Beer distributor ordered to pay Serengeti Breweries Sh513m

Friday January 22 2021
By Bernard James

Dar es Salaam. A Dar es Salaam company has been ordered to pay Serengeri Breweries Limited Sh513 million for breach of an agreement for distribution and supply of beers and spirits.
In a default judgment issued recently, the Commercial Division of the High Court said FES Enterprises Company Limited breached the agreement by failing to pay for products supplied by the local beer brewer.
Default judgments arise in circumstances whereby one party to a suit has failed to perform a court-ordered action, resulting in the court settling the legal dispute in favour of the party who has complied with its orders.
The beer manufacturer took the distributor to court in 2019 to recover Sh511 million in outstanding purchase costs for beers, spirits and ‘empties’ it supplied to the firm.
The two had been enjoying a good business relationship. On February 1, 2014, Serengeti contracted FES for the distribution and credit supply of its beers and spirits within the Chang’ombe and Kiwalani localities in Dar es Salaam Region.
Documents show that, between December 2014 and 2016, the beer maker supplied the company with beers, empties and spirits worth Sh511.4 million.
Serengeti Breweries had accused FES of failing to timely pay the outstanding balance despite frequent reminders.
Why default judgment?
Judge Stephen Magoiga said the court granted the default judgment because FES failed to file a written statement of defence according to procedures and the time limit prescribed by law.
The court had on July 10, 2019 ordered Serengeti to serve FES with a summons to file a written statement of defence. Two months later, Serengeti informed the court that efforts to serve the summons had proved futile as the company avoided the service.
The court then ordered that the summons be published in the Daily News and Mwananchi newspapers.
The publication prompted lawyer for FES on September 26, 2019 to file an application for extension of time to file written statement of defence. That, however, came 28 day after publication of the summons.
However, the court dismissed the application on July 24, 2020 and ordered lawyer for Serengeti Breweries to pursue her case in accordance with Rule 22 (1) of the High Court (Commercial Division Procedure Rules.
The rule allows the court to enter judgment in favour of the plaintiff if a party required to file written statement of defence fails to do so within the specified period.
The court issued its decision in favour of Serengeti after being satisfied that the company has complied with the court by filing affidavit in proof of its claim together with application for default judgment.
The court also rejected request by FES for the court to halt proceedings for want of jurisdiction for the have filed another application at the same court touching on the issue.
“There is no dispute in this suit that the plaintiff has proved that the defendant was dully served but failed to file written statement of defence. The defend at not only failed to file written statement of defenec but equally failed to make an application for extension of time in time within which to tile defence,” said Judge Magoiga.