Great storm brewing in tea industry as county's landmark Sh87b suit kicks off

Kenya: The High Court in Kericho has started hearing the landmark Sh87 billion suit filed by Governor Paul Chepkwony against Kenya Tea Development Agency (KTDA) and other players in the tea industry.

The Council of Governors, through Senior Counsel Tom Ojienda, asked to be enjoined in the constitutional petition filed at the court late last year by Chepkwony's advocate Peter Wanyama.

Prof Ojienda told the packed court he would also be representing 10,000 small-scale tea farmers in the petition. Kericho Resident Judge Hedwig Ong'udi ordered Chepkwony to serve the respondents and interested parties with the petition and documents within 14 days.

Advocate Alice Bett, who represents a section of the KTDA-managed factories, had told the court they had not been served with the suit papers. The court also ordered the Agriculture Food and Fisheries Authority (Affa), the 28th respondent in the case, to serve the petitioners with the Tea Industry Status report of May 2014 within seven days.

"Further, any intended applications should be filed and served within seven days and the responses filed thereto. The said applications, if filed, will be dealt with on the said date," said Justice Ong'udi. The mention of the status of the court orders compliance was set for March 23.

In the precedent-setting suit, Prof Chepkwony wants the High Court to compel KTDA to refund farmers in Bomet and Kericho counties, the double charges for management services.

Subsidiary firms

Seven subsidiary firms owned by KTDA, among them the Kenya Tea Packers (Ketepa), Majani Insurance Brokers and the KTDA Power company are also named among the 15 respondents in the suit.

Multinational tea companies Unilever (Kenya) Limited and James Finlay (Kenya) Limited, have been named as the 8th and 10th respondents in the suit. They are represented in court by Ahmmed Yassin Jelle of Kaplan and Stratton Advocates.

The governor is also asking the court to order the first seven respondents in the case to produce statements of the published financial reports capturing all their operations since they were formed.

"The respondents should prepare and publish detailed reports on the expenditures of the various taxes collected from tea farmers since 2001," Chepkwony says.

State corporation

The governor also pleads with the court to order the Privatisation Commission to investigate and make available a report on the entire privatisation transactions that led to the conversion of Kenya Tea Development Authority, which was a state corporation, into Kenya Tea Development Agency Limited.

The governor is also seeking orders to declare levying of agricultural produce cess by Kenya Tea Development Agency and Agriculture Fisheries and Food Authority without supporting legal framework as required by Article 210(1) of the Constitution as unconstitutional.