Court stops transfer of Renault franchise

Three employees of motor vehicle dealer Simba Caetano Formula have obtained a court order stopping any business plans that would render them jobless after the firm’s Renault car franchise was terminated in June.

Simba Caetano is a joint venture between Simba Corporation and Caetano Formula East Africa, with the latter pulling out of the agreement and seeking to launch sales of Renault cars independently.

The court order means that Caetano Formula is stopped from proceeding with the business separation plan until the legal dispute is determined.

Justice Hellen Wasilwa of Employment and Labour Relations Court issued the order on Friday last week, barring both Simba Caetano and Caetano Formula from implementing or taking any action which would see the employees lose their jobs.

The employees who have sued are O’Brian Bolei Kipsowe, Lawrence Karanja and Sheikh Yaqub.

“That an order of injunction restraining the first and second respondents from implementing and/or taking any action which would operate to terminate the appellants’ employment whether by closing down the business and operations of the first respondent or transferring the business and/or operations of the first respondent to any other person of howsoever otherwise is allowed pending the hearing of this application interpartes,” the judge ordered. The parties are expected in court on December 20, 2019.

The decision came after the Court of Appeal dismissed a separate application by Simba Corporation seeking to get a temporary order to nullify the termination of the dealership agreement.

The company wanted the Appellate Court to stop Caetano Formula East Africa from entering into a dealership agreement with other parties.

A bench of three judges, however, dismissed the case saying they could not make a definitive finding at this stage as to whether the agreement was properly or lawfully terminated or the parties remained in business even after the expiry of the contract.