Logistics company seeks court order to freeze Bamburi cement sales in response to Sh3 billion compensation claim

Logistics company Roy Hauliers Limited has filed a case in the Nairobi High Court seeking to freeze the sale of shares by Bamburi Cement Limited to Amsons Group limited as it seeks Sh3 billion from the cement manufacturer for breach of contract.

The company wants the court to issue an injunction on the sale of Bamburi Cement to prevent circumvention of future arbitration awards.

The company also wants the court to Preserve Bamburi’s property The consolidation of the arbitration proceedings during the hearing and determination of this application does not invalidate the arbitration proceedings.

Roy Hauliers Limited told the court that the company learned through a media announcement that Bamburi Cement Limited intended to sell 100% of its company to a Tanzanian company called Amsons Group Limited, but the company has not yet settled the claim for compensation.

The purpose of the arbitration was to reach an agreement on the loss of profits of Roy Hauliers due to Bamburi Cement’s breach of contract, which Roy Hauliers and Bamburi Cement had signed on May 1, 2018 for clinker transportation services, and Bamburi Cement had breached the contract.

Roy Hauliers, represented by lawyer Shilunya Abutika, also sought to reach a settlement with Bamburi Cement Limited, which it believed had breached a quarrying services contract signed on February 1, 2017, resulting in loss of profits.

The suit filed by Shemiel Omar Yakubu, a director of Roy Hauliers Limited, at the Mirimani Commercial Court, stated that the contract was signed on May 1, 2018, under a variation deed dated September 15, 2020, for the company in charge of transportation to deliver the goods from Bamburi Cement Mombasa plant or Mariakani plant to Nairobi Grinding Station or any loading point and delivery location provided by the defendant.

“The main material to be transported is Clinker and auxiliary materials “The materials include return cement bags, limestone, gypsum, alternative fuels and alternative raw materials and we will provide, operate and maintain a dedicated fleet of vehicles provided that the same shall meet the requirements of the defendant company as per the provisions of the agreement,” Yakub said.

The director told the court that the contract they had signed clearly stipulated the obligations of the parties and that they were to transport 20,000 tonnes of limestone, 20,000 tonnes of gypsum, 100,000 tonnes of semi-finished clinker, 15,000 tonnes of bagged cement (return haul) and 3,000 tonnes of alternative fuels (waste charcoal, waste tyres, scale etc.) every year for Bamburi Cement.

The director told the court that the contract provided that if Roy Hauliers failed to deliver the allocated quantity for three consecutive months for reasons not attributable to Bamburi Cement, the cement manufacturer would be entitled to terminate the agreement by giving notice to the haulier.

Yakub told the court that Bamburi Cement would give Roy Hauliers the option to reject the shipment if the total volume of cargo increases by more than 15%, but if the transport company fails to mobilize additional trucks and other resources within 14 days, the cement manufacturer would allocate the excess volume to other carriers.

“The contract provided that if the total volume of goods to be transported decreased by more than 15 per cent, Bamburi Cement would give seven days’ prior written notice to the carrier, Roy Hauliers, so that trucks could be redeployed,” Yakubu told the court.

The director told the court that although the contract was non-exclusive and Bamburi had the right to seek alternative supply of services at any time, they would still face dire consequences if Roy Hauliers failed to deliver the materials as required.

Yakubu said that as the carrier in this transaction, their company also has an obligation to ensure that the goods are not damaged, contaminated, deteriorated or undeliverable as a direct result of the actions of the carrier or its employees.

He told the court that Bamburi Cement extended Roy Hauliers’ contract, assuming only that they were satisfied with their work, and that they also received a letter on September 16, 2020, informing them that an additional 38 units would be constructed, increasing the plaintiff’s units from 47 to 85.

“This meant that we had to buy more trucks to meet the growing demand for transportation services at Bamburi Cement and we were forced to obtain a loan from the bank in order to meet the needs of the company by adding more trucks to complete the expected deliveries,” Yakubu said.

He told the court that although Bamburi had increased the number of trucks available for transport and Roy Hauliers had also purchased these trucks through loans, Bamburi never existed The volume tonnage of clinker they need to transport.

Yakubu said that as a result, they suffered losses in terms of volume and items transported. However, the defendants did not offer any feasible solution or even a notice to reduce the transported materials.

He said they could not provide fewer trucks considering that if they fail to complete the allocated haulage volume, the contract would be terminated and besides that, they were not getting any reduction in the allocated haulage volume, so they could not know what they were busy doing.

“Instead, Roy Hauliers spent extra money to buy more trucks, maintain the track and make sure the track was in good condition to meet our own obligations in the contract,” Yakub said.

Roy Hauliers alleged that Bamburi Cement failed to comply with the contract signed between the parties, resulting in the loss of expected profits of Roy Hauliers in the amount of Sh2,426,240,184.