Kenya: Nokia Sues Phone Trader in Sale Tussle

Mergers, Acquisitions and Financial Results

One of the world's top handset manufacturers is demanding Sh300 million from a Kenyan businessman. Finland-based Nokia Corporation wants Patrick Musimba to pay the money being an alleged outstanding sum, as per supply agreement. Musimba is the managing director of Musimba Investments, a local distributor of mobile telephone handsets and accessories.

Through an agreement with Nokia in 2005, Musimba Investments was appointed to buy and resell Nokia-branded mobile telephones and accessories. According to papers filed at the High Court, the handset manufacturer supplied the goods for sale in Kenya and by May 2008, the amount outstanding to Nokia on account of the goods was $3,755,686 (over Sh300 million).

The Finnish mobile phone maker also asked the court to grant it interest on the amount at 11 per cent per year from June 2008. However, Musimba denied that his company owed the handset manufacturer the money as he applied for the suspension of the proceedings.

He accused Nokia of failing to adhere to the provisions of the supply agreement, which allegedly provided for arbitration by the Central Chamber of Commerce in Finland. Mr Justice Leonard Njagi gave Musimba's company 14 days to file and serve his written submissions.