Court declines to stop sale of five western Kenya sugar firms

Court rules all efforts of resolving the dispute have not been exhausted.

Sugar cane delivery at Nzoia Sugar Company in Bungoma County. Plans to privatise five sugar companies in western Kenya could go on after the High Court termed the bid to halt the proposal as premature. 

IN SUMMARY

  • Nzoia, Chemelil, South Nyanza, Muhoroni and Miwani sugar companies have been targeted for privatisation.
  • Former Gem MP Jakoyo Midiwo and the Council of Governors had separately moved to court in 2016 and challenged the privatisation plans.
  • The governors’ council on its part argued that the matter directly involves devolution of agriculture.

Plans to privatise five sugar companies in western Kenya could go on after the High Court termed the bid to halt the proposal as premature.

While declining to permanently block plans spearheaded by the Privatisation Commission, Justice Edward Muriithi ruled that talks between county and national governments have not been fully exhausted.

The judge issued the decision in a case which had sought to stop plans to privatise Nzoia, Chemelil, South Nyanza, Muhoroni and Miwani sugar companies.

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Justice Enoch Chacha Mwita read the judgment on behalf of Justice Muriithi.

“The eventuality contemplated by Section 35 of the Intergovernmental Relations Act, 2012 has not crystallised because all efforts of resolving the dispute have not been exhausted and failed,” said Justice Muriithi.

OPPOSED PLANS

Kisumu Governor Anyang Nyong’o, former Gem MP Jakoyo Midiwo and the Council of Governors had separately moved to court in 2016 and challenged the privatisation plans.

But the judge faulted them for failing to consider that the structures of alternative dispute resolutions under the Intergovernmental Relations Act for remedying the situation manifested in the row about whose function it is between the national and county governments does the business of milling of sugar fall on.

However, the judge pointed out that the suit raised substantial issues for interpretation which are subject of the privatisation plans.

In the suit, the legislators wanted privatisation of the said sugar firms halted arguing that the Privatisation Commission had placed several advertisements in local newspapers on the issue yet its members were illegally in office.

UNRESOLVED ISSUES

The two had also accused the commission of failing to comply with the necessary procedure as per the Privatisation Act as well as other pending weighty unresolved issues raised by cane farmers.

They argued that in placing the March 11, 2016 advert, the commission blatantly ignored views submitted in relation to the privatisation of the said sugar firms.

They had told the court that at least four meetings were supposed to be held in a year yet the commission reportedly only had one, and had at the time four members instead of the required seven required to reach such a decision.

DEVOLUTION

The governors’ council on its part argued that the matter directly involves devolution of agriculture since sugar firms are based and built on land owned by county governments in trust on behalf of the local residents.

CoG also claimed that there is no mutual agreement between the two levels of government on the agricultural function of sugar milling and therefore wanted the national government barred from meddling in the matter.

In April 2016, Justice Odunga temporarily suspended the decision of the commission to call for expression of interest for those interested in investing in the said firms for about 60 days.

Following the latest court decision, the disputed privatisation process could take off as earlier scheduled with talks between the two levels of government on the issue.

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