High Court stops KTDA elections

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The High Court has issued an order temporarily stopping Kenya Tea Development Agency (KTDA) from conducting nominations and elections of tea factory directors.

Justice Njoki Mwangi issued the orders pending hearing and determination of an application by Attorney General Kihara Kariuki.

The AG wants the elections, which are pursuant to shareholders’ notification issued by KTDA (management services) Ltd , stopped pending hearing and determination of his cross petition against one filed by the East African Tea Trade Association (EATTA).

Justice Mwangi, sitting at the High Court in Mombasa, further ordered the application by the AG to be heard on November 10.

Through litigation counsel Nguyo Wachira, the AG argues that conducting the elections will render the Crops (Tea Industry) Regulations 2020 irrelevant and the process a mockery of the law and embarrass the trial of the petition.

“Proceeding with the proposed elections will amount to an act of impunity, would be contemptuous, contrary to public interest, the dictates of the rule of law, good governance and gross abuse of the court process,” argues Mr Wachira.

Mr Wachira also argues that KTDA (MS) Ltd have commenced and are in the process of conducting directors’ nominations leading to elections as advertised which may be concluded within the next few weeks leading to his cross petition being rendered obsolete.

The AG further says that the Crops (Tea Industry) Regulations 2020 have been recently discussed in parliament for approval and are in jeopardy since they seek to change the way elections of directors in the tea farming sector are conducted.

He argues that they are aggrieved with KTDA agents and affiliates to start elections during the pendency of the petition.

“Unless the court grants the conservatory orders, the tea sector will thrust in confusion which may never be recovered soon,” argues the AG.

He says that the provisions relating to the upholding of proper governance of tea factory companies’ directorship, management and running has been ignored by the election notice.

The AG also argues that before the tea regulations, there have been guidelines to oversee the nomination and election of directors for the smallholder tea subsector leading to poor corporate governance practices.

“These new tea regulations have clauses to address the conflict of interest that exist when a director sits in the board of management agent and also in the board of the tea factory,” said the AG.

He says the move to call elections by KTDA is meant to defeat the provisions in the regulations which are geared towards removing the existing conflict of interest.

Kenya Tea Development Agency Holdings wants the application by the AG dismissed.

Through its Company Secretary Dr John Omanga, KTDA argues that a similar application had been filed at the High Court in Nairobi where it was dismissed.

“I have read the instant application filed by the AG, save for cosmetic changes on semantics, it is a replica or similar to the previous application (at the High Court in Nairobi),” says Dr Omanga in his affidavit.

Dr Omanga further says that the determination of the application in Nairobi renders the one by the AG res judicata (matter that has been heard and determined by a competent court) so as to divest the court of jurisdiction to entertain it.

He also says that the filing of the AG’s application at the High Court in Mombasa as opposed to the Nairobi’s petition was a deliberate calculated step to avoid or circumvent the binding decision of the same court in the previous application over the same issue.

“Nothing would have stopped the AG from instituting this instant application in the Nairobi petition whereas in any event, KTDA is a substantive party,” says Dr Omanga.

According to KTDA, the AG and Cabinet Secretary for Agriculture are on a mission of vexing it with issues which a competent court of law has found to be without merit.

It further says that they (AG and CS) are in breach of the doctrine that litigation must come to an end and that they are asking in disguise that the court sit as an appellate court over findings made by a court of concurrent jurisdiction.

Dr Omanga says that KTDA Management Services Ltd is an independent liability company whose shareholder is KTDA.

“KTDA MS is not and has never been an agent of the interested party (KTDA),” says Dr Omanga adding that the affairs of KTDA and KTDA MS are independent of each other and neither is an agent of the other.

He further states that KTDA MS is a managing agent of 54 small scale tea factory companies in the country and not KTDA.