High Court Paves Way For KTDA-Managed Factories to Hold Elections

54 Tea Factory Companies that are the shareholders, and owners, of the Kenya Tea Development Agency (KTDA) Holdings Limited can now proceed and hold factory directors’ elections after the High Court in Nairobi on Thursday dismissed a petition filed jointly by the Ministry of Agriculture, Agriculture Cabinet Secretary Peter Munya and the Agriculture, Fisheries and Food Authority (AFFA) which had sought orders to suspend the elections.

In the application, AFFA sought to have the annual Tea Factory Company Directors’ elections suspended, arguing that, with the Tea Regulations of 2020 having been suspended by a High Court in Mombasa – and pending the hearing and determination of two other cases against the regulations, there lacked a legal framework under which the elections would be conducted.

Appearing for AFFA, lawyer Gitobu Imanyara argued that the elections could not be held under the old regulations, adding that the now-suspended regulations of 2020 superseded the old rules.

He argued that the constitution of Kenya provides for a presidential system of Government, thus allowing executive powers to be exercised through the president or those that he has delegated to carry out certain functions. In doing so, he argued that the CS and Ministry of Agriculture had gazetted the regulations lawfully.

Appearing for KTDA Holdings and KTDA Management Services, lawyer Benson Millimo argued that KTDA Holdings is a private limited liability entity whose shareholders are the 54 tea factory companies.

He further averred that the 54 Tea Factory Companies are private limited liability companies whose membership and tenure of their Board of Directors thereof is purely an internal management affair which is guided by their respective companies’ articles of association.

He dismissed the view held by the AFFA that there lacked a legal framework under which the factories can hold their elections; arguing that Factory Directors’ elections are an annual statutory process under the Companies Act, under which the factory companies have been undertaking the elections. He argued that AFFA had no mandate to try and stop the elections since it was not a shareholder in any of the Tea Factory Companies.

Appearing for the 54 Tea Factory Companies, Senior Counsel Fred Ngatia held that the factories were registered private limited liability companies under the Companies Act; and which were entitled to the rights pertinent to such registration.  

In dismissing AFFA’s petition, Judge Anthony Mrima held that the interest of the over 600,000 smallholder tea farmers that own KTDA Holdings, militates against  the petition; adding that since the factories had been carrying out elections as provided for in their respective Articles of Memorandum of Association.

“It is only but prudent that such practice is maintained pending the outcome of the main petition… the petitioners are among the key, if not the main, stakeholders in the tea sector,” ruled Justice Mrima.

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