveready default in settling invoices issued to it for goods supplied.
The firm also claimed that Eveready had performed below expectations.

“No assurance had been given to Eveready that the distributorship agreement would be perpetually renewed,” argued Energizer Middle East and Africa.

Energizer Middle East and Africa also said that Eveready’s request for temporary orders had come too late in the day because it had already engaged another entity, Hasbah Kenya Ltd, to market, promote, distribute, and sell energizer products.

The new entity had already largely performed its part of the bargain.