CORRIDORS OF JUSTICE

High court awards KTDA Sh53 millions in delayed payment

The ruling is a win for over 60,000 smallholder tea farmers across the country as it sets a clear precedent against such breaches

In Summary
  • The tea agency had, on March 2009, filed a suit against Victory Tea Brokers demanding Sh73.05 million
  • The broker paid the agency  Sh20 million 
Workers pick tea leaves at a plantation in Nandi Hills. The government has pledged to deal with falling prices. Photo/Reuters
Workers pick tea leaves at a plantation in Nandi Hills. The government has pledged to deal with falling prices. Photo/Reuters

The High Court yesterday awarded the Kenya Tea Development Agency Ltd (KTDA) Sh53 million in delayed payments owed to it by the tea brokerage firm, Victoria Tea Brokers.

The tea agency had, on March 2009, filed a suit against Victory Tea Brokers in a bid to recover $923,385.69 (Sh73.05 million) at an exchange rate of Sh79.12 per dollar after the tea broker failed to honour a tea brokerage agreement.  

The amount comprised of net proceeds from the sale of made tea from Litein, Kapset, Kiru, Momul and Kapkoros Tea Factories which were not remitted to KTDA’s accounts by Victory Tea Brokers as agreed.

In his ruling, Judge Patrick Otieno said that Victory Tea Brokers, on the other hand, admitted to owing the debt and that its defense comprised of mere allegations that were not supported by any evidence.

The ruling is a win for over 60,000 smallholder tea farmers across the country as it sets a clear precedent against such breaches and safeguards the interests of smallholder farmers across the country against rogue firms.

KTDA-member tea factories have tea brokerage arrangements with firms to sell their tea to the highest bidder, on their behalf, at the Mombasa auction at a fee. In return, the brokerage firms are supposed to remit sale proceeds to KTDA for onward forwarding to the factories.