SECTIONS

Court allows county case on Mumias Sugar lease to go to full hearing

The High Court on Friday allowed a case filed by Kakamega County Government against both Mumias Sugar Receiver Manager PVR Rao and Tumaz and Tumaz Enterprises Ltd to go to full hearing.

Justice William Musyoka said the petition filed by lawyers James Orengo and Victor Osango will go on against the wish of lawyer Nelson Havi who is representing Tumaz and Tumaz Enterprises Ltd.

Havi wanted the case struck out, arguing that the county government had no shares in Mumias Sugar, lacked the jurisdiction to interfere with the leasing of the miller and that the case would result in conflict since another suit involving the leasing was being heard in Nairobi.

The county government filed the lawsuit on January 10 against the defendants to stop interfering with Sarrai Group lease for Mumias, arguing it will lose revenue if the court did not intervene.

Tumaz and Tumaz Enterprises which bid Sh27.6 billion vs Sarai Group's Sh11.5 billion obtained orders from the judicial review of the High Court in Nairobi on December 29, suspending the lease.

It argued that the bidding process was marred by fraud, mistakes and illegalities.

The Mumias lease suspension by the High Court in Nairobi remains in place until Justice Anthony Ndung'u rules on March 3.

A separate case filed by Mumias cane farmers and other bidders last month was heard by Justice Wilfrida Okwany at Milimani Court in Nairobi.

The judge suspended Mumias lease until March 14 to allow the parties to be enjoined in the suit.

The farmers claimed the bidding process was opaque and the lease was awarded to the lowest bidder, Sarai Group, for Sh5.8 billion without regulatory approvals.

Competition Authority of Kenya, in its submission in the farmers’ case, said it had not received any documents for approvals from either Sarrai or Rao.

Later, more cases were filed against Mumias Sugar receiver manager and Sarrai Group by creditors and employees of the firm seeking to reverse the lease award.