A Kenyan cigarette maker has been spared by paying a Tanzanian firm Ksh157 million (Tsh3.2 billion) for damages following a court ruling delivered on Wednesday, February 23.
Delivering the verdict, the Tanzanian Court of Appeal overturned a decision by the High Court that awarded the Tanzanian firm millions as damages for sudden termination of the cigarettes supply contract.
The court settled the case between the firms which had lasted for over eight years in Tanzanian corridors of justice.
“In our view, there was no evidence to prove the existence of a distributorship agreement between the parties, nor its breach,” the appellant court ruled.
The Dar es Salaam based company had moved to court arguing that it obtained an exclusive distribution contract with a Kenyan firm since 2000.
Their documents in court stated the Kenyan cigarette maker violated the terms of their 14 years contract in terminating the supply deal.
In 2016, the court ruled in favour of the Tanzanian firm awarding them Ksh157 million in damages for loss of goodwill and money invested in securing and running their business.
The Kenyan firm opposed the decision by moving to court submitting their petition why they chose to terminate the supply contract. It argued that the judge had erred in law among 12 other grounds of appeal.
However, in the latest ruling, the High Court overturned the ruling sparing the Tanzanian company from paying Ksh157 million in damages.
“Our construction of the oral and documentary evidence on this point leads us to the conclusion that by repeating the proposal for signing of a formal contract, it is clear that it was not the intention of the appellant to be governed by an implied term of contract," the ruling stated.
Kenya and Tanzania enjoy a mutual business relationship. Tanzania imports products like soap, foodstuffs among other products from Kenya. On the other hand, Kenya imports cereals, wood, and edible vegetables amongst other things from Tanzania.
President Samia Suluhu Hassan in her state visit to the country in May 2021 further strengthened bilataeral and trade corporation between the two East African nations.
