Thursday, July 18, 2024

Malawi High Court Empowers Local Merchants: Yamaha Access Granted via Stansfield Motors, Paramount Holdings Barred

For those seeking Yamaha products, access is restricted solely to Malawian-owned enterprises like Luthando Holdings, Actor Import and Export Investments Ltd, and Stansfield Motors Services Ltd. This is the case because Paramount Holdings Ltd, a foreign owned entity embroiled in a legal battle facing criminal charges for purportedly deceitful commercial practices, is off-limits for such transactions, according to the Malawi High Court Order issued by Justice Ken Manda of the Commercial Division.

The above state of affairs stems from yesterday’s clarification of an interim Order by Justice Manda in Commercial Cause No. 8 of 2024 which was to the extent that access to Yamaha Products is exclusively granted to Luthando Holdings Ltd, Actor Import and Export Investments Ltd, and Stansfield Motors Services Ltd and not Paramount Holdings Ltd. Paramount Holdings is accused of criminal offences of fraud and misrepresentation regarding its status as an authorized Yamaha dealer.

The background of the matter is that the High Court on January 11, 2024, issued an interlocutory injunction in a case involving Stansfield Motors Ltd as the Plaintiff and Yamaha Motor Company Ltd and Paramount Holdings Ltd as defendants, alongside Malawian-owned entities Luthando Holdings, Actor Import and Export Investments Ltd, and Stansfield Motors Services Ltd as interested parties. The interpretation of this order appeared elusive to the parties and upon relevant court application, the court convened yesterday, February 6, 2024, for clarification proceedings vis-à-vis the order that it had given in January.

The court’s clarification stipulated that Yamaha Motor Company is restrained from terminating its dealership with Stansfield Motors and from entering into a distributorship agreement with Paramount Holdings Limited.

The clarification therefore means that Malawian Merchants, including Luthando Holdings Ltd, Actor Import and Export Investments Ltd, and Stansfield Motors Services Ltd, recognized as official sub-dealers of Stansfield Motors, are permitted to source Yamaha products from other authorized dealers under Stansfield’s recommendation.

Effectively, Stansfield’s endorsement allows these Malawian merchants to procure Yamaha products from Tuning Fork (Pty) Limited, a South African dealer also known as Yamaha Distributor South Africa (YDCA). This development is favorable for the mentioned Malawian companies.

The court’s clarification, supplementing its initial interim order, instructs Tuning Fork (Pty) Limited to uphold its business relationship with Malawian merchants. This directive underscores the invalidity and inapplicability of any purported agreement between Yamaha in Japan and Paramount Holdings in Malawi, as per the initial interim order.

“An order is hereby made, clarifying the order of the interim injunction granted herein as follows: that when the said order stated that the 1st Defendant is restrained, whether by itself or by its servants or agents, or otherwise howsoever, this includes agents like Tuning Fork (Pty) Limited and whoever other intermediaries there may be through whom the Claimant acquires the 1st Defendant’s products for distribution in Malawi”, reads part of the 6th February order.

The Court further elucidated that its order prohibiting Yamaha Motor Company Limited from executing the purported termination of its exclusive distributorship arrangement with Stansfield Motors implies that the agreement between Yamaha and Stansfield remains valid and in effect. Consequently, Yamaha Distributor South Africa (YDCA) is instructed to maintain collaboration with Malawi’s third party merchants, including Luthando Holdings Ltd.

In the meantime, accusations have surfaced alleging that Paramount Holdings committed contempt of court by purportedly submitting a tender to the Electricity Supply Corporation of Malawi (ESCOM) using documentation from the terminated distributorship agreement sanctioned by the court.



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