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Court issues warning in Mumias Sugar lease row

By Kamau Muthoni | Jan 11th 2022 | 3 min read
By Kamau Muthoni | January 11th 2022

In the case, Tumaz which is associated with businessman Julius Mwale accused Rao of carrying out a secretive bidding process. [Mumo Munuve, Standard]

The High Court has warned parties involved in battle over the takeover of Mumias Sugar Company against disobeying lease freeze orders.

Justice Anthony Ndung’u, in his directions, asserted that the orders of the court are still in force and anyone who does not obey will face the wrath of the court.

“The orders are there. Anyone who disobeys does it at their own peril. If they continue, that is continuous contempt,” cautioned Justice Ndung’u.

The judge issued the warning after Sarrai Group lawyer Wesley Gichaba expressed difficulty of his client obeying the orders obtained by Tumaz and Tumaz Enterprises Limited, arguing that the orders were issued seven days after the former had taken over Mumias.

“What the orders the court sought to prohibit had already happened and cannot stop the train. That is my predicament,” argued Gichaba.

George Kashindi, the lawyer representing Mumias receiver-manager Ponangipalli Venkata Ramana Rao, took a similar position as Sarrai’s lawyer adding that Mumias creditors will suffer losses.

“The status is that the train has moved. We do not have instructions to accept any status quo that is prejudicial to the parties. There are a lot of creditors in this and there will be a lot prejudice,” said Kashindi.

The judge had asked the two lawyers to let their clients allow the court expedite the case. 

Gichaba and Kashindi asked the judge to hear their separate objections first, arguing that the court had no powers to hear Tumaz case. 

In its reply, Tumaz lawyers Javier Munzala, Maureen Nasimiyu, Georgiadis Majimbo opposed the plea and asked the judge to hear their application for contempt alongside the objections raised.

Kashindi was of the view that a commercial court judge Alfred Mabeya had already placed Mumias under administration and therefore no case could be filed without the concurrence of the administrator or the court agreeing to it.

“We have filed a certificate of urgency raising fundamental jurisdictional issues. In short, we are saying this court lacks jurisdiction to entertain these proceedings. There is an administration order which was granted by Justice Mabeya that placed Mumias on administration. When a company is under administration, there cannot be proceedings on that company without the consent of the administration or leave from the court,” he argued.

On the other, Tumaz lawyers that their case was not against Mumias.

“We need to have the contempt application heard first... Mumias is not a party in these proceedings and on that ground, his application fails. We pray the application for contempt and jurisdiction be heard together,” Nasimiyu argued.

In the case, Tumaz which is associated with businessman Julius Mwale accused Rao of carrying out a secretive bidding process.

Court filings show Tumaz had bid Sh27.6 billion for the lease, France company Kruman- Finance bid Sh19 billion while Sarrai offered Sh11.5 billion for a similar number of years. 

Sarrai, however, clinched the 20-year lucrative deal.

Justice Ndung’u will hear all applications on January 24.

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