Companies
Court suspends hearing of Tea Act
Friday January 19 2024
Lawyer Benson Millimo during the hearing on January 17, 2024, at Milimani Law Courts. PHOTO | FRANCIS NDERITU | NMG
The High Court has suspended the hearing of a petition challenging sections of the Tea Act and the directorship of the Kenya Tea Development Agency Holdings Ltd (KTDA), pending an appeal over the representation of the agency.
A Bench of three judges on Thursday put the hearing on hold for 90 days to allow the current directors of the KTDA pursue an appeal on the lawyers to represent them in the matter.
Read: Appeals court suspends hearing of anti-Tea Act petition
The court had in November ruled that the law firm of Millimo, Muthomi and Company Advocates was on record for KTDA Holdings.
“In light of the directorship disputes, this court finds it safer not to wade into the legitimacy of the termination and his capacity to swear the impugned Affidavit or not and we so hold,” the judges Hedwig Ong’udi, Jesse Nyagah and John Chigiti said in November last year.
However, the current leadership through senior counsel Paul Muite asked for the suspension of the case as they challenged the ruling at the Court of Appeal.
The judges allowed the application and froze the hearing for three months.
Other than the issue of directorship, the Bench will also determine several petitions including the takeover of KTDA by the government as well as cases challenging sections of the Tea Act, which players in the industry have argued will affect them negatively.
In the petitions which were consolidated, more than 15 companies under the Kenya Tea Growers Association and East African Tea Trade Association challenged sections of the Tea Act arguing that they were unconstitutional.
Among the sections targeted by the EATTA is section 34(4), which it said is silent on the percentage of payments to be borne by the tea buyers and tea factories to pay the brokerage commission. The section caps the brokerage fees but fails to indicate how the fees will be paid, according to EATTA.
The association wants the court to interpret and determine whether sections 5(l), 32(3)(b), 32(4), 34(3)(b), 34(4)(5)(6), 36(1),48 (1) and 53 of the Tea Act is constitutional. The enactment of Section 53 of the Act on the provision of tea levy, the association adds, shall be ultimately borne by the farmer or producer of tea.
The law, which came into effect on January 11, 2021, says all teas should be offered at the tea auction floor.
Also read: How tea reforms raised earnings for producers
The tea estates argue the sections challenged will have a negative effect on other tea sector players, particularly large-scale plantations, which have existing contracts for direct sales with overseas buyers.
The challenged sections were suspended pending the determination of the cases.
