A judge has stopped the state from demanding additional levy from tea farmers.
High Court Judge Anthony Mrima on Monday gave a temporary order pending determination of a case filed by Kenya Tea Growers Association challenging some sections of recently passed Tea Act.
The association is challenging Sections 36, 48 and 53 of the Tea Act 2020 on grounds that they were illegally inserted by Parliament without considering the plight of tea farmers.
The law being challenged allows the exclusive sale of tea at the tea auction and imposes additional levies.
The court was told that the introduction of the tea levy violates the rights of the farmers, and it puts them at a distinct disadvantage with respect to their counterparts in the East African Community market at the tea auction.
The farmers claim the said provisions will increase taxes and drive them out of business.
The association, which has brought the case to court, says its members have various direct contracts with tea buyers from Central Africa, the United Arab Emirates, Russia, Europe and Asia.
They say their contracts are for specific qualities and quantities for 2021 up to 2023.
Many of the direct contracts are in respect of bespoke and customised categories of teas which are not sold through the auction and which have been certified by different agencies such as Rainforest, Fairtrade and Ethical Tea Partnership.
These teas fetch a higher premium overseas.
The implementation of the law in question will result in the association members being unable to fulfil their contractual obligations.
They will lose the financial benefit of the direct/forward contracts which offer better and higher returns than auction prices.
In addition, the implementation of the law in question will give a competitive edge to other countries in the region that will be able to continue selling their teas directly.
Justice Mrima further suspended the implementation of the sections of law being challenged.
The case will be heard on February 22.
