A Mombasa court has halted payment of more than Sh60 million compensation awarded to a sugar company following an illegal raid, seizure of its goods and closure of its business premises in 2018.
The order stopping the payment to Kwale International Sugar was issued following an application by the Kenya Bureau of Standards (Kebs).
Court of Appeal judges Stephen Kairu, Pauline Nyamweya and Jessie Lesiit allowed the Kebs application to pave the way for the hearing and determination of an appeal challenging the award.
“We order a stay of execution of the judgment in respect of the orders for payment of Sh10 million and compensation for 8,995 bags of sugar pending the hearing and determination of the appeal,” said the judges.
While issuing the order, the judges said the court was satisfied that the appeal is not frivolous and it is arguable.
The government agency has appealed the judgement of Justice Erick Ogola that was in favour of the sugar firm following the seizure of its property and the closure of its business premises.
Justice Ogola had found that the Kebs as part of a multi-agency team comprising the Directorate of Criminal Investigations and Kenya Revenue Authority illegally raided and sealed off the firm’s factory, warehouses and stores, impounded and sealed lorries that had been loaded with sugar and collected samples from the warehouses.
The judge then declared that the State agencies violated the miller’s constitutional rights, and declared the seizure of the firm’s factory, warehouses and stores illegal and unconstitutional.
However, the firm, through Prof Tom Ojienda, opposed the Kebs application terming it an abuse of the court process.
The court granted a mandatory injunction compelling the government agencies to immediately lift the seizures and allow the company access to its factory, warehouses and stores
Kebs was also compelled to renew the firm’s standardization permit with respect to Kwale sugar, permanently restrained the agency from purporting to seize the sugar consignment stored in its warehouse and ordered payment of Sh10 million compensation for loss suffered as a result of the seizure of sugar consignment and closure of its factory
The court also ordered that the firm be compensated for 8,995 bags of sugar, based on the market value of each bag, which Kebs had refused to re-test in violation of the court order.
Kebs has however appealed this judgment.
In its court documents, the government agency has submitted that the intended appeal is arguable and that its case has been brought in the interest of the public.
“The intended appeal will be rendered nugatory unless the orders sought are granted,” said the agency.
In its memorandum of appeal, Kebs faults the High Court for descending into the arena of the dispute, aiding the firm by reframing its case and conducting two hearings to aid the company and rendered two judgments while ignoring statutory provisions under the Standards Act in ordering it to unconditionally renew the standardization permit.
Kebs also argued that the judge ordered it to pay Sh10 million as “nominal damages” without any factual or legal foundation and when no such claim was pleaded or proved.
The multi-agency team closed the miller’s factory in a swoop in June 2018.
Kiscol had on October 26, 2018, sued Kebs, KRA, (DCI) Inspector-General of Police (IGP), Ministry of Trade and the Attorney-General (AG) alleging economic sabotage and abuse of power following the crackdown on illegal sugar.
The company was to also receive a total of Sh59 million as compensation for 8,995 bags of sugar which Kebs refused to re-test in compliance with the court order.
