Kampala- Sadolin Uganda Limited has filed an injunction in court against Akzo Nobel Coatings International BV to stop them from terminating a deal it had with the latter Dutch company which owns the trademark.
According to a case filed by Muwema and Company Advocates and Solicitors on behalf of Sadolin Uganda Limited, the applicant is applying for an interim protection restraining Akzo Nobel Coatings International BV (the respondent), its agents, assigns or licensees from directly or indirectly selling any Sadolin products to the distribution network or customer base developed by the applicant.
This also applies to the use or intended use of the weather guard trademark in Uganda pending the hearing and the determination of the intended arbitration.
In a telephone interview on Monday, Mr Chris Nugent, the managing director Sadolin Paints Uganda Limited, confirmed filing an injunction and referred this newspaper to the case filed in court.
The termination of the contract means that Sadolin Uganda Limited would stop using the household name in manufacturing its paint.
According to Kenya’s Business Daily, Daily Monitor’s sister newspaper, the Dutch firm now intends to set up shop in Kenya, and has incorporated a Kenyan subsidiary to take over the manufacture and sale of Sadolin Paints in the region.
Under the deal, Sadolin Paints East Africa Limited was to manufacture and sell paint with the trade name in Uganda, Kenya, Rwanda, Tanzania, Zanzibar, Burundi, South Sudan, Ethiopia, Democratic Republic of Congo (excluding Kinshasa and Lubumbashi), Somalia and Djibouti.
Details of the termination have emerged in a suit Sadolin Paints East Africa Limited has filed against Akzo seeking to stop the Dutch firm from prematurely terminating the contract between the two companies. Parties familiar with the case say Akzo is yet to respond to the suit.
In Kenya, Sadolin Paints East Africa Limited also wants to stop Akzo from soliciting for business from the Kenyan firm’s client base. The company has enjoined ICI South Africa PTY, a South African subsidiary of Akzo, in the suit.
While speaking to Busines Daily recently, Mr Salim Alibhai, the Sadolin Paints chairman, said: “The respondents obviously intent on frustrating Sadolin Paints East Africa Limited has, notwithstanding the termination notice, proceeded to incorporate another company christened Akzo Nobel Kenya and is in the process of issuing it with a licence for the use of its trademarks to manufacture, distribute and sell similar products in East Africa just like Sadolin Paints East Africa Limited.”
The move comes in the wake of Japanese paint and coatings manufacturer Kansai Paint’s acquisition of Sadolin Paints East Africa’s operations for a fee said to be in the region of $125 million (Shs450 billion).
Sadolin Paints East Africa says it has opened arbitration proceedings with Akzo but wants the court to bar the Dutch firm from prematurely terminating the lucrative deal.