The High Court in Nairobi has ordered billionaire industrialist Jaswant Rai to pay Butali Sugar Limited Ksh500 million for damages, ending a 15-year court battle between the two rivals.
Rai's firm, West Kenya Sugar Company, had opposed the registration of Butali, which it claimed was within a 24-kilometre radius of its operation. The claim was, however, disputed by Butali, who sued its competitor, seeking Ksh500 million in compensation.
In a ruling delivered on Friday by Commercial Judge Alfred Mabeya, Butali Sugar Limited had proved beyond reasonable doubt that Rai's firm had interfered with its operations, causing the company to suffer losses worth millions.
"Accordingly, on the totality of the evidence on record, the plaintiff (Butali) has proved its case on a balance of probability. Judgment is entered for Butali against West Kenya Sugar Company for Ksh507 million. The company is entitled to indemnity against Kenya Sugar Board to the tune of 30 per cent on the damages," read part of Mabeya's ruling.
"The sum of Ksh507 million shall attract interest at the rate of 12 per cent per annum from the data of the suit until payment in full. Butali will have the costs of the suit."
The legal suit began after Rai's firm challenged the registration of Butali's operations in 2007. West Kenya also obtained orders from the High Court to halt any operations from the Butali Sugar Company pending the determination of the case.
Rai's firm, however, withdrew the case a year later after they reached an agreement with Kenya Sugar Board not to grant a licence to Butali or any other miller that will operate within a 24-kilometre radius of the company.
According to West Kenya, it had invested billions into expanding its operations as per the agreement with the Kenya Sugar Board.
The decision prompted Butali to file a suit for damages against the board and Rai's firm.
Butali also filed a suit in the High Court in Kisumu and obtained orders compelling Kenya Sugar Board to issue it with a licence.
This was, however, challenged by West Kenya, which sought to prevent the registration from taking place.
The court ruling follows Rai's decision to withdraw all cases challenging the lease of Mumias Sugar Company.
On Thursday, his company filed three notices of withdrawal at the Court of Appeal to terminate their petitions, challenging the revival of Mumias Sugar Company.
His decision was attributed to President William Ruto threatening to take action against cartels accused of exploiting cane farmers in Western Kenya.
