Sostenus Wilherm
The High Court of Namibia has postponed a legal battle in which Shoprite Namibia (Pty) Ltd is seeking more than N$16 million from Amarula Investment CC, Gerome Meshawn Schmidt, Amalia Maxine Schmidt and SchmidtCo. Property Development Company (Pty) Ltd over outstanding financial obligations linked to an OK Foods franchise in Ongwediva.
The matter was before High Court judge Shafimana Ueitele in Windhoek on Wednesday. According to a court order, the case was postponed to 10 September 2026 for a status hearing, pending the outcome of an interlocutory matter before deputy judge-president Hannelie Prinsloo.
The dispute arises from a franchise agreement entered between Shoprite Namibia and Amarula Investment CC in 2018.
Under the agreement, Amarula was granted an OK Foods franchise at Shop No. 1, Erf 3296, Maroela Mall, Mandume Ndemufayo Road in Ongwediva for an initial period of 60 months.
The agreement required Amarula to pay monthly franchise fees and allowed it to purchase stock through a credit facility provided by Shoprite.
The credit facility was set at N$2.7 million per month, while Shoprite was required to issue monthly statements reflecting amounts due, which were payable within 30 days.
According to Shoprite, Amarula fell into arrears and eventually stopped making payments altogether on 5 September 2022.
Shoprite subsequently cancelled the franchise agreement through emails sent on 6 and 13 September 2022, with the cancellation taking effect on 30 September 2022.
Shoprite states that it later applied proceeds from a N$3.5 million bank guarantee towards reducing Amarula’s outstanding balance.
Despite this payment, the company calculated that Amarula still owed N$8.189 million as of 5 October 2023.
That amount consisted of N$6.889 million in capital and N$1.299 million in interest.
Shoprite is further claiming N$1.926 million as a contractual penalty following the cancellation of the franchise agreement.
The penalty was calculated using an average monthly franchise fee of N$37,041.05 over 52 months, covering the period from September 2022 to December 2026.
The dispute also involves an Instalment Sale Agreement concerning the refinancing of goods supplied to Amarula. Shoprite says the agreement was cancelled after the franchise agreement was terminated, resulting in the full outstanding balance becoming immediately due.
As of 5 October 2023, Shoprite placed the balance under the Instalment Sale Agreement at N$6.051 million.
Gerome Schmidt, Amalia Schmidt and SchmidtCo. Property Development Company are also cited in the proceedings because they allegedly entered into written suretyship agreements with Shoprite for Amarula’s obligations.
According to the court papers, Gerome and Amalia Schmidt signed suretyship agreements in July 2018, while SchmidtCo. entered into its agreement in September 2019.
They allegedly bound themselves as sureties and co-principal debtors for Amarula’s obligations to Shoprite, with SchmidtCo.’s liability under the suretyship limited to N$5 million.
Shoprite is also relying on a surety mortgage bond registered over Erf 6450, Ongwediva Extension 14, measuring 4,252 square metres.
The property is owned by SchmidtCo. Property Development Company and was placed as security for obligations owed to Shoprite.
The mortgage bond secured an amount of up to N$4.5 million, with a further N$900,000 provided for costs and other charges associated with enforcing the security.
In its claim, Shoprite is seeking payment of N$8.189 million under the franchise agreement, N$6.051 million under the Instalment Sale Agreement and N$1.926 million as a contractual penalty.
The company is also seeking interest at 20% per annum on the respective amounts, legal costs and an order declaring the Ongwediva property executable for up to N$4.5 million in capital and N$900,000 in costs.
The case will return to the High Court on 10 September for a status hearing, with its progress dependent on the pending interlocutory outcome before judge Prinsloo.
