Mulungushi Textiles sues Zambia China firm

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MULUGUSHI Textiles Limited has sued the Zambia China Mulungushi Textiles Limited seeking the Lusaka High Court to grant it an injunction restraining the respondent from evicting it from the factory in Kabwe, Central Province.

Mulungushi Textiles which has sued together with Mohammed Enterprises Tanzania Limited submitted that Zambia China Mulungushi Textiles Limited should be restrained from evicting it until the determination of the matter.
In an affidavit sworn in by Cosmas Mtesigwa a Tanzanian and country manager for Mohammed Enterprises who has sued on behalf of the two companies on July 30, 2014, the companies entered into a lease agreement for letting of the Zambia China Mulungushi Textiles ‘s factory and the building at Plot 2419 and 2420 in Kabwe.
Mr Mtesigwa said the building was for purposes of operating, maintaining and management of the textile plant for a period of 12 years with an option to review it for a further 18 years at a fixed lease fee of K220,000 per month gross of tax for the first three years, but payable 12 months in advance.

 

This he said was as long as, for the first two years the lease fee payable shall duly be for six months in each year and thereafter the third year an amount of K400,000.
Mr Mtesigwa alleges that the lease agreement had provided for good faith negotiations and discussion before formal arbitration as the method of settlement of disputes, difference or questions arising from
anything concerned with the agreement.
He said that the applicants through their advocates on November 10, this year, gave notice to Zambia China Mulungushi Textiles for a declaration of a dispute and call for formal negotiations prior to arbitration as provided for in the lease agreement.
Mr Mtesigwa contends that the move was prompted by failure of the parties to agree on the effective date of the lease agreement for purposes of paying lease fees.
He said that the leased premises were never formally handed over to the two companies until November 2, 2015 when an agreement was reached.
The agreement was to the effect that the stores department while listed as leased, would remain under the control of Zambia-China, who would grant controlled access to the applicants by placing personnel to attend to access requisitions and record draw down of spares removed.

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