Brookside Dairy, majority-owned by the Kenyatta Family, of which President Uhuru Kenyatta is a key member, is facing a fresh court fight with owners of Limuru Milk over a multimillion-shilling processing deal the former secured when it bought out Buzeki Dairy.
Limuru Dairy Farmers Co-operative Society were forced to go to the High Court to seek compensation of approximately Sh53 million after Brookside terminated the 10-year milk processing deal.
Justice Maureen Odera dismissed claims by the Uhuru firm that the arbitrator’s decision was in direct conflict with various laws and constitutional principles and that it was unfriendly to public policy.
In a bid to consolidate its grip on the Kenyan formal milk market, Brookside Dairy had secured a deal to own Limuru Milk for 10 years in 2014 in a deal that would pay see the dairy pay the owners of Limuru Fresh Milk brand Sh3.3 million in monthly fees for leasing their plant and continue to buy raw milk estimated at 200,000 litres daily from the at the time troubled co-operative society.
The pact was negotiated by Buzeki Dairy, which owned the Molo Milk brand before being bought out by Brookside Dairy “Brookside is running Limuru Dairy under the terms of the previous lease owned by Buzeki,” said Kiprotich Bundotich, managing director at Buzeki Enterprises—which sold the dairy arm and continues to run the logistic business.
Ms Jacqueline Hinga, Brookside Group Legal Officer, in her affidavit said after Brookside sent the termination notice to the cooperative, they, in turn, invited the firm to negotiate new terms with a view to reviewing the lease.
The new revised lease was a monthly rent of Sh650,000 for three years.
“The respondents failed to execute the new lease without any justification or explanation and failed to supply to Brookside 10,000 litres of milk daily as had been agreed,” said Ms Hinga.
On account of the cooperative’s failure to execute the lease, the tenancy became a periodic tenancy under Section 57(1) (c) of the Land Act 2012 leading to Brookside, on a letter dated February 26, 2016, terminating the periodic tenancy and eventually vacating the premises on March 18, 2016.
It is the exit from the premises that caused the conflict. The parties then jointly appointed Mr Arthur Igeria as a sole arbitrator to hear and determine the matter who concluded that Brookside pay the cooperative Sh53 million.
Brookside then moved to court seeking to have the said award dismissed.
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