Move audit report case to Kericho, tea farmers urge court

A group of tea farmers want a case filed by Kenya Tea Development Agency (KTDA) seeking to quash implementation of a damning audit report moved to Kericho, where a similar suit is ongoing.

The farmers, through lawyer Peter Wanyama, moved to court seeking to be enjoined in the case where KTDA is challenging a report commissioned by the Competition Authority to review the status of the sector.

Last year, the Competition Authority appointed audit firm Deloitte to study the competitiveness of the tea sector value chain following a report by the tea board accusing major players of colluding to fix prices, hurting millions of farmers.

KTDA, in a certificate of urgency, wanted the Competition Authority to be forced to quash the report on tea marketing, claiming that it paints the company as an entity that has lost focus in managing farmers’ interests. 

KTDA, which represents small-scale farmers, filed the suit in a bid to stave off punitive action from the CAK arising from Deloitte’s recommendations.

But Mr Wanyama told Justice Weldon Kirui that the report is part of the case before the Kericho court and hearing the case in Nairobi would amount to abuse of the court process.

“KTDA has filed a case in Nairobi seeking to quash the report, yet they have another case in Kericho. Farmers seek to be enjoined in this case. Our argument is that everything that is going on here must be referred to Kericho so that there is only one case on this matter,” the lawyer said.

But KTDA, through lawyer Anthony Maruti, objected to the inclusion of farmers in the case, saying they do not have any stake in the matter.

“My client is the one that will be grossly affected if this report is implemented. That is why we want it quashed and therefore our submissions should be allowed as a matter of urgency,” he said.

NO PROBLEM

The Competition Authority, which had been given up to Saturday to submit its response, said it had no objection to farmers being enjoined in the case. But it asked for more time as the lawyer representing it said the summons arrived a day before the hearing.

Justice Kirui will make a ruling tomorrow on whether the farmers should take part in the case, when all parties involved are expected to file submissions.

The report commissioned by the Competition Authority and titled: Benchmarking/market inquiry for the tea sector in Kenya, was prepared by Deloitte Consulting Ltd. But KTDA says it is inconsistent with the rules of natural justice and unconstitutional.

It argues that the findings and recommendations of the report will inflict grave prejudice and disrupt the tea industry in Kenya as the loss that will arise from its implementation cannot be remedied.

The KTDA management wants the court to issue orders stopping implementation of the report as a matter of urgency.

It is further seeking orders compelling the Competition Authority from entertaining any material, information or comment from the report, which it says is contrary to the Constitution of Kenya and the Competition Act 2010.

KTDA also seeks to have the Authority adhere to provisions of the Competition Act when carrying out market survey or inquiry with regard to the tea sector.

“The contents, observations and findings of the report have been made without giving the applicant a reasonable opportunity of being heard, contrary to provisions of the Competition Act 2010 and the Constitution.

“The respondent has, therefore, acted in violation of the Constitution by abdicating its statutory obligations and mandate to a third party, thereby rendering the attempt to adopt the report as a statutory market inquiry illegal,” the company argues.

It accuses the Competition Authority of acting unreasonably and in bad faith, thereby perpetrating an oppressive interference with its rights, adding that it is only fair that the court hears the application urgently and proceeds to grant prohibiting orders.