What you need to know:
- Gamma Zenith moved to court after Trinity Biotech served them with a notice of breach of distributorship agreement in May.
- The fight comes soon after a task force appointed by the Ministry of Health recommended for the adoption of the three-test HIV testing algorithm.
Two Kenyan firms are embroiled in dispute over the exclusive distribution of HIV testing kits manufactured by an Irish company.
Gamma Zenith Kenya Ltd, which says it secured a deal for exclusive distribution of TrinScreen HIV kits, which is manufactured by Trinity Biotech Manufacturing Ltd of Ireland, secured orders stopping the manufacturer from terminating the multimillion deal, pending the determination of the petition.
Gamma Zenith moved to court after Trinity Biotech served them with a notice of breach of distributorship agreement in May followed by a notice for termination of the deal on June 6.
The firm told High Court judge Alfred Mabeya that the Irish firm went ahead and appointed Radiance Pharmaceutical Ltd as its distributor, yet its contract is still valid.
“The plaintiff avers that given the term of seven years provided under clause 6.1 of the exclusive distribution agreement, the plaintiff had a legitimate expectation that the agreement would run for the whole seven years, which expectation has now been infringed by the 1st defendant (the manufacturer),” the firm said in the petition.
The fight comes soon after a task force appointed by the Ministry of Health recommended for the adoption of the three-test HIV testing algorithm.
The court directed the firm to file their submissions ahead of a ruling on October 6 on whether the matter should be referred to arbitration, as sought by Trinity Biotech.
Evidence tabled in court stated that Trinity Biotech appointed Gamma Zenith in a letter on November 8, 2021 as the exclusive distributor for TrinScreen HIV products and kits in Kenya, for seven years.
The firm said it has spent substantial amounts of money, time and resources to fulfil the obligation, among them acquiring approvals from various bodies.
Gamma Zenith said it has spent Sh19.3 million so far and anticipated to get Sh1.1 billion in profits and future earnings from the deal, apart from making commitments to business associates and the government.
The court was informed that in a memo dated August 22, the Ministry of Health said it was in the process of commencing the procurement of TrinScreen HIV kits.
However, having been terminated from the deal, Gamma Zenith said it was bound to suffer losses unless the court intervenes.
The government through the Ministry is in the process of reviewing HIV testing algorithm to align it with the current recommendations of the World Health Organisation (WHO).
The Ministry later appointed a taskforce to undertake a verification study and recommend a new testing algorithm for the country, although the process was stopped by the High Court in Mombasa last month.
Through lawyer Patrick Ngunjiri, the firm said it applied to the Ministry of Health for the kits to be approved by the taskforce for adoption of three-test HIV testing algorithm.
He said Gamma Zenith further applied and obtained a certificate of validation for reagents and equipment from the ministry of Health, and was issued with a certificate that runs from February 2022 to February 13, 2025.
It also applied for and got medical device registration certificate from Pharmacy and Poisons for distribution and sale of the kits, a certificate that is valid to February 2027.
The lawyer said the firm has also leased office space and warehouse to undertake the obligation, hired staff to run its operations and entered into contracts with a registered pharmacists to act as a consultant, who now risk being dismissed.
Has donated over 6,000 kits to the ministry’s taskforce for adoption of a three-test HIV testing algorithm for validation and field testing exercises.
But the process of reviewing the algorithm was stopped by the High Court in Mombasa last year.
They were served with a notice of breach in May and another on June 6, terminating the exclusive distribution agreement and appointed Radiance Pharmaceutical ltd as its distributor, while the contract is still valid.
Trinity asked the court to strike out the case saying a clause in the agreement states that any dispute should be handled through arbitration.
“In light of the above, the honourable court lacks jurisdiction to dispose of the notice of motion,” the manufacturer said in reply.
Radiance has also opposed the case saying Gamma Zenith has no case against it and the interim order were granted without jurisdiction.