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Regulators free to issue Butali Sugar permit as West Kenya suit dismissed

Posted in Sugar & Related

KENYA - The High Court has allowed industry regulators to issue Butali Sugar Mills with an operating licence after dismissing a suit filed by rival West Kenya Sugar Company, ending a proximity dispute between the two firms.

Justice George Odunga ruled that stopping Butali from obtaining an operating licence from the Agriculture, Fisheries and Food Authority (AFFA) and the Ministry of Agriculture, Livestock and Fisheries would be a direct attack on the industry which has for ages been the country’s backbone.

West Kenya filed the suit last year arguing that Butali’s factory had been built just 10 kilometres away from it, in violation of industry guidelines that provide for at least 40 kilometres between two sugar millers.

 “To grant the orders sought herein will in my view bring the economy of this great nation to its knees literally, that decision would crush the backbone of Kenya’s economy thus incapacitating the country and rendering it frail, that, cannot be the intention of any judiciary worth its name,” Justice Odunga said.

West Kenya moved to court last year after Deputy President William Ruto announced that its rival-Butali-would be issued with an operating licence.

Cane poaching

The 40-kilometre proximity rule was introduced to curb cane poaching, a practice in which one factory illegally acquires sugarcane from farmers contracted to its rival.

West Kenya also argued that AFFA had no authority to consider Butali’s application for a licence, as its board of directors is yet to be fully constituted.

Justice Odunga’s ruling has granted reprieve to hundreds of workers at the Sh3 billion Butali Sugar Mills, whose fate had been put in the balance by West Kenya’s suit.

The judge has also asked the two feuding sugar millers to co-exist, arguing that farmers are paying the price for their unending dispute.

 “Parties ought not to hog the judicial process by instituting a multiplicity of suits one after another thus denying other litigants the opportunity to have their grievances addressed,” the judge added.

A meeting of industry players held in Kakamega last year had resolved that West Kenya and Butali would co-exist to boost competition.

November 11, 2015; http://www.businessdailyafrica.com/Regulators-free-to-issue-Butali-Sugar-permit-as-suit-dismissed/-/539546/2949668/-/hmrtxr/-/index.html