Mumias Sugar Company blocked again from stopping Sh3b tussle under arbiter

By Isaiah Lucheli

KENYA: The High Court has dismissed a second bid by Mumias Sugar Company (MSC) to halt an arbitration process in which sugarcane farmers are seeking over Sh3.6 billion from the firm.

The farmers through Mumias Outgrowers Sugar Company moved to the High Court seeking the company to release the money, which they are claiming to be 15 per cent annual retention fund in its statement. The matter was moved to an arbitrator.

The farmers through lawyer Patrick Lutta asked High Court Judge Jackline Kamau to reject MSC application saying that the sugar maker was engaging in sideshows, which were intended to delay the hearing and determination of the depute.

In her ruling, the judge said the court did not have jurisdiction to entertain matters arising from an arbitration process and dismissed the attempt by the sugar factory to stay the arbitral proceedings pending an appeal.

Lutta told the court that the sugar company had earlier applied for the removal of the sole arbitrator Lawyer Ahmednasir Abdullahi on claims that he was not impartial in determining the depute, which was also dismissed by High Court Judge Eric Ogola.

The counsel while quoting the arbitration rules explained that they clearly stipulated the procedure for challenging an arbitrator and added that the rules had clear provisions of the requirement and duration for filing for removal of an arbitrator.

Proceedings

Mumias sugar through lawyer Kiragu Kimani, in a certificate of urgency, argued that unless a stay of proceedings was granted, the intended appeal would be rendered nugatory as the arbitral proceedings would continue.

In an earlier verdict, Judge Ogola had ruled that the application by MSC lacked mandatory procedural requirements under Section 14 of the Arbitration Act dismissed in its entirety.

The judge noted MSC had not opposed the arbitrator over his qualification but was hinged on its application on the contents of his ruling dated February 20, 2012.