Nigerian firm, AIC Limited has been awarded $10 million as damages against South African retail giant, Shoprite Checkers (PTY), Limited and its business partner, Retail Supermarkets Nigeria Limited for a breach of contract.
In a judgment delivered by Justice Lateef Lawal-Akapo of a Lagos High Court, Igbosere.
Apart from the $10million award, the defendants are to pay N1million as well as an interest rate of 10 percent per annum effective from the date of judgment until final liquidation of the entire sum.
AIC, the claimant in the suit has sought for an order of court for payment of $2.23 million and another N13.6 million as special damages from the defendants.
The Claimant Argument
In a suit filed by its counsel Prof Taiwo Osipitan (SAN), has sought for a declaration that by virtue of its agreement with the first defendant, (Shoprite Checkers Limited), for a joint venture to be formed by the claimant and the defendants, it is entitled to exclusively operate and manage the first defendant‘s Shoprite brand in Nigeria and elsewhere in the coast of West Africa except Ghana.
The claimant argued that the agreement was breached when the first defendant sidelined it and incorporated the second defendant to handle its affairs.
According to the claimant, Bonnita (now Parmalat) Pty of South Africa introduced the first defendant to it in the ordinary course of its business and the chairman; Chief Harry Akande established a business contact with the first defendant.
The claimant argued that it initiated discussions with the first defendant on its idea of developing and establishing Shoprite chain of stores/retail supermarkets in Nigeria and the coast of West Africa except Ghana, where Shoprite Checkers PTY Limited has already established its retail supermarket brand.
The claimant submitted that it introduced the Nigerian market potentials to the first defendant and provided first hand knowledge of the country’s potential for megastores/ retail supermarkets and business climate for operation of same by providing the first defendant with demographic statistics and income bracket in major cities in Nigeria.
The terms of the agreement, the claimant stated were as follows.
- The claimant and the defendant will come into the joint venture individually.
- A new company to be formed by the first defendant who will enter into a joint venture with the claimant or with any other company formed or nominated by the claimant.
- The joint venture will be owned by the parties in equal proportion.
- The joint venture will exclusively operate the first defendant Shoprite Brand in Nigeria and elsewhere in the West Coast of Africa except Ghana.
The Defendant’s Position
The defendant through their counsel, Funke Adekoya SAN, contended that there was no joint venture agreement between the claimant and the first defendant.
The defendant contended that the claimant has failed to discharge the burden of proof, but attempting to support its week case and argument by piecing disjointed material together.
The defence also submitted that the establishment of Shoprite in 2005 was not as a result of the feasibility study of the claimant but as a result of a different report in December 2004.
The defence team, who called five witnesses, urged the court to dismiss the claims for the claimant’s failure to adduce concrete evidence of non-execution of a joint venture agreement.
In resolving issues set before him, the trial judge in a 57 paged judgment, held that there were business discussions between parties leading to meetings held both in South Africa on April 16, 1998.
The court further looked at extracts from the meetings in South Africa and Lagos before reaching a conclusion that the two meetings took place in 1998 prior to the establishment of Shoprite out let in Nigeria in 2005.
Shoprite is the largest supermarket retailer on the African continent. With a staff strength of almost 144,000 people. It serves local communities with the lowest price promise. Shoprite currently has retail outlets in more than 12 states spread across Nigeria.