Logistics firm seeks court orders to freeze sale of Bamburi Cement over Sh3bn compensation claim

Logistics firm Roy Hauliers Limited has moved to the High Court in Nairobi seeking freeze orders against the intended sale of Bamburi Cement Limited shares to Amsons Group limited over a Sh3 billion compensation claim it is seeking from the cement manufacturer over a breach of contract.

The Company wants the Court to issue an injunction on the sale of Bamburi Cement to prevent aversion of a future arbitral award.

The firm further wants the court to preserve the properties of Bamburi Cement and not to render the arbitral proceedings nugatory and pending the hearing and determination of this application.

Roy Hauliers Limited told the court that it had learnt that Bamburi Cement Limited intends to sell 100 per cent shares of its company to a firm based in Tanzania by the name Amsons Group Limited through a notice to the public published in the media yet it had not settled the compensation claim.

The Purpose of the arbitration is to reach a consensus on loss of profits made by Roy Hauliers due to what it terms as a breach of contract by Bamburi Cement after they entered into a contract for clinker transport services entered into on May 1, 2018, between the two companies.

Roy Hauliers which is represented by Advocate Shilunya Abutika in the matter is also seeking consensus with Bamburi Cement Limited following the loss of profit made due to what it terms as a breach of contract for quarry services entered into on February 1, 2017.

A suit filed at Milimani Commercial Law Court by Shemir Omar Yakub (Director Roy Hauliers Limited) stated that the contract was entered into on May 1, 2018, as per the deed of variation made on September 15, 2020, where the company that deals in transportation was to transport deliveries from the Bamburi Cement Mombasa plant or Mariakani plant to the Nairobi Grinding Station or to any of the loading points and delivery sites provided by the defendant.

"The main material to be transported was to be Clinker and the supplementary materials included Backhaul cement bags, Limestone, Gypsum, alternative Fuels and alternative Raw materials, we were to provide, operate and maintain a dedicated fleet of vehicles on the basis that they shall service the defendant company's requirements as envisaged in their agreement," said Yakub.

The Director told the Court the contract they entered was specific with regards to the obligations of each party in which they were to transport for Bamburi Cement 20,000 Tons of Limestone per annum, 20,000 Tons of Gypsum per annum, 100,000 tons of semi-finished Clinker per annum, 15,000 tons per annum of bagged cement(backhaul) and 3,000 tons per annum Alternative Fuels (used charcoal, used tyres, mill scale, etc.)

The Director told the Court that the contract stated that if Roy Hauliers failed to deliver the allocated volumes for three consecutive months due to factors not arising from Bamburi Cement, the cement manufacturer shall be entitled to terminate the agreement with notification to the transporting company.

Yakub told the court that in the event that the total volume of the goods increases by more than 15 per cent, Bamburi Cement was to give Roy Hauliers the option of refusal but in the event that the transporting company is unable to mobilize additional trucks and other resources within 14 days, the cement manufacturer will distribute the extra volume to any other carrier.

"The contract states in the event that the total volume of goods to be moved reduces by more than 15 per cent, the Bamburi Cement will give seven days' notice in writing of the reduction of volume to the carrier to Roy Hauliers to allow demobilizing of trucks," Yakub told the court.

The Director told the court that even though the contract was said to be non-exclusive in nature and Bamburi shall have the right at all times to seek alternative supplies of the services, Roy Hauliers in this matter would still face dire consequences if they did not deliver the materials as required.

Yakub said their company being a carrier in this transaction further had the duty to ensure that there is no damage, contamination, deterioration or non-delivery of goods, which is caused by a direct consequence of the carrier's conduct or his employees.

He told the court that Bamburi Cement extended the contract for Roy Hauliers which can only be assumed that they were satisfied with their work, they further got a letter on September 16, 2020, informing them that they will be increasing the plaintiff's units from 47 to 85 by making an additional 38 units.

"This therefore meant that we had to purchase more trucks to accommodate the increase in demand of transportation services by Bamburi Cement, we were forced to take up a loan facility from a bank, to enable us to meet the demands of the company by adding more trucks for the delivery work expected of us," said Yakub.

He told the court that despite an addition in truck numbers to be at Bamburi's disposal with regards to delivery and although Roy Hauliers took a loan to be able to acquire the said trucks, Bamburi never made available the required volume tonnage of clinker that they were required to transport.

Yakub said that as a result, they were incurring losses in terms of the volume of work it was intended to transport and what they were transporting. Yet, the defendant was not giving any viable solution or even giving notice on reducing transporting material.

He said that considering the terms of termination of the contract if they cannot meet the required duty of transportation of the volumes allocated, they were not in a position to provide less trucks for the same, besides that, they were not given the reduction of volumes allocated to know what numbers they were working with their hands tied.

"Instead Roy Hauliers incurred extra costs of purchasing more trucks, servicing the tracks and ensuring that the same are in good condition, meeting our own part of obligations in the contract," said Yakub.

Roy Hauliers is accusing Bamburi Cement for failing to adhere to the contracts they entered into between the two of them having Roy Hauliers incur losses of anticipated profits to the tune of Sh2,426,240,184.