Dubai firm sues Kenyan gold trader Mwita over Sh63m deal
The Dubai firm said it engages in the purchase and importation of gold as an end user for use in its medical sector.
A Dubai-based firm has sued a gold-trading company seeking a refund of more than Sh63 million it paid for the precious metal in June, but which was never delivered.
SH Trading DMCC says in court documents that it paid $489,950 for purchase of 700 kilogrammes of gold to be delivered in Dubai on June 5, 2024, by Kerongwe & Sons General Traders Ltd.
Through lawyer Kenneth Amondi, the Dubai-based firm says despite paying for the commodity and agreeing on modalities for delivery of the gold, the same was never delivered.
The company is demanding a refund of the amount paid plus interest, as well as damages suffered for the breach and loss of business from Kerongwe & Sons General Traders Ltd and its Chief Executive Officer John Kerongwe Mwita.
“It is the plaintiff's case that pursuant to the purchase agreement for sale of gold bars, the defendant's breach has resulted in the plaintiff losing a budgeted line of 700kg of gold, a business valued at US$28,000,000, hence its supply chain has been massively disrupted occasioning serious gaps to its manufacturing lines which now have to contend with failed deliveries,” SH Trading DMCC says in court documents.
The Dubai firm said it engages in the purchase and importation of gold as an end user for use in its medical sector.
It set up base in Kenya and its officers had the opportunity to meet key industry players, more specifically the Kerongwe & Sons General Traders Ltd and Mr Mwita who were referred by contacts at the Ministry of Mining, hence the firm had total confidence when dealing with them.
When the parties met, officials of the Dubai-based firm were allegedly shown the availability of about 720 kilogrammes of gold.
Gold tested
Mr Amondi said the firm insisted on a test being done on samples, and it was allegedly done at the Ministry of Mining, where 63.5819 grammes, was tested and its authenticity confirmed.
The lawyer said they produced the evaluation certificate dated May 24, 2024, of the gold samples allegedly determined by the Ministry of Mining, Blue Economy and Maritime Affairs.
The firm said it demanded from Mr Kerongwe — who was acting together with Bulk Cargo Logistics Ltd, Mr Damian Chacha and Mr Edwin Hadad — the gold bars and they were physically produced during a meeting at the seller's office in Spring Valley.
According to Mr Amondi, it was on this basis that they proceeded to sign the contract for supply of the precious metal.
“The plaintiff shall during the hearing hereof produce the pictures and video evidence of the defendants demonstrating the 720kg of gold bars at their Nairobi Spring Valley offices,” Mr Amondi said.
The trader says the monies were paid on diverse days either through cash, by wallet and bank transfer.
“It is the plaintiff’s case that notwithstanding the plaintiff paying the defendants $489,950 to facilitate the process of export of the gold as agreed by parties, the same was not done and to date, the plaintiff is yet to receive the commodity,” the firm said.
The company said Kerongwe & Sons General Traders Ltd claimed to be core players in the gold business with mining interests in Migori, and demonstrated that its warehouse in Nairobi had 260kg of gold of customs value $11.7 million.
“That the 2nd and 5th defendants (Kerongwe), who were the prime movers of the contract for sale of gold afore-stated, affirmed the faith they had in their affiliates the 1st, 3rd and 4th defendants by issuing an undertaking in terms of personal and corporate guarantee promising to indemnify the plaintiff in the event of any losses to be incurred by reason of failure of the transaction,” Mr Amondi said.
