BY SAM ALFAN .

The High Court has lifted an order blocking the government from importing 125,000 metric tonnes of cooking oil duty-free.

Justice John Chigiti lifted the order issued in June following a petition by the Law Society of Kenya, arguing that the move would disadvantage local manufacturers, among other reasons.

“The orders issued on 30th June, 2023 granting the Law Society of Kenya leave to institute Judicial Review proceedings, and the stay of the implementation of the Treasury’s letter dated 20th January, 2023 and Commissioner’s internal circular No. 7 dated 14th February, 2023 are hereby set aside,” ruled the Judge Chigiti.

The judge further struck out the application by the lawyers umbrella body and discharged all consequential orders.

The judge said the letter dated 20th January, 2023 to the Commissioner for Customs & Border control and a Departmental Circular No. 7 of 14th February 2023, which were used by LSK in the case were illegally obtained and expunged them from the record.

The judge observed that a court that admits and determines a dispute before it based on illegally obtained evidence is a court that acts without jurisdiction.

” This court finds that it lacks jurisdiction to determine a suit on the basis of illegally acquired documents,” ruled Judge Chigiti.

The Kenya National Trading corporation moved to court through Senior Counsel Ahmednasir Abdullahi and Dennis Mosota seeking to lift the order, arguing that the move might lead the government into losses.

Ahmednasir told the court that that the orders issued on 30th June, 2023 were made without jurisdiction, in violation of Section 9(2) of the Fair Administrative Action Act, 2015; hence null ab initio.

He submitted that LSK failed to disclose to the Court the material fact that available statutory mechanisms had not been exhausted.

Lawyer Mosota told judge Chigiti that the issues in dispute relate to importation of duty-free cooking oil, pursuant to provisions of paragraph 20 of Part II to the Fifth Schedule of the East Africa Community Customs Management Act, 2004 (EACCMA), which Act has a mandatory statutory review and appeal forums–through which KNTC could agitate its grievance at first instance.

Lawyer Mosota submitted that the order in place affect persons other than the parties to the proceedings and the lifting of stay orders will not result in any prejudice to KNTC or any other party involved. In fact, it is beneficial to the public by providing access to affordable goods.

“The risk of potential loss to the applicant greatly outweighs any perceived benefit from maintaining the stay orders,” court heard.

It was his argument that the stay orders do not meet the proportionality test as it subjects KNTC to undue hardship, irreparable harm owing to the risk of perishability of the imports and the colossal financial loss.

“Orders issued on 30th June, 2023 were null ab initio since they were issued by the court without jurisdiction to the extent that they were issued following material non-disclosure of the germane facts that KNTC had not exhausted the mandatory statutory dispute resolution mechanisms; hence prematurely invoking the Court’s jurisdiction,” lawyer Mosota told the court.

He said it is trite Law that where there is an alternative remedy and especially where Parliament has provided a statutory appeal procedure, it is only in exceptional circumstances that an order for judicial review would be granted.

“The perishable nature of the applicant’s goods, edible oil, results in a substantial risk of financial loss. Further, the applicant’s irrevocable Letters of Credit issued to suppliers pose an additional financial risk, strengthening the case for setting aside the orders,” lawyer Mosota told the court.

The court heard that the freeze orders do not serve the interests of justice it does not improve the Court’s quest to do justice to the parties when the final orders will be made as Kenya National Trading Corporation (KNTC) as it will never be able to recover the loss it has incurred as a result of the stay orders.

“The effect of this is that the exemption will be declared to be null ab initio and KNTC will be under obligation to pay the Commissioner for customs and border control the amount exempted. However, should the court find that the exemption was lawful, the Respondent/Applicant will not be able to recover the costs incurred from the storage and demurrage charges which are substantial,” said Ahmednasir.

BY SAM ALFAN.

The newly appointed administrator for Mumias Sugar Company Harveen Kumar Manoharlal Gadhoke has declined to take up the job a month after his appointment.

Gadhoke was appointed the administrator of the troubled miller by Justice Josephine Mong’are on July 31, following the expiry of Kereto Marima’s term.

But he says in an affidavit filed in court told that he is currently serving as administrator of several insolvent companies with multiple court cases pending before the High Court.

“As a result I am unable to take up my appointment as Mumias administrator and I respectfully decline my appointment as administrator,” said Kumar while declining the appointment by the court.

The insolvency practitioner further said told the court that he only became aware of his appointment after he was served with the order of 31 July 2023. 

“Prior to then, I was not aware of the intended appointment and I was not consulted before my appointment and I did not give my consent to the appointment,” says Gadhoke.

The High Court had directed him to compile an updated list of all debts of the miller.

The judge directed the administrator to file a list of all debts as at 31st July, 2023 and which must be filed in court within 42 days from the date of the ruling.

The judge further directed Gadhoke to conduct an asset count of all property and chattels of Mumias Sugar company ltd and develop an assets register to be shared with the court and the creditors of Mumias Sugar within two months.

Former administrator and KCB appointed receiver manager PVR Rao was directed to immediately handover the affairs of Mumias Sugar company including all books of account, documents, ledgers, leases, title deeds, log books and any other document or material of whatever nature concerning the affairs of Mumias Sugar to the newly appointed administrator, with immediate effect.

Rao was ordered to immediately give access to the new administrator and file a full, accurate and comprehensive report of all activities he has undertaken as court appointed administrator of Mumias Sugar since 19th November, 2021, for purposes of handover of the affairs to Gadhoke.

In the 15 page ruling, the commercial court judge directed inspector General of Police Japhet Koome, the county police commander of Kakamega County and OCS Mumias Police Station to provide armed escort and security to Gadhoke to enable him undertake the job.

Kimeto & Associates Advocates, a creditor moved to court seeking the court to appoint an interim administrator saying she was apprehensive that in the absence of duly appointed administrator, all the other creditors stand to suffer irreparable as they are left out of the receivership which is meant to aid KCB Bank to collect its debt secured by various charges and debentures over the assets of Mumias Sugar.

The court heard that without a proper administrator duly appointed by the court to oversee the affairs of Mumias Sugar, the resulting effect is a regretful scenario where there is no officer accountable to the court for overseeing an institution that is effectively under administration.

At the same time, West Kenya Sugar company and Jaswant Sign Rai have filed applications to withdraw the cases pending in court over the Mumias Sugar Company lease saga.

The notice was filed city lawyer Martin Gitonga information the court that West Kenya Sugar Company and the Rai are discontinuing with the case.

“TAKE NOTICE that West Kenya Sugar Company Limited and Jaswant Singh Rai, the 1 and 2nd Interested Parties/Applicants herein hereby wholly discontinue and withdraw their claim in this suit,” states the notice filed in court by west Kenya Sugar company and Jaswant Sign Rai lawyer Martin Gitonga.