Market News

Growers allowed to amend suit fighting sections of Tea Act

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An auctioneer takes buyers through the markets at East African Tea Trade Association auction. FILE PHOTO | NMG

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Summary

  • A bench of three judges ruled that the Kenya Tea Growers Association was not introducing new issues to the case but the amendments were meant to particularise the illegalities in the Act.
  • Attorney-General Kihara Kariuki had opposed the amendment, saying the association wanted to introduce new issues and delay the hearing of the case.
  • In the petitions, which were consolidated, more than 15 companies under Kenya Tea Growers Association and East African Tea Trade Association challenged sections of the Tea Act, arguing they are unconstitutional.

Tea growers have been allowed to amend a petition they filed last year challenging sections of the Tea Act, which they said was unconstitutional.

A bench of three judges ruled that the Kenya Tea Growers Association was not introducing new issues to the case but the amendments were meant to particularise the illegalities in the Act.

Attorney-General Kihara Kariuki had opposed the amendment, saying the association wanted to introduce new issues and delay the hearing of the case.

Justices Hedwig Ong’udi, Anthony Mrima and Jesse Nyagah agreed with the association that the amendment would show the contravention of various statutory provisions as well as to further highlight the negative impact the implementation of some sections of the Act would have on the sector.

“We, therefore, do not see how the respondents will be prejudiced,” the judges said.

In the petitions, which were consolidated, more than 15 companies under Kenya Tea Growers Association and East African Tea Trade Association challenged sections of the Tea Act, arguing they are unconstitutional.

Among the sections targeted by the EATTA is Section 34(4), which it said is silent on the percentage of payments to be borne by the tea buyers and tea factories to pay the brokerage commission. The sections cap the brokerage fees but fail to indicate how the fees will be paid, according to EATTA.

The association wants the court to interpret and determine whether some sections are constitutional. The enactment of Section 53 of the Act on the provision of tea levy, the association adds, shall be ultimately borne by the farmer or producer of tea.

This law, which came into effect on January 11, 2021, says all teas should be offered on the tea auction floor.

The tea estates argue the sections challenged will have a negative effect on other tea players, particularly large-scale plantations, which have existing contracts for direct sales with overseas buyers. The contested sections were suspended.

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