KTDA wins Sh53m in contract row

Smallholder farmers under the Kenya Tea Development Agency (KTDA) have won Sh53 million in a court settlement in a protracted dispute with tea brokerage firm Victoria Tea Brokers.

KTDA had filed against Victoria 10 years ago, accusing the tea broker of reneging on a signed agreement on proceeds from the sale of made tea at Lutein, Kapset, Kiru, Momul, and Kapkoros tea factories.

Judge Patrick Otieno ruled that KTDA had proved that Victory owed a sum of Sh73 million at the time of filing the suit, out of which KTDA had received Sh20 million, leaving a balance of Sh53 million.

By so doing, the judged ruled, Victoria was in breach of a tea brokerage agreement between itself and KTDA, the Constitution as well as the rules of East Africa Tea Trade Association.

 “I do enter judgment for the plaintiff against the 1st defendant together with costs thereof as well as interest at court rates from October 30, 2008, being the contractual date, the sum was due for remittance to the plaintiff, till payment in full,” said Judge Otieno in his ruling.

KTDA lauded the ruling as a major win for smallholder tea farmers across the country, saying it sets precedence against such breaches that hurt their earnings. KTDA-affiliate tea factories have arrangements with tea brokerage firms to sell their tea to the highest bidder on their behalf at the Mombasa auction at a fee.

The firms are then supposed to remit sale proceeds to KTDA that, in turn, forwards them to the factories.