Firm seeks Sh3b from Bamburi Cement over breach of contract

The High Court in Nairobi has referred for arbitration a dispute between Roy Hauliers Limited which wants a compensation of Sh3 billion from Bamburi Cement Limited over what it terms as breach of contract.

The purpose of the arbitration is to reach a consensus on loss of profits made by Roy Hauliers after in entered into a contract with Bamburi Cement for clinker transport services signed on May 1, 2018.

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Roy Hauliers, which is represented by lawyer Shilunya Abutika, is also seeking consensus with Bamburi Cement Limited following the loss of profit 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 court by Roy Hauliers Limited Director Shemir Omar Yakub stated that the contract was entered into on May 1, 2018, as per the deed of variation made on September 15, 2020.

Roy Hauliers was to transport deliveries from the Bamburi Cement in Mombasa plant or Mariakani plant to the Nairobi Grinding Station or to any of the loading points and delivery sites provided by Bamburi.

"The main material to be transported was to be clinker and the supplementary materials included backhaul (bagged cement), 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 Roy Hauliers boss told the court the contract they entered was specific with regards to 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 backhaul and 3,000 tons per annum alternative fuels comprising used charcoal, used tires and mill scale.

According to Yakub, 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.

He told court that in the event that the total volume of the goods increased 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 mobilise 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, Bamburi Cement will give seven days’ notice in writing of reduction of volume to the carrier to allow demobilising of trucks,” Yakub said.

He 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 had the duty to ensure that there was 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 extended the contract for Roy Hauliers which can only be assumed that they were satisfied with their work. Roy Hauliers is accusing Bamburi for failing to adhere to the contracts leading to incur losses of anticipated profits of Sh2,426,240,184.