Sawand Care Products Ltd wants permanent restraining orders against Nestlé’s Kenyan subsidiary from instituting any liquidation.
According to the plaintiff, Nestlé Kenya by a letter dated November 16, 2018, demanded the money without disclosing how the figure had been arrived at.
In suit papers, Sawand claims that Nestlé initially issued a demand letter dated May 15 last year demanding payment of Sh25.2 million.
A consumer goods distribution company has sued Nestlé Kenya Ltd seeking an injunction restraining the food and drink multinational from moving to liquidate it over an alleged Sh17.4 million debt.
Mombasa-based Sawand Care Products Ltd wants permanent restraining orders against Nestlé’s Kenyan subsidiary from instituting any liquidation petition pursuant to a statutory notice it (Nestle) issued relating to any debt under a distributorship agreement.
According to the plaintiff, Nestlé Kenya by a letter dated November 16, 2018, demanded the money without disclosing how the figure had been arrived at.
In suit papers, Sawand claims that Nestlé initially issued a demand letter dated May 15 last year demanding payment of Sh25.2 million.
Sawand says it had entered into a distributorship agreement with Nestlé dated September 20, 2016, and ending on March 31 last year. The firm says the agreement appointed it as the sole distributor of Nestlé products in the coastal region.
“The plaintiff (Sawand) sometime in late 2017 noticed falsified entries and other irregularities in accounting for the products supplied and brought the information to the defendant’s attention,” the suit documents state.
The firm says the parties agreed to carry out proper reconciliation exercise that would resolve all discrepancies and that it would pay what is justly owed to Nestlé Kenya.
Sawand claims that serving a statutory notice to liquidate it while knowing that there was a bona fide and substantial dispute on the debt was in bad faith. The firm also claims that threatening to institute a liquidation petition while knowing that it was not insolvent is malicious.
“The plaintiff and its advocates have in good faith engaged the defendant and its advocate to have the outstanding issues resolved so that the plaintiff can pay what is justly due,” argues the distributor.
Sawand says a liquidation petition would lead to irreparable loss to its reputation as no reasonable businessman will want to engage with an insolvent company.
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