Milimani Court Judge says Mumias Case ought to be determined expeditiously

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Presiding Judge at the Milimani Commercial Court, Justice Alfred Mabeya has said the case where five farmers are challenging the leasing of Mumias Sugar Company ought to be determined expeditiously. Consequently, he has fixed the case’s hearing for four consecutive days starting February 14th to 17th, 2022.

On January 14th, 2022, the farmers, Lambert Lwanga Ogochi, Augustino Ochacha Saba, Prisca Okwanko Ochacha, Robert Mudinyu Magero and Wycliffe Barasa Ng’onga obtained orders stopping operations at the sugar milling plant. The defendants in the case are Ponangipali Venkata Ramana Rao, KCB Bank Kenya Limited, the Attorney General, Cabinet Secretary Ministry of Agriculture, Livestock and Fisheries, Competition Authority of Kenya, Sarrai Group Limited, Chief Land Registrar, County Government of Kakamega and Capital Markets Authority.

When the matter came up before Milimani Commercial Judge, Justice Wilfrida Okwany on January 25th, 2022, she extended the orders to March 14th, 2022 and enjoined West Kenya Sugar Limited in the case. West Kenya, through senior counsel, Paul Muite had faulted the bidding process saying it was not conducted in a fair and transparent manner as they were the highest bidder at Ksh 36 billion and the Ugandan firm, Sarrai Group which was awarded the tender was the lowest bidder at under Ksh 6 billion.

While giving directions on the matter, Justice Mabeya noted that since the case by the farmers was filed in court in January 2022, several applications have been filed by not less than five interested parties, with other parties seeking to set aside the order, another party filing preliminary objection to the suit and others seeking to be enjoined in the matter.

“The dispute should be determined expeditiously. It must be resolved at once without much delay,” Justice  Mabeya said.

He enjoined the parties seeking to be part of the suit and directed them to file their papers within three days and the applicants to file responses within three days. The parties were directed to file written submissions within seven days starting February 7th, 2022.

When the case comes for hearing starting February 14th, the parties will be highlighting the written submissions.

The farmers are contesting the lease on grounds that it was undertaken in an opaque manner and awarded to the lowest bidder, Sarrai Group without regulatory approvals.

In response, Sarrai Group say the lease for operating and taking over assets of Mumias Sugar Company was not marred with “improprieties, fraud and apparent corruption as averred” and that the farmers have failed to place before court convincing material to demonstrate corruption in the process leading to the award of the lease to the company. Sarrai Group argues that assets of Mumias Sugar Company are wasting away because of the orders stopping its operations.

On his part, Mr Rao said the lease was awarded to Sarrai Group because during technical evaluation, it was noted that if West Kenya Sugar Company was awarded the lease of the assets of Mumias Company, then Rai Group of Companies will control at least 41.95% of the total sugarcane crushing capacity per day in Kenya.

On its part, County Government of Kakamega raised a preliminary objection to the suit saying it is misconceived, incompetent and does not show reasonable cause of action against the county.

Competition Authority of Kenya (CAK) says no merger approval has been submitted to them in relation to leasing of the assets of Mumias Sugar and it is evident that Rao’s decision to handover the assets of the company to Sarrai Group is in blatant disregard and violation of the law and amounts to criminal conduct under Competition Act 2010.