Court Orders GIFT Trading to Transfer Lease Rights for Business it Sold Three Years Ago

A nearly two-year court litigation over the sale of a wholesale business by GIFT Trading Plc to BMJ Plc comes to an end, at least for a while, with the court accepting and rejecting some of the claims from both the plaintiff, BMJ, and the defendant, GIFT.

The case started on July 17, 2013, when BMJ filed a suit at Lideta Federal High Court asking the court to order GIFT to transfer the lease right of the houses, which are owned by the Agency for the Administration of Government Houses (AGH), and to pay it a compensation of 527,000 Br for the time that it claimed it had failed to use the houses.

The deal between the two signed on March 12, 2012, involved the sale of a business GIFT runs from two adjacent houses in Wereda One of the Addis Ketema District. BMJ has paid 2.2 million Br for acquisition, using money, which it said it borrowed from Wegagen Bank. It claimed in its suit that the two had signed an additional agreement at the Documents Authentication and Registration Office (DARO) to facilitate the transfer of GIFT’s lease right with AGH to BMJ. BMJ also asked the court for the eviction of GIFT from part of one of the houses which it continued holding after the sale of the business.

GIFT said in its defence that it cannot transfer the lease rights to the houses, which belong to the AGH. It also claimed that it could not be made to compensate BMJ for the time it did not use the buildings, which it said was BMJ’s own fault.

The court, based on documentary evidence, rejected the plaintiff’s claim for compensation, as it had already received the business; this same reason was also why the court rejected the claim for eviction. The Court also rejected the defence of Gift Trading, that it had not agreed to transfer its lease right on the houses of AGH, noting that article 155, sub-article two of the Commercial Code stated, with regard to the sale of a business enterprise, that all things must be transferred for the sale to be valid. The court, therefore, ruled that GIFT transfer the lease rights to the houses, even though it was not agreed expressly in the contract.


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