SUGAR LEASE

Vihiga court sets aside order on Mumias lease stalemate

This is after Tumaz and Tumaz Enterprises said there was pending order stopping Sarrai

In Summary
  • Justice William Musyoka issued orders against Tumaz which gave Sarrai the green light to proceed with their work at the sugar mill.
  • In his ruling, Musyoka said he had been informed that there was an order dated December 29, 2021, between Sarrai and Tumaz which put a stay on the lease agreement.
Mumias Sugar Company entrance.
FILE Mumias Sugar Company entrance.
Image: HILTON OTENYO

A Vihiga court has set aside its order issued on Tuesday allowing Ugandan firm Sarrai Group to proceed with works at Mumias Sugar Company.

This is after Tumaz and Tumaz Enterprises brought to the attention of the court that there was a pending order issued by High Court in Nairobi that stopped Sarrai from going on with works at the sugar mill.

Kakamega county had moved to court last week seeking to stop Tumaz from interfering with the works of Sarrai and Mumias Sugar Company.

Justice William Musyoka issued orders against Tumaz, which gave Sarrai the green light to proceed with their works at the sugar mill.

However, the court has set the orders aside after it was informed that there was an order in Nairobi relating to the same issued earlier.

In his ruling, Judge Musyoka said he had been informed that there was an order dated December 29, 2021, between Sarrai and Tumaz which put a stay on the lease agreement.

“The order of stay in Nairobi HCJR/E178/2021 was not exhibited to the motion by Kakamega County Government when it was placed before me on January 11, 2022, yet the same was relevant to the extent that it related to the same lease that is the subject of the motion” the order reads.

Judge Musyoka further said the order should have been disclosed by the county, and since it cannot possibly be in operation at the time with the order that he made, and to avoid duplication of orders, he therefore vacated his orders.

On Monday, a day before the Vihiga court issued the orders, the court had directed Tumaz to serve Sarrai Group directors and Mumias Sugar with a contempt of court application they have filed against them.

In the case, Tumaz is seeking a jail term for Sarrai Group (Sarrai) directors and Mumias Sugar receiver manager PVR Rao for contempt of court.

Justice Antony Ndung’u further directed that the application by Sarrai Group, seeking to set aside the orders of status quo will be heard on January 22.

In December last year, the court suspended leases that were issued to Sarrai and Rao which stopped them from going on with works at the sugar milling company.

The court has cautioned parties in the case from disobeying the court orders issued last year.

"The orders are there, anyone who disobeys does it at their own peril. That is continuous contempt," court said.

Tumaz have accused Sarrai Group of contempt of court, claiming the works are ongoing despite a court orders barring them from doing so.

At the same time, Sarrai also filed an application seeking to have the order suspending the lease lifted.

Tumaz and Tumaz Enterprises claims to have placed the highest bid of Sh27.6 billion against Sarrai's alleged Sh11.5 billion for Mumias lease.

Last week, Justice Jairus Ngaah had directed the parties to appear for a hearing of the case on Monday.

Justice Ngaah had ruled that the matter should be heard by judge Ndung’u who issued the order suspending the lease.

Tumaz, a firm owned by Mwale City investor Julius Mwale, told the court that Sarrai Group had started work at the sugar milling plant despite the existence of a court order barring them from doing so.

The court heard that the orders were served to both Sarrai and Rao on December 30 and 31, 2021.

Sarrai, which is linked to the Rai family, has been carrying out a series of activities at the Mumias firm, including meeting Kenya Power officials to have electricity restored at the facility, the court was told.

Sarrai is also alleged to have had a meeting with the engineers at the firm to deliberate on ways of reviving the sugar milling plant. 

Earlier in the week, Sarrai manager presented evidence in court showing machinery and tractors ploughing Mumias nucleus estate.

 

(edited by Amol Awuor)