Naivas Supermarket has asked the court to stop New Kenya Co-operative Creameries Limited (KCC) from selling its assets or transferring money from its bank accounts.
The supermarket fears that KCC’s planned restructuring could affect its ability to recover KSh420 million. Naivas claims the dairy processor owes it the money.
The retailer wants the court to preserve KCC’s assets and funds until the parties resolve their dispute through arbitration.
Naivas Seeks Orders to Block Sale of KCC Assets
Naivas wants the court to prohibit KCC from selling, transferring, leasing or using its properties as security for loans.
The proposed restrictions cover factories, machinery, vehicles, equipment and other assets.
The supermarket also wants the court to restrict withdrawals and transfers from KCC’s bank accounts. These measures would protect the funds as the court considers the application and arbitration continues.
Additionally, Naivas wants KCC to provide security for the KSh420 million claim within 14 days of receiving the court order.
KCC could provide an irrevocable bank guarantee from a reputable commercial bank in Kenya. Alternatively, it could deposit the money into an interest-earning joint escrow account held by the parties’ advocates.
If KCC fails to provide the security, Naivas wants the court to attach its factories, real estate and fixed assets. The supermarket says this would protect its claim until the parties enforce the arbitral award.
Dispute Stems From 2022 Distribution Agreement
The dispute began with a distribution agreement that the two companies signed on January 1, 2022.
Clause 18(b) of the agreement requires the parties to resolve disputes through arbitration.
According to Naivas’ lawyer, Phillip Nyachoti, the arbitration proceedings began after the court issued directions on December 1, 2025.
The parties have scheduled hearings for November 5 and 18, 2026.
Naivas now wants the court to protect KCC’s assets while the arbitration process continues.
KCC Restructuring Raises Debt Recovery Concerns
Naivas says recent government announcements about KCC’s restructuring and modernisation have heightened its concerns.
The supermarket fears that the planned changes could affect its efforts to recover the money.
Its application refers to policy announcements President William Ruto made during the Agriculture and Food Systems Transformation Summit. The event took place at the Jamhuri Park ASK Showground in Nairobi from October 7 to 9, 2026.
One proposal involves a government settlement of about KSh8 billion in KCC’s outstanding debts and liabilities. The application says the government plans to pursue the settlement through the forthcoming Supplementary Budget.
The application also cites plans to modernise KCC’s milk processing plants, machinery and supply infrastructure.
Other proposed changes would reorganise the company’s financial operations and payment obligations to dairy farmers.
Naivas Fears KCC Could Dispose of Its Assets
Naivas argues that the proposed changes could lead to the transfer or sale of KCC’s assets and funds before the arbitration ends.
The supermarket fears that such transactions could make it harder to recover the KSh420 million if the arbitrator rules in its favour.
It says the loss of accessible assets could weaken its chances of enforcing a favourable award.
Naivas maintains that it filed the application promptly after the government’s October announcements. It wants the court to preserve the current position until the parties resolve the dispute.
Court Yet to Rule on Naivas Application
Naivas Managing Director Anthony Munene Kibetu has sworn an affidavit supporting the application.
The supermarket has also asked the court to certify the matter as urgent.
It wants the court to hear the application ex parte at the initial stage. This would allow the court to consider the request without the other party present.
Naivas has also asked the court to dispense with service initially.
The court has yet to rule on the application. Therefore, the requested restrictions remain subject to the court’s decision.
