Economy

Judge declines to allow Sarrai Group resume Mumias operations

mumias

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

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Summary

  • A judge Wednesday declined to issue orders allowing Uganda-based Sarrai Group to continue operations at Mumias Sugar Company as pleaded by the Kakamega County government.
  • Justice William Musyoka said he would consider the application by the county, after seeing court filings by other parties.

A judge Wednesday declined to issue orders allowing Uganda-based Sarrai Group to continue operations at Mumias Sugar Company as pleaded by the Kakamega County government.

Justice William Musyoka said he would consider the application by the county, after seeing court filings by other parties.

He added that he would also consider claims that the order, seeking to allow the firm to continue with the 20-year lease, might conflict with another one the High Court in Nairobi issued.

Through senior counsel James Orengo, the county said Sarrai Group took over the operations on December 22 and was on the ground when the court stopped the revival plans on December 29.

He urged the court to order the parties to maintain the status quo, which will allow Sarrai to proceed with the leasing plans.

The application was opposed by Tumaz & Tumaz Enterprises, saying the court lacks jurisdiction to hear the case.

Through lawyers Javier Munzala and Maureen Nasimiyu, the firm said the court should first consider the application challenging the jurisdiction before hearing any application.

Ms Nasimiyu urged the court to consider another petition, before the High Court in Nairobi, which stopped any operations at Mumias until the case is determined.

Wesley Gichaba for Sarrai supported Mr Orengo, saying the firm had hit the ground when the order stopping the operations was issued.

The county filed the petition, saying Tumaz had not demonstrated its stake in Mumias or the leasehold even though the firm has sought to block the reopening of the ailing miller.

“Whilst the first defendant (Tumaz) has not brought to the court evidence of the damage that it will suffer if the interested party continues operationalising the leasehold. The stay of the leasehold will lead to massive loss of revenue for the plaintiff and financial loss for the interested party who has contracted other third parties to carry out the revival plans of the company and is further exposed to legal action by the said parties due to the stay,” the county says in the petition.

Justice Musyoka directed the parties to file their submissions ahead of the hearing on January 28.

The lease was first challenged by Tumaz, arguing that the bidding was not transparent and the process was marred with irregularities.

Tumaz was the highest bidder with Sh27.6 billion with Sarrai Group bidding at Sh11.5 billion France's Kruman Finances, was the second-highest bidder with Sh19.6 billion.