Sabir Argaw, a prominent businessman, and his Singaporean partners, Wilmar Europe Holdings, Wilmar Edible Oils and Wilmar Resources have set out for another battle at the Supreme Court over the company buyout dispute involving 370 million Br.
The two parties disagreed over share buyout in Repi Detergents S.C. and Repi-Wilmar Industries S.C that were formed in a joint venture agreement in 2014 with 50pc shares each.
The Federal Supreme Court Appellate Bench accepted Wilmar's appeal on November 2, 2017, and summoned Sabir, a major shareholder and managing director of Alsam Group Plc, to appear in court on November 30, 2017, with his statement of defence.
The appellants claimed that the lower court's ruling displeased them as it had factual and legal errors, inaccuracy in its assessments of the facts, and faulty application of the law.
In their statement, the appellants raised three significant points of discontent with the lower court's decision; its jurisdiction to review the case, it's ruling over a cause of action and its acceptance over the effectiveness of the buyout agreement made via email.
Closed at the High Court on July 20, 2017, in favour of Sabir, the trial commenced on February 17, 2017. Sabir filed a suit claiming an enforcement of a disputed buyout of the two companies he formed with the Singaporean firms with whom he has had a long-lasting relationship in the import and distribution of palm oil. The partnership of the two parties was to set up 14 factories with an estimated investment of seven billion Birr.
The merger aimed to set up a manufacturing complex in Dima and Sebeta towns consolidating an edible oil refinery and packing plant, a production plant of soft, oils, soaps and detergents, and a sesame processing plant. During the setup, Sabir assigned both of his sons as managing and marketing directors, while Wilmar contributed board chairperson and general manager. But the partnership could not proceed, and they decided to dissolve the venture.
Ernst & Young (EY) assessed and determined the value of these companies to be between two and 2.17 billion Br. But believing that the companies were overvalued, Wilmar estimated the total cost of the businesses to be 740 million Br. It also offered Sabir to buy the company out, to sell his shares to them, or to agree on selling his shares to a third party, via email.
Accepting the first offer, Sabir and the three companies were proceeding over the execution of the deal until Wilmar International forwarded a new precondition with 10 points. But Sabir did not agree with the new proposal and finally took the case to court, requesting for the enforcement of the buyout.
Wilmar, established in 1991 and operating in 50 countries employing 90,000 people at its 450 plants engaged in oil palm production, sugar milling, oilseed crushing, edible oils refining, and fertiliser production, in its defence, challenged the suit petitioning that the Court has no jurisdiction to preside over the case, instead it has to be seen by International Chamber of Commerce Arbitration Tribunal.
It also argued there is an absence of "cause of action" to establish a case stating offer and acceptance that was made via email and it cannot establish as a cause of action rather a simple communication.
Sabir, who is a sole agent of Kiwi, Bic, Energizer, Colgate, Palmolive, various stationery brands, and B29 Soap, won a major milestone in May. The Court ruled in his favour establishing its jurisdictions to review the case, rejecting the preliminary objections of the defendant and ruling that the case indeed had a cause and effect.
The Presiding Judge over the case stated that the two did not have a prior agreement in taking the case to arbitration court whenever a dispute arises. Therefore, the Court can resume the jurisdiction.
And later when the case was closed in July, the Court established that the e-mail conversation of the two parties could be considered as a legal contract for the sale of shares and that Wilmar has to transfer the shares to Sabir. Following this, Sabir, the judgment creditor, started the process of executing the judgment.
Until the case is settled at the Supreme Court, the execution will stay under injunction. The respondent is summoned to appear in court on November 30, 2017, with his statement of defence.