Court Awards $10m Against Shoprite for Breach of Contracts

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  • Court Awards $10m Against Shoprite for Breach of Contracts

An Ikorodu High Court has awarded a $10 million as damages against the owners of Shoprite Stores in Nigeria, Shoprite Checkers (PTY) Limited and Retail Supermarkets Nigeria Limited for breach of contract entered with A.I.C. Limited some years back.

Justice Lateef Lawal-Akapo also awarded a cost of N1million in favour of the claimant and ordered that the award of $10million damages must include “interest at the rate of 10 per cent per annum effective from the date of judgment, until final liquidation of the entire sum.”

In a judgment delivered by the court, Justice Lawal-Akapo held that contrary to the views of the defendants, (Shoprite Checkers and Retail Supermarkets), “there exist a contract between the claimant and the 1st Defendant (Shoprite) which contract is still subsisting till date”.

In a certified true copy of the judgment by Justice Lawal-Akapo obtained by our correspondent yesterday, the court also established that the defendants was in a breach when it “incorporated a company, established the outlet (Shoprite) in 2005 and was running the same without recourse to the claimant”.

The claimant in the suit, filed through its lawyer, Prof. Taiwo Osipitan (SAN), in 2012, urged the court to among other prayers declare that, “by virtue of the agreement between the claimant and first defendant, the joint venture to be formed by the two parties is entitled to exclusively operate and manage by the first defendant’s Shoprite Brand in Nigeria and elsewhere in the coast of West Africa, except Ghana.

The claimant also sought “a declaration that the agreement for the formation of joint venture between the claimant and the first defendant for the exclusive operation and management of Shoprite brand in Nigeria and the coast of West Africa except Ghana is valid and subsisting.

“A declaration that the incorporation of the second defendant by the first defendant to operate its Shoprite brand in Nigeria is in breach of the agreement,” between both parties.

The claimant prayed the court among other things for payment of $2.2million and N13.6 million as special damages suffered by the claimant as well as an order for payment of $92.3 being loss of profit suffered by the claimant as a result of the breach.

In addition, the claimant urged the court to grant it a sum of $250 million “as aggravated damages for the continue breach of the agreement between the Claimant and 1st Defendant.”

Trial commenced on February 18, 2013, during which the claimant called two witnesses, PW1-Mukaila Raji and PW2-Chief Adeniyi Akande, the business development manager of the claimant company, and several documentary evidences were presented.

The defence team led by Funke Adekoya (SAN) opened its defence on May 5, 2014, and assembled five witnesses, namely-Andre Nico Vanzyl, Anton Andrew Wegenaar, Johannes Hendrik Schreuder, Roelof Louis Barry Slabbert and Malcoln Lawrence Aberman.

The claimant argued that evidence showed that “the essential ingredients for the formation of a contract namely :- offer, acceptance, consideration and intention to create legal relation” have been presented.

The defendants prayed the court to determine among other things whether the claimant has established the “existence of joint venture agreement or any other agreement between the claimant and the first defendant; and whether the claimant has established any claim against any of the defendants.”

The defendants submitted that – “there is no offer and acceptance which are fundamental requirements of a valid contract from evidence led by the claimant.”

In his judgement, Justice Lawal-Akapo held that the prayers of the claimant succeeded in part and awarded damages in its favour.

According to the court, it has been established that there can be acceptance by conduct not necessarily in writing as canvassed by counsel to the defendants.

“I therefore hold that there can be an acceptance by conduct and not necessarily in writing.”

On damages claimed by the claimant, the court held, “in essence to award exemplary damages alongside aggravated damages will tantamount to double compensation, which is against the spirit and intendment of the law.

“In this case, the claimant had incorporated a company A.I.C. -Shoprite Nigeria Limited in the hope of a Joint Venture for establishment and running of a Shoprite outlet. The Defendant went behind, incorporated a company, established the outlet in 2005 and was running the same without a recourse to the claimant. The claimant can adequately be compensated,” the court held.

About the Author

Samed Olukoya
Samed Olukoya is the CEO/Founder of investorsking.com, a digital business media, with over 10 years' experience as a foreign exchange research analyst and trader. A graduate of University of East London, U.K. and a vivid financial markets analyst.

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