The High Court in Nairobi court awarded KTDA Sh53M in a breach of contract ruling against Victoria Tea Brokers.
The landmark ruling sets precedence against breach of the contract thus safeguarding the interests of smallholder farmers while holding rogue firms accountable.
The monies account for delayed payments, costs, and accrued payments that the agency sought to recover in a suit filed in March 2009.
KTDA member tea factories sign tea brokerage contracts with firms to sell their tea to the highest bidder, on their behalf, at the Mombasa auction at a fee. Once the sale is made, the firm should give the sales proceed to KTDA for remittance to the member factories.
Victoria Tea Brokers had failed to remit net proceeds from the sale of made tea from Litein, Kapset, Kiru, Momul, and Kapkoros Tea factories amounting to USD 923385.69 (Sh73058275.79 at the conversion rate of USD1=SH79.12 as at February 2009).
In the ruling, Judge Patrick Otieno found Victoria Brokers to be in breach of the Tea Brokerage Agreement between itself and KTDA. In addition, KTDA had proved that Victoria Brokers owed the said amount and that KTDA had received Sh20M from a corporate guarantee thus leaving the sum of sh53M.
