The High Court has ordered an Indian welding products manufacturer to deposit Sh30.9 million before a high-stakes trademark dispute against its former Kenyan business partner can proceed, intensifying a commercial battle centred on allegations of brand infringement and passing off.
The court directed Superon Schweisstechnik India Limited (SIL) to provide the security within 45 days and suspended further proceedings of the case until the money is deposited in a joint interest-earning account operated by lawyers for both parties.
The ruling marks the latest development in a dispute between Superon and a local company named Oxychem Africa Limited. The two companies previously maintained a commercial relationship before falling out over the use of the Superon brand in Kenya.
In the infringement suit filed November 2023, Superon accuses Oxychem of infringing its trademark and copyright and passing off products as those of the Indian manufacturer.
The company is seeking damages totalling Sh900 million, comprising Sh600 million in general damages and Sh300 million in exemplary damages, alongside other remedies.
Oxychem, however, denies the allegations and has maintained that it has a valid defence to the claims.
In allowing the application for security for costs, the court said Oxychem faced a real risk of being unable to recover its legal costs if it successfully defended the case.
“It is not in dispute that SIL is a company incorporated and resident in India,” the judge said in the ruling.
The court noted that no treaty, convention or statutory framework had been presented to demonstrate reciprocal enforcement of Kenyan judgments in India.
“If this suit were to be decided in Oxychem’s favour and costs were awarded against SIL, Oxychem would face the considerable and potentially prohibitive burden of enforcing that costs order in a foreign jurisdiction through separate proceedings,” the court said.
It added that Superon had no known assets within Kenya and that Oxychem therefore faced “a real and not merely theoretical risk” that any cost award would be unenforceable within the country.
Superon opposed the application, arguing that Oxychem had long known its address and business contacts because of their previous commercial dealings.
The Indian company also said it was the aggrieved party in the dispute and was suffering losses from the alleged infringement.
The company further argued that Oxychem had produced no evidence showing it was incapable of paying costs if ordered to do so.
The court agreed that Oxychem had not produced financial records or other documents specifically addressing Superon’s financial position.
However, it held that the central issue was not whether the company was financially weak but whether a costs order could realistically be enforced against a foreign litigant with no known assets in Kenya.
“The two inquiries are conceptually distinct,” the judge said. The court also rejected any suggestion that the order would deny Superon access to justice, noting that the company had not produced evidence showing it lacked the financial capacity to furnish the security.
The dispute concerns the protection of international brands in Kenya and the risks faced by businesses involved in cross-border distribution arrangements.
