The Court of Appeal has temporarily upheld the High Court ruling dated April 14, 2022, that locked out Sarrai Group from Mumias Sugar Company.
In their ruling on Friday, September 23, three appellate court judges said the applicants had demonstrated an appeal which will be rendered nugatory if the execution is not stayed during the hearing of the case.
“In the upshot, the notice of motion dated 27th April 2022 is allowed to the extent only that there will be a stay of execution of the ruling dated 14th April 2022,” the judges ruled.
In the April ruling, the High Court judge Justice Alfred Mabeya in Nairobi cancelled Sarrai lease to operate Mumias Sugar Company, ordered it to leave the premises and removed Ponangipali Venkata Ramana Rao as the Administrator of the company.
Mabeya further appointed Kereto Marima as the new administrator of Mumias Sugar Company and ordered Rao to hand over the company to Marima.
“This court has considered the allegations made against the leasing process. Rao awarded the lease to the lowest bidder (Sarrai Group) while there were higher bidders, without giving any justifiable explanation,” the judge ruled.
On Friday, Sarrai told the court that the lease revocation had far-reaching economic and social consequences for several people in the western region.
Lawyer Jackline Kimeto, who is also a creditor, however, opposed the application saying Sarrai had not approached the court with clean hands.
Kimeto argued that the Ugandan firm had all along deliberately failed to comply with several court orders and that granting the prayers sought would be used as a shield to perpetuate disobedience of court orders.
She said suspending the decision and allowing Sarrai to re-enter the premises of Mumias and continue with activities based on a nullified lease poses more irreparable harm.
The ruling by the appellate court means that the Ugandan firm Sarrai cannot perform any activities at the factory until the case is fully heard and determined.