The planned exit from the Nigerian retail market by Shoprite, the South African retail giant has hit obstruction as a federal high court in Lagos has issued a restraining order against its plans to transfer shares and divest assets prior to exiting.
The order was necessitated by the need to stop the company from escaping a US$10 million liability from a court judgment debt the company is yet to offset.
The order was handed down by Justice Mohammed Liman in decision of a suit brought by the AIC Limited, which obtained a $10 million judgment against Shoprite in 2018 in a breach of contract.
The said judgment debt is from a decision of the Ikeja High Court that awarded $10 million in favour of the AIC by Justice Lateef Lawal-Akapo of the Lagos State High Court in Ikeja.
An appeal by Shoprite against the judgment is still pending before the Supreme Corut after Shoprite lost at the Court of Appeal also.
The restraining order by Justice Liman holds that the “debtor/1st respondent (Shoprite), and its privies are stopped ‘from transferring, assigning, charging, disposing of its trademark, franchise and intellectual property in a manner that will alter, dissipate or remove these non-cash assets and other assets, including but not limited to trade receivables, trade payables, payment for purchase of merchandise, from within the jurisdiction of this honourable court.’
The judge equally ordered Retail Supermarket Nigeria, the 2nd respondent, ‘to disclose its audited financial statements for the years ending 2018 and 2019 to enable the judgment creditor/applicant determine the judgment debtor’s/respondent’s funds in its custody in order to preserve same in satisfaction of the judgment of the Court of Appeal in Appeal No: CA/L/288/2018.’
The applicant company, AIC had told the court that it invited the South African retail supermarket operators to Nigeria and brought them in awareness of business opportunities in the country with the intention that they would go into a joint venture.
But after talks had reached an advanced stage and it had incorporated AIC-Shoprite Nigeria Limited in the hope of a joint venture for establishment, Shoprite abandoned the agreement and went ahead to set up its outfit in 2005 without its consent.
Though Shoprite claimed it had no contract with the Nigerian firm, the high court and the Court of Appeal said the series of correspondences that were exchanged between both parties showed that AIC Limited and Shoprite agreed to a joint venture.