QUALITY Motors Limited has filed a commercial dispute against two international foreign companies, Honda Motors Japan and Honda South Africa (PTY) Limited, demanding among others, damages of 35 million US dollars (over 70bn/-), following the termination of dealership agreement.
Already the High Court's Commercial Division, under Judge Patricia Fikirini, has granted an exparte order for "maintenance of status quo" against the two international companies, who are defendants in the suit, their agents, servants, assignees, employees, contributories, assistants and or any other person.
Such order is with the effect of restraining them from interfering Quality Motors Limited, the plaintiff, of her sole dealership promotion of Honda Motor Vehicles, parts and accessories in the United Republic of Tanzania, in any manner whatsoever, pending determination of the matter inter-parte.
The court also restrained the respondents jointly and severally from selling, providing services of spare parts and accessories of Honda Motor Vehicles to any person or company in the United Republic of Tanzania pending hearing and determination of application for injunctive orders on June 18, 2019.
Through his advocates Abbriaty Kivea and Yassin Maka from stallion Attorneys, the plaintiff is further seeking for declaration that the defendants’ action of ceasing the dealership with Honda has deliberately and fraudulently adversely exposed him to financial loss.
The plaintiff also claims for declaration that Honda South Africa (PTY) Limited’s action of ceasing the dealership without proper cause amounted to breach of contract and that the notice published in the media and circulated in the country has tarnished his image and ruined his business reputation.
It is stated in the plaint that the relationship between Honda Motors Japan and Quality Motors Limited, which is owned by prominent businessman Yusuf Manji, commenced in 1999 where the plaintiff started representing Honda brands in Tanzania through an agent, Itochu Corporation, Japan.
According to the plaint, it was Honda Motors Japan views at the time that Africa in general and Tanzania specifically, was a negligible market and did not want its direct interaction or investment.
From such time, the plaintiff solely shouldered the entire responsibility of promoting Honda brands in the Tanzania market.
In 2005, Honda Motors Japan realized the potential of the Africa market and decided to dispense with their agents Itochu Corporation, Japan and entered directly into a distributorship agreement with the plaintiff, which came into effect in February 2006, thus provided for automatic renewal of the same.
The agreement, it is stated, was to be terminated by written notice by the parties. Despite the change, there was no tangible support given by the foreign company to the plaintiff such as warranty, training of workshop staff, marketing paraphernalia.
All over those years, the plaintiff was allegedly singlehandedly managing the Tanzania market and finally positioned Honda as a reputable brand in the country.
The increasing potential of Africa and extension of Honda products made Honda Motors Japan to form the Honda South Africa (PTY) Limited.
It is stated further that Honda Motors Japan communicated to all distributors in Africa, including the plaintiff that Honda South Africa (PTY) Limited was going forward to be the distributor with deceitful promise that such corporate restructuring was to assist entities such as the plaintiff.
The plaint states that the aim was to support Honda customers better, but would not infringe any traditional territorial market rights and in the case of the plaintiff, it would continue being the single sales entity for all Honda brand products for Tanzania.
Over so many years, there has been no support from the defendant for any advertising and sales promotions.
The plaintiff has been promoting Honda brands through cross promotions in collaboration with reputable brands such as Coca Cola, NMB and others and has been offering Honda Motorcycles.
Despite all initiatives done, the development and business innovation done, the Quality Motors Limited latter learnt from a public notice published on February 26 to March 2019, circulating in Tanzania that he has ceased to be the authorized dealer of Honda in the country and that a new dealer shall be appointed.
In the public notice, Honda South Africa (PTY) Limited announced that Quality Motors Limited, a subsidiary company with Quality Group Limited, ceased to be its authorized dealer in Tanzania effective January 31, 2019.
The foreign company warned that any person dealing with the local company in respect with Honda products does so at his or her own risk and that any sale or repair of the products done by the Tanzanian company after January 31, 2019 shall not be authorized or supported by Honda South Africa (PTY).