Uchumi Supermarkets’ fight for survival suffered a blow on Friday after a Nairobi court directed that the old Company’s Act could be used in an ongoing suit filed by its creditors.
The retailer lost the first round of a legal battle where it was seeking to have an insolvency case filed by suppliers heard and determined under the newly enacted legislation. The old Companies Act is hostile to struggling firms as it provides for express liquidation in case of default, while the newer laws allow such businesses to negotiate on repayment of outstanding debt. The retailer’s chief executive officer, Julius Kipng’etich, however, told The Standard he was optimistic that the ruling did not translate to too ‘much’. “What we know now is that the court ruled against us, allowing the application of the repealed Companies law,” said Mr Kipng’etich late on Friday. He added that Uchumi was waiting to see what the implication of the directive would be.