High Court freezes leasing of troubled Mumias Sugar Company

The High Court has suspended the leasing of Mumias Sugar Company to a Ugandan firm after one of the bidders moved to the corridors of justice challenging the process.

Tumaz and Tumaz, a company associated with businessman Julius Mwale secured an injunction restricting leasing of the ailing miller to Sarrai Group, which was announced the winner with the court granting the firm its plea.

In its submission to the court, Javier Georgiadis and Sylvester Law LPP representing Tumaz, had requested the court to quash the decision of the receiver manager awarding the leasing contract to Sarrai on December 22, 2021.

Tumaz and Tumaz had requested a stay order against the first respondent (receiver manager Ramana Rao), his servants, agents, principal and employees from executing any lease agreement or contract in respect to the leasing and operation of the assets of Mumias Sugar Company Limited.

“As to whether the leave should apply as a stay, on the material before court, it is clear that if a contract is entered into as apprehended, the proceedings herein would be rendered nugatory. On that basis, I grant stay in terms of prayer five of the chamber summons,” said Justice Anthony Ndung’u.

Justice Ndung’u, sitting at the Milimani High Court on Wednesday certified the application as urgent and ordered the receiver manager not to proceed with the lease award to the Ugandan operator. The hearing will be on January 21 next year.

Tumaz, which placed the highest bid of Sh27 billion for a 20 year lease, argues that the process was not transparent and was marred with illegalities.

Lawyers also asked the court to compel the KCB receiver manager to undertake a fresh bidding process in respect to the leasing and operation of the assets of Mumias sugar.

In the court application, Tumaz argued that the tendering process was fraudulent and marred with illegalities.

“The first respondent failed to give all the bidders an open and transparent opportunity at winning the bid, thus compromising the integrity, fairness, transparency and accountability of the process in violation of the Constitution of Kenya and other laws of the land,” said Tumaz  in court papers.