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How Harry Akande’s $10m Judgement Against Shoprite Forced Its Planned Exit From Nigeria

It has been revealed that an appeal court judgement against Shoprite over breach of agreement is responsible for its planned divesting and exit from Nigeria.

Aside the surface excuse of low Return on Investments (ROI) as its major reason for wanting to exit Nigeria, one major (hidden) reason the South African conglomerate maybe divesting from its biggest African market (Nigeria) might be as a result of a recent Appeal Court ruling which affirmed the judgment of a Lagos High Court that awarded $10 million damages against Shoprite Checkers (PTY) Limited in a suit filed by AIC Limited that the retail giant breached an agreement to set up its Nigerian arm.

In an unanimous judgment delivered on May 21, the court’s three-man panel affirmed the award against Shoprite Group, thus upholding the decision of the lower court that Shoprite Group breached contract in its dealing with AIC.

Before the appeal was instituted, the trial court presided over by Justice Lateef Lawal-Akapo had awarded $10 million damages against the South African retail giant and its Nigerian subsidiary for a breach of contract

Apart from the $10million award, the court had directed the South African retail giant to pay 10 percent per annum on the damages with effect from the date of judgment until final liquidation of the entire sum.

Dissatisfied with the judgment of the trial court, Shoprite and its Nigerian subsidiary jointly filed a notice of appeal with several grounds, asking the appellate court to quash the decision of the lower court.

On its part, AIC filed a cross appeal, demanding 50 percent of $92.3million as loss of profit it suffered due to the incorporation of Retail Supermarkets Limited, which it contended amounted to the breach of the agreement for the period of 2005 to 2009.

In its decision, the three-man panel, comprising Justice Joseph Ikyegh, Justice Tijjani Abubakar and Justice Ugochukwu Ogakwu, threw out the appeal of Shoprite Group having established it breached agreement it entered with AIC to jointly set up the Nigerian subsidiary.

Ikyegh, who delivered the lead judgment, ruled: “I agree with the appellants that since the court below did not find Retail Supermarket liable, the award of damages and costs against it cannot stand. The court below was therefore wrong to have awarded damages against Retail Supermarket.”

The judge declared that he would “allow the appeal in part on this issue and set aside the award of damages and costs against Retail Supermarket; while the appeal of Shoprite Checkers is dismissed for lacking in merit and the decision of the court below as it affects Shoprite is hereby affirmed.

“The trial court held in its judgment that there was a subsisting contract by conduct between the respondent and Shoprite with respect to the joint venture, which the latter had breached upon which it awarded $10 million damages and post-judgment interest thereon in favour of the respondent against the appellants,” he declared.

We are expanding and going fully Nigerian – Retail Supermarkets Nigeria Limited

Meanwhile, Retail Supermarkets Nigeria Limited has formally informed its staff members of its expansion plans and also making the company fully indigenous. This was revealed in an internal memo signed and released to all staff members by the General Manager, Carl Erickson on Friday, July 31, 2020.

-thenewsguru

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