Companies

Fresh twist as Mumias lease cancel order now suspended

mumias

Entrance gate at Mumias sugar company. PHOTO | ISAAC WALE | NMG

The drama surrounding the lease of Mumias Sugar Company #ticker:MSC is far from over after the High Court suspended a decision cancelling the contract given to Uganda-based Sarrai group to run the ailing miller for 20 years.

Justice Dorah Chepkwony froze the revocation of the 20-year lease after Sarrai moved back to court arguing that the company was condemned unheard.

Sarrai further said Justice Alfred Mabeya, who cancelled the lease and ordered the firm to leave Mumias Sugar premises immediately, granted the order which was not sought.

Justice Mabeya also revoked KCB appointed receiver-manager PVR Rao as the administrator of Mumias Sugar in the April 14 ruling.

“That pending the hearing and determination of this application inter-partes, a stay of execution and enforcement of the order…revoking, cancelling and nullifying the lease issued to the applicant and directing the applicant to forthwith vacate the premises of Mumias be and is hereby granted,” Justice Chepkwony said.

The lease was cancelled after lawyer Jackline Kimeto, who is demanding Sh76 million from Mumias, argued that Mr Rao had not acted in the best interest of the company.

“The court subsequently issued the order revoking, cancelling and nullifying the lease granted to the applicant, condemning it unheard and thus sealing its fate contrary to the rules of natural justice and fair hearing,” Sarrai’s lawyer Wesley Gichaba said.

Mr Gichaba said Sarrai intends to file an appeal which will be rendered useless unless the order is suspended.

“Unless this court urgently intervenes, the applicant stands to suffer substantial loss of the investment of Sh5.6 billion,” Mr Rakesh Kumar, a manager at Sarrai said in an affidavit.

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