Naivas Supermarket has moved to court seeking orders to prevent New Kenya Co-operative Creameries Limited (KCC) from disposing of its assets or transferring funds from its bank accounts, citing concerns that the dairy processor’s planned restructuring could jeopardise recovery of a KSh420 million claim. The application filed in Kenya, seeks to preserve KCC’s assets pending the determination of arbitration proceedings arising from a distribution agreement between the two companies.
The supermarket wants the court to restrict the sale, transfer, leasing or charging of KCC’s factories, machinery, vehicles, equipment and other properties. It is also seeking orders barring the dairy processor, its agents and financial institutions from withdrawing or transferring funds held in its bank accounts.
Naivas has asked the court to direct KCC to provide security for the claim within 14 days, either through an irrevocable bank guarantee issued by a reputable Kenyan commercial bank or a cash deposit into an interest-earning joint escrow account held by the parties’ advocates.
If KCC fails to comply, the retailer wants the attachment of the dairy processor’s factories, real estate and fixed assets pending the determination and enforcement of the arbitral award.
The dispute stems from a distribution agreement dated January 1, 2022, which provides for arbitration under Clause 18(b). According to Naivas’ lawyer, Philip Nyachoti, arbitration proceedings were instituted following court directions issued on December 1, 2025. Hearings are scheduled for November 5 and 18, 2026.
Naivas argues that government plans to restructure and modernise KCC have heightened concerns about the preservation of the company’s assets. The application cites announcements made by President William Ruto during the Agriculture and Food Systems Transformation Summit held in Nairobi from October 7 to 9, 2026.
Among the proposals is a government settlement of approximately KSh8 billion in KCC’s outstanding debts and liabilities through a forthcoming Supplementary Budget, alongside changes to its processing facilities and financial operations.
The supermarket maintains that disposing of assets before the arbitration concludes could undermine its ability to recover any amount awarded in its favour.
The application is yet to be determined by the court.
