Court of Appeal overturns High Court ruling on West Kenya Sugar’s appeal against Butali Sugar Mills
KENYA – The Court of Appeal in Nairobi has overturned a High Court ruling in a case involving West Kenya Sugar Company Ltd’s appeal against the Agriculture and Food Authority’s (AFA) decision to register Butali Sugar Mills Limited as a sugar mill operator.
In a ruling dated March 21, 2024, the appellate court stated that it found no basis for liability between West Kenya Sugar and AFA.
The court set aside the High Court’s previous judgment and ruled that the second respondent be awarded Kes 18,267,438.70 (US$141K), with interest accruing at court rates from the date of filing until full payment.
West Kenya Sugar had initially approached the High Court seeking to quash the Certificate of Registration issued to Butali Sugar Mills on April 13, 2005.
The company also sought an order prohibiting AFA from entertaining or granting any fresh applications from Butali Sugar Mills to construct or operate a sugar mill within the West Kenya Zone.
The basis of the appeal stemmed from an undertaking issued on September 23, 2004, by the Chief Executive Officer of AFA, assuring West Kenya Sugar that no other miller would be registered to operate within a 24-kilometer radius of its plant.
The dispute originated from a Judicial Review application—Nairobi High Court Civil Miscellaneous Application No. 1127 of 2005—filed by West Kenya Sugar against the Kenya Sugar Board, the Ministry of Agriculture, and Butali Sugar Mills.
Meanwhile, tensions in the sugar sector have escalated, with milling operations at Mumias Sugar coming to a halt in February after local leaders and farmers stormed the factory.
The protests were sparked by opposition to the takeover of the ethanol distillery and co-generation (co-gen) plants by West Kenya Sugar Company.
The disruption followed KCB Bank’s decision to allow Jaswant to manage the distillery and co-gen plants at the factory after placing Mumias Sugar under receivership.
In the bidding process for the two plants, West Kenya Sugar placed a Kes 150 million (US$1.16M) per month bid, significantly higher than Sarrai’s offer of Kes 20 million (US$154K).
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