High Court has suspended the decision to cancel the contract given to Sarrai Group, a Ugunda based firm, to run the troubled Mumias Sugar Company for 20 years.
Justice Dorah Chepkwony ruled in favour of Sarrai that had moved back to court claiming that it was condemned before being heard over the revocation of the 20-year lease.
Sarrai argued that Justice Alfred Mabeya, who cancelled the lease and ordered them out of Mumias Sugar premises immediately, granted an order which was never sought.
In that ruling made on April 14, Justice Mabeya also revoked the appointment of KCB receiver-manager PVR Rao as the administrator of Mumias Sugar.
“Pending the hearing and determination of this application inter-partes, a stay of execution and enforcement of the order…revoking, cancelling and nullifying the lease issued to the applicant and directing the applicant to forthwith vacate the premises of Mumias be and is hereby granted,” Justice Chepkwony ruled.
Sarrai Group lease was revoked after lawyer Jackline Kimeto, who is demanding Sh76 million from Mumias, argued that the receiver manager (Mr Rao) acted against the best interest of the company.
“The court subsequently issued the order revoking, cancelling and nullifying the lease granted to the applicant, condemning it unheard and thus sealing its fate contrary to the rules of natural justice and fair hearing,” Sarrai’s lawyer Wesley Gichaba said.
Gichaba also argued that Sarrai wants to file an appeal which will be rendered void useless if the order is not suspended.
But Mr Rakesh Kumar, a manager at Sarrai Group said in an affidavit that the applicant risks suffering a substantial loss of investment if the court fails to intervene.
“Unless this court urgently intervenes, the applicant stands to suffer substantial loss of the investment of Sh5.6 billion,” Mr Kumarsaid.
Kenyan Business Feed is the top Kenyan Business Blog. We share news from Kenya and across the region. To contact us with any alert, please email us to [email protected]
