Two rival Tanzanian firms, Bakhresa Group and Azania group of companies, both with interests in Rwanda are involved in a bitter feud over a ‘stolen’ brand name in a case that will pit three of Kigali’s top law firms against each other.
Both Bakhresa and Azania are originally registered in Tanzania from where they have grown to expand to other countries, including Rwanda.
In Tanzania, the two firms are bitter rivals because they’re involved in the grain milling business and produce similar flag flour products; Azam flour by Bakhresa and Azania flour by Mikoani Traders Ltd.
Naturally, both companies wish their brands to have a dominant share of the market hence the rivalry.
Bakhresa, the larger of the two rivals is well established in the region with a wide range of product portfolio produced under the well known brand name of Azam and some of Azam products include Azam wheat flour and Azam beverages.
Azania group of companies meanwhile is owned by Mikoani Traders Ltd but it markets all its brands under one name, Azania, which is partly why Mikoani is little known.
Under Azania group of companies, there are three separately registered companies using the Azania brand name, namely, Azania wheat Flour Ltd, Azania Polybag Ltd and Azania grain bulk Ltd.
Feud genesis
On January 9, 2009, Bakhresa Grain Milling Limited, was incorporated in Rwanda with an objective of manufacturing wheat products to cater for the local demand in Rwanda and export to Eastern Congo and Burundi.
The company operations in Rwanda are based at the Special Economic Zone, Kigali where it started commercial production in May 2011 with a milling capacity of 12,000 metric tonnes.
Today, Bakhresa has several products on the Rwandan market produced and supplied under the brand name of Azam but these mainly include Azam wheat flour and Azam baking wheat flour (Ngano).
But as Bakhresa operations started Rwanda, their rival, Azania group was also eyeing to expand their interests to the country and registered as a foreign investment company on July 27, 2011.
On August 11, 2011, the company received an investment certificate under a different name, Mikoani Traders Limited.
After registration, Mikoani proceeded to acquire a plot in the special economic zone and hired Questafrica Ltd, a construction consultancy firm to provide technical guidance to establish Azania Grain Milling Factory –Rwanda.
According to technical details, Azania Grain Milling Factory –Rwanda would have a capacity of producing 750 tonnes of wheat flour per day.
Stolen brand
In the process of registering the firm in Rwanda, Mikoani apparently realised that the Azania brand was already taken up and copyrighted by someone else in Rwanda.
On inquiry from RDB, they were shocked to discover that the Azania brand was copyrighted to their rival, Bakhresa.
The development meant that Mikoani products in Rwanda would not be produced or marketed under the well known brand of Azania.
Brand and marketing experts say this was a blow to Mikoani because developing a new brand in a new market takes time and a lot of money.
Mikoani immediately lodged a complaint to RDB seeking intervention in order to recover their brand name from Bakhresa. These negotiations have been ongoing, quietly, for over a year but no amicable solution could be reached.
Legal suit
After failing to find redress out of court, Mikoani has now taken the case to the Nyarugenge commercial court.
The case will pit three of Kigali’s most prominent legal brains against each other as they represent the interests of their Tanzanian based clients.
Mikoani, the complainant is being represented by two established commercial lawyers; Geoffrey Mwine, the managing partner at GMCC Law Chambers and Safari Kizito, an experienced advocate with Bona Fide Law Chambers.
Mwine and Kizito will lock horns with Moise Nkundabaarashi, a senior partner with Trust Law Chambers, another well known firm in Kigali, who is going to defend Bakhresa interests in the suit.
On Thursday, January 8, 2015, lawyers representing the feuding Tanzanian firms appeared in the Nyarugenge commercial court for the preliminary hearing, before the judge set a date for the first hearing.
Safari Kizito, one of Mikoani’s lawyers, said his client wants the judge to annul the process in which RDB awarded the Azania brand to Bakhresa and restore the copyright ownership to Mikoani.
“Clearly, the process of acquiring our client’s brand name was done in bad faith and against principles of fair competition and we shall be asking court to consider these facts and grant our client justice,” Kizito said.
Mikoani lawyers also want court to award their client at least $360, 000 in consequential damages; this excludes the lawyers’ legal fees.
However, the lawyers representing Bakhresa argue that their client did not violate any laws in moving to ‘protect a brand that wasn’t protected in Rwanda, at the time.
“At the time of acquiring the brand (from RDB), Azania was not owned by anyone in Rwanda and, therefore, our client was right to protect it,” said Bakhresa lawyer, Nkundabaarashi.
He also revealed that at the time of acquiring the brand in Rwanda, Mikoani’s copyright over Azania had expired in Tanzania which technically meant it was an orphaned brand which needed protection.
Analysts say that by acquiring the Azania brand in Rwanda, Bakhresa successfully blocked a major competitor from eating into the market base of their own Azam flour products in Rwanda.
RDB on the spot
According to Mikoani’s lawyers, the office of registrar general at RDB is to blame for the loss of their client’s brand name.
“RDB failed to carry out proper due diligence to ascertain whether the brand, Azania, was unprotected either in Rwanda or in the EAC, under the spirit of regional integration,” Kizito said.
When contacted for a comment, RDB, in a statement, denied wrongdoing, quoting a law under which its officials acted.
“It is mandatory to register a trademark to claim a right; –the protection is territorial, there is no agreement or convention between EAC member states on trademark protection.
“All member states use the Paris convention, Bakhresa filed the Azam and related trademarks on 7/11/2012 and received protection on April 2013 before Mikoani,” reads the statement.
RDB added that the office of the registrar general followed the principle of ‘first file, first protection’ adding that since Mikoani’s Azania trademark is only registered in Tanzania, it doesn’t have effect in other country (principle of territorial protection mentioned before).
“Mikoani do not have a trademark protection in Rwanda. They have to prove in court that the trademark Azania is a globally known mark, which doesn’t require a registration procedure,” reads the statement.
Today afternoon, at 2pm, January 14, Nyarugenge commercial court will convene to hear arguments and counter arguments from both sides representing the interests of the Tanzanian rivals.
Fuad Edha is founder and Managing Director of Mikoani Tanzania while Said Salim Bakhresa is the founder of Bakhresa Group.
Missed IFC US$24M deal
According to information on the Bakhresa Rwanda website, the company, in partnership with International Finance Corporation (IFC), acquired a new state-of-the-art ultra modern wheat milling machinery, worth $24 million.
The modern plant is supposed to help boost Bakhresa production capacity to produce and supply wheat products in Rwanda and the region.
However, The New Times has seen a document from IFC which indicate that that cooperation was initially supposed to be with Mikoani and not Bakhresa.
“IFC is considering to invest two “A” loans with total amount of up to US$12 million to finance US$ 25 million green field wheat flour milling projects in Rwanda and Burundi (150 ton-per-day (“TPD”) capacity each – the “Projects”) sponsored by Mr. Fuad Edha (the “Sponsor”) who is owner of Mikoani Traders Limited (“Mikoani Tanzania”), a flour miller in Tanzania.”
According to the document, the project in Rwanda would be located on Plot D1 & E1 in the Special Economic Zone, Munini Cell, Ndera Sector, and Gasabo District.
In the documents, the IFC says the project was meant to help Rwanda and Burundi to promote local production of key food staples and value addition rather than rely on food imports in addition to creating approximately 220 full-time jobs (of which 40 women) and approximately 80 casual/daily labour for Rwanda and Burundi.
The project had been approved by IFC board in 2013 for Mikoani. Bakhresa acquired the Azania brand in April 2013. It’s not clear whether Mikoani also lost their mega million IFC deal to their rivals.
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FACT FILE
- Bakhresa Group and Azania group of companies (owned by Mikoani Traders Ltd) are rival firms in Tanzania
- Bakhresa flag brands include Azam wheat flour products
- Azania group of companies flag brand include Azania Wheat Flour products
- The two brands are bitter competitors in Tanzania
- In January 2009, Bakhresa Grain Milling Limited was incorporated in Rwanda
- Bakhresa applied to RDB and acquired Azania brand copyright in Rwanda
- Azania group wasn’t informed of their brand ‘takeover’ in Rwanda
- RDB says it acted on the ‘first file, first protection’ principle
- In 2011, Azania group got a certificate of investment in Rwanda under the name Mikoani Traders Limited
- Mikoani is supposed to set up a grain milling factory in Rwanda to produce Azania flour brands
- But the Azania copyright in Rwanda is now owned by their rival, Bakhresa
- A legal battle has ensued with the first hearing set for January 14
The New Times, Rwanda
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