BY SAM ALFAN.
Coca Cola affiliated companies and two others beverage firms have lost a bid to reverse a decision condemning them to pay more than Sh91 million to a plastic recycling firm for wastes collected about a decade ago.
Justice Francis Tuiyott dismissed the appeal by six Coca Cola affiliated firms as well as Safepak ltd and the Highlands Mineral Water Company saying there were no inconsistencies as alleged.
“Ultimately I do not see the merit in the notice of motion dated October 16, 2016 and I do hereby dismiss it with cost,” ruled Judge Tuiyyot.
The Judge upheld the decision of the tribunal made in April 2016 directing the firms to pay GreenPlast International ltd the amount.
“This Court is unable to say that those inconsistencies, if any, demonstrate bias on the part of the Tribunal. The Tribunal gave its reasons for reaching the conclusions it did,” the Judge said.
In the deal signed in 2011, Coca Cola, along with two companies involved in the beverage industry–Safepak and the Highlands Mineral Water Co. — formed a new company called PET Recycling Co. PETCO to manage the PET plastics recycling project.
The recycling company was to pay millions of shillings to Greenplast International, a recycling plant in Kikuyu Town on the outskirts of Nairobi, to crush the collected plastics for export to China.
Before the incorporation of that special vehicle company to be called PETCO, Coca Cola and Greenplast International agreed to work together in collecting and recycling plastic waste.
In June 2011, just two months after the signing of the MOU, a dispute arose over the price payable to Greenplast for PET wastes collected as well as the actual quantity collected and exported by Greenplast International.
Greenplast took the position that it was a fixed sum of US$ 350 per metric tonne irrespective of the international market price of PET waste.
The matter was referred to a tribunal and after hearing the case, A.B. Shah and Tom Macharia directed Coca Cola to pay US $ 898,042 minus US $ 65,000, which had already been paid.
The tribunal also directed that the amount would attract interest of 14 per cent per annum from April 2012 until payment in full.
Coca Cola firms moved to the High Court arguing that the award was erroneous, had inconsistencies and the Tribunal dealt on issues that were not contained in the MOU.
The firms faulted the tribunal saying while it found that Greenplast was entitled to payment for PET Flakes collected, processed and exported, it proceeded to order payment for plastic scraps amounting to US $ 391,582.30, which was not contemplated in the agreement.
The firms also argued that they were condemned to pay VAT of Sh15.7 million, yet it was not part of the claim, thus shifting the tax burden to the firms.
But the Judge said since Greenplast made a claim on the basis of the contracted rates, an auxiliary relief would be for payment of VAT that would accompany the principal sum payable.
Judge said the claim for VAT would have to be in the contemplation of the parties and the award would not be commercially efficacious if the element of statutory Tax that was agreed would be added to the rates was excluded.
