A Dubai-based brokerage firm, Car Commercial Brokers, has filed a lawsuit against drug manufacturer Cipla Quality Chemical Industries Ltd for the alleged non-payment of brokerage fees amounting to $620,000 (approximately Shs2.3 billion). The case revolves around a deal involving the supply of Anti-Retroviral Drugs (ARVs) to the government of Zambia.
According to court documents, the dispute originated from a contract signed between Cipla Quality Chemical Industries Ltd and Car Commercial Brokers on November 17, 2017. The contract stipulated that Car Commercial Brokers would receive a five percent commission on the total sale value of all business generated from Zambia as part of its brokerage fees.
Car Commercial Brokers claims that it fulfilled its contractual obligations by connecting Cipla Quality Chemical Industries Ltd with the government of Zambia to sign contracts for the supply of ARVs worth $19 million. However, the brokerage firm alleges that Cipla Quality Chemical Industries Ltd failed to honor the contract by not paying the agreed brokerage fees, resulting in a shortfall of $620,000.
During the court proceedings, Car Commercial Brokers argued that it had created a market for Cipla Quality Chemical Industries Ltd in Zambia, facilitated payments for the supplied ARVs, and requested the court to order the payment of the $620,000 in brokerage fees along with additional damages.
Cipla Quality Chemical Industries Ltd defended itself by claiming that Car Commercial Brokers had not fulfilled its obligations, including securing markets with the Zambian government and helping the drug manufacturer increase its market share in Zambia. The company also pointed out that the payments received by the brokerage firm were inconsistent with the value of goods supplied.
The court has directed both parties to file written submissions in October, with the judgment to be delivered at a later date.
This legal dispute highlights the importance of contractual agreements and the potential consequences of non-payment or disputes over fees in business transactions.