By Wezzie Gausi:
The High Court has dismissed a K3.7 billion lawsuit filed by Mother Dairy and Energy (MDE) Farms Limited against Salima Sugar Company Limited, ruling that the case was duplicative of an existing commercial dispute.
The claim, filed under Commercial Cause Number 80 of 2024, alleged that MDE Farms deposited K3.7 billion into Aum Sugar and Allied Limited’s account as an equity contribution for 300 million shares.
However, MDE Farms claimed that despite making the payment, it was never recognised as a shareholder.
The funds were later transferred to Salima Sugar’s account, leading MDE Farms to argue that Salima Sugar unjustly benefited from the transaction.
“Salima Sugar denied the allegations, arguing that MDE Farms had previously waived its rights through an express agreement with Aum Sugar and that similar shareholder disputes were already being handled by the International Court of Arbitration under Case Reference 28522/CPB.
“Additionally, the company pointed out that aspects of the dispute were also being litigated in another case, Pacific Ltd v. MDE Farms Limited (Commercial Case No. 54 of 2024),” the letter reads.
During a hearing on February 11, 2025, MDE Farms sought to stay the proceedings to avoid conflicting rulings across multiple courts.
However, the court sided with Salima Sugar, saying that the case duplicated the third-party proceedings in Commercial Case No. 54 of 2024.
In its ruling, the court permanently stayed the proceedings and struck out MDE Farms’ claim. It also advised the company to amend its pleadings in the ongoing case if it wished to consolidate its claims.
In an interview, Salima Sugar’s lawyer, Chrispin Ndalama, said they believe that MDE Farms will follow the court’s decision on the matter.
“As a result of the decision, MDE Farms has been ordered to cover Salima Sugar’s legal costs. Salima Sugar’s legal representatives have indicated they will proceed with a taxation process to recover expenses incurred in defending the case,” Ndalama said.
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